As we approach the end of the calendar year, our thoughts turn to the people who have made a difference in our lives—family, friends and our employees. Did you hear the story of the benevolent employer who shared $5 million in bonuses with his employees? Well, not all of us can be that generous, but we must constantly strive to show appreciation for those valuable employees who keep our businesses humming along and profitable. That brings us to the 2nd of our 3 P’s – PEOPLE!
Building a team is critical to your success and we are all trying to attract and retain the top talent in our industries. In this tight market, that is even more of a challenge. I hear everyday from employers who are having trouble finding the right people. Several have said they get good people, train them and then they are hired away by the competition—usually larger companies. So, what are you to do?!
Offering a competitive benefits package is a good way of attracting and keeping good employees- and it doesn’t have to be expensive (relatively speaking!). In surveys, we find that employee’s value flexible hours and time off, sometimes even more than higher pay! Not every business can offer flex time, but you can find a way to work in some additional time off, especially if you have a seasonal high and then a lull. After working diligently through a peak season, employees are ready for a break. Structuring some time off, with pay, might be the best thing you can do for the health of your employees and your business. We here at Sandbrook have a very busy 4th quarter and then a short lull through the holidays. Giving employees time off to spend with their families is priceless.
Another way to keep good employees is to offer a Profit-Sharing Plan. 401k and profit-sharing plans are both forms of retirement plans. They allow employees to make pre-tax contributions to an account where contributions and earnings are not taxed until distributed. Some 401k plans require an employer to make contributions to a plan. Profit sharing plans can be written so the employer decides each year whether and how much to contribute. In its document “Choosing a Retirement Plan–Profit-Sharing Plan,” the Internal Revenue Service notes where cash flow is an issue, profit-sharing “contributions are strictly discretionary.” Not only that, but when presented properly to employees, they can help profits and thereby participate in the success of the company by watching costs and materials. Although they do not “own” any part of the company, they can own the profitability. Additionally, traditional 401k plans can be designed so employer contributions become vested over time based on a vesting schedule. With profit sharing plans, vesting can be over time like a 401k plan.
Another way to keep good employees is to celebrate their accomplishments with recognition. If done correctly, this can foster more teamwork within your organization as they can have challenges by division or project. We at Sandbrook work to keep our employees connected and supported by and with each other. Cultivate a culture of success and you will attract like minded employees. There are plenty of good books written about companies that have fostered a great culture where they attract applicants on a regular basis due to their reputation of taking care of their employees.
One of the largest detriments to running a successful team is to have the wrong person—or even, the wrong person in the wrong position. We often hear, “hire slow and fire fast”, but how many employers actually do that? It’s usually the opposite! You hire when you are up against a deadline and find yourself short of hands and then keep that non-performing employee longer than you should. An employer needs a mindset that they always do what is best for the business and get their (and their employee’s) personal feeling out of the way. Although this is never easy, it is essential, especially if you have an employee who is not happy and is constantly complaining. They can sink the entire ship if you don’t take action!
Another area employers tend to ignore is regular performance reviews. I remember going through some of those at an old employer and it was most unpleasant for me, as an employee. This is especially relevant if there are sales or other quotas involved. There are ways again, to make this more enjoyable for both the employer and employees through teamwork and various challenges. But if there is an employee who consistently does not perform, this should be addressed early on and there should be a specific policy for this action.
Which brings us to the issue of “Policies and Procedures”! Most small businesses do not have written policies and procedures. This is a necessity in that it precludes any discrimination or other legal issues when an employee is not following the proper procedures. If you have not updated your Policies and Procedures in a while, or don’t have it in written form and communicated to all employees, that should be a priority. You will avoid unnecessary issues by being clear on what you expect and how it is to be handled.
Another important document is an Employee Handbook. This will lay out things like vacation and sick time, dress code if applicable, and other important details of your business and operations. Remember, ERISA (non-discrimination) rules apply to small businesses too. What you do for one employee sets a precedence to do for all, so be careful not to bend your own rules or make special exceptions. Many times, a small employer will, out of care and concern for their employees, make exceptions on time off. There are laws and regulations that apply to this, so check with the various agencies or your legal team before taking steps in this area.
Compliance with various laws is essential to every business and we highly recommend you have proper legal advice if any specific issues arise.
We would love to hear back from you on how you attract and keep your employees! Please share your stories with us by going here. We will picking the top three stories and will be interviewing the winners online so that we can share their stories on social media. So don’t delay. The deadline is Dec 30, 2019.
Dianne Kelley and the Sandbrook Team