(1) Pick winners
It's easy for an entrepreneur to get caught up in numbers. How much were sales last year? What percentage is business expected to increase--or decrease--in 2009? But for entrepreneurs focused on running and growing thriving companies, success goes beyond the numbers. It starts, in fact, with people. Attracting and retaining top talent is an entrepreneur's No. 1 priority, says Bob Prosen, CEO of The Prosen Center for Business Advancement and the author of Kiss Theory Goodbye. From motivating your employees to covering their most basic health needs, making your employees feel cared for and secure could be your best insurance for lasting success.
(2) Invest in people
So how do you build a business with a strong foundation of human capital? Build a business where people want to work. Jay Jamrog, senior vice president of research at the Institute for Corporate Productivity has found that today's work force is attracted to diversity, an office that's equipped with the latest technology and a brand that matches the work environment. Even in a down economy, attracting qualified talent can be a challenge. And it's expected to stay that way. In its October 2008 "Taking the Pulse, Talent Branding" survey, the ICP in conjunction with HR.com found that about 83 percent of respondents expect there will be greater competition for talent five years from now.
(3) Avoid turnover
Finding talent is one thing; keeping it is another. According to a September 2008 study by AchieveGlobal, 23 percent of workers in the U.S. expected to leave their jobs within a year. High turnover can be especially debilitating for a growing company. Jamrog estimates that turnover often happens in the first year or two of employment, especially with younger employees. Therefore, he recommends establishing a professional relationship quickly. Serve as a coach or mentor, and your employees will take notice. Also, keep them challenged with assignments or projects and offer opportunities for professional development. Prosen emphasizes knowing what's important to your employees and then pushing them to maintain a work-life balance. He also recommends offering long-term incentive plans.
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Do it correctly, and your efforts can pay off big time. Tom Walter, founding partner and CEO of Tasty Catering, a Chicago-area events planning and catering company, has been enjoying 27.5 percent annual sales growth since 1995 and projects sales to reach $6 million in 2009. Interestingly, his company was also voted "Best Place to Work in Illinois" in 2008 by The Business Ledger and has had a turnover rate of only 1.7 percent in the past two years. Walter's talent-management strategy includes many of the suggestions recommended by the experts. Initiatives include a mentoring program that pairs the more senior employees with newer ones, a continuing education program, a reward and recognition program, and free lunch for all employees.
(4) Make benefits a priority
Don't overlook the basics. With retirement and health care more frequently covered in the news today, younger employees are paying more attention to benefits like health insurance and 401(k) plans, says Jamrog. "If you can [offer these benefits], do it," he adds. "It gives you a competitive advantage because most small companies and medium companies are cutting back."
If hearing the words health care causes you to cringe, it's understandable. After all, health-care premiums have more than doubled in the past decade and, since 2000, have increased five times faster than workers' earnings. It will cost the average small business an extra 12 percent in 2009 merely to provide employees with the same level of benefits they provided last year, says Steve Roper, owner of Roper Insurance & Financial Services, an agency that sells employee benefits to small businesses.
But all is not lost, thanks to an emergence of new tools and tactics that empower small businesses to regain control of their benefits and assemble packages that cost effectively cover employee health and retirement needs while helping to attract and retain top talent. "Even when your business is being squeezed by the economy, you can still take care of your employees," assures Bernard DiFiore, president of BenefitMall.
Unum, a workplace benefits provider, states in its "Buyers Study 2008" that "a successful benefits portfolio can no longer rely on a one-size-fits-all plan." The right approach, it asserts, involves "connecting the latest benefits and plan designs with flexible funding options."
(5) Shop smart
Consider the following guidelines when shopping for benefits: For starters, find a go-to advisor who can help devise a benefits strategy, then shop on the business owner's behalf. "You don't want a policy peddler," Roper says. "You want someone who's going to hold your hand and walk you through the process."
It's also vital to involve yourself and employees early in the process. "The companies that appear to be having the most success managing their benefits are those that say to their employees, 'Let's look at our options together,'" says James Gelfand, senior manager for health policy at the U.S. Chamber of Commerce.
Lay a foundation and build on it. Start with a solid group-benefits foundation and "layer on voluntary products that meet workers' expectations and add little or no direct cost to the company's bottom line," Unum says.
That approach applies to health and retirement plans alike, says Aliya Wong, the U.S. Chamber's director of pension policy, who suggests business owners start with a simple retirement savings or prototype 401(k) plan. She says, "These types of plans are generally less expensive, and they let you start small and build your way to a larger plan." On the health side, consider flexible, multiple-option plans that allow employees to select among various plan configurations, from bare bones to robust.
Given the steady stream of new plan designs, features and cost structures, DiFiore recommends that small businesses and their brokers make benefits shopping an annual exercise in tandem with a yearly market analysis. And keep in mind that the lowest-cost package isn't always the best fit.