How To Keep Big Corporations From Poaching Your Startup's Best Talent
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It’s a jungle out there. In the wild world of business, SMEs and startups roam the same territory as multinational corporations, more agile and innovative but ultimately less powerful and, well, big. Every so often a large business swallows up a small one but most of the time they maintain their dominion just by pinching the best talent. This seems to be a widely accepted fact of business life: talented and ambitious individuals will ultimately be lured away from small businesses by the money, status and opportunity promised by the giants. But does it have to be this way?
Unsurprisingly, pay is the biggest driver for employee retention, according to the Willis Towers Watson 2016 Global Workforce Study, which surveyed over 31,000 workers, but among the other top seven drivers are factors such as ‘job security’, ‘trust/confidence in senior leadership’ and ‘ability to manage work-related stress’, all of which can give small businesses as much if not more clout than the giants when it comes to convincing their talent to stay. So, how can you leverage your advantages as an SME or startup to increase your staff retention? Here are six tips to give you the edge in keeping your best employees from the clutches of the big beasts.
Offer competitive benefits
You may not be able to compete with the giants in terms of base salary but the benefits you offer could tip the balance. Employee healthcare and wellness benefits are a big concern for workers in the UAE and companies of all sizes are trying to crack the formula in the face of spiralling costs. For big companies it’s tougher than for small ones. As an SME or startup, you have the flexibility and face-to-face contact with your workers to design benefits packages that meet their needs. More satisfactory for them, more cost-effective for you.
It’s also much easier for a small company to instil a culture of wellness. Promote health, fitness and good diet and build this into the DNA of your business by providing healthy food and drinks, facilitating exercise classes and providing help for any smokers to quit. The more effective your wellness program, the less the impact on your employee healthcare insurance. Big businesses are struggling to make this work and are missing out on the benefits as a result. Get the formula right and your benefits package could be just as attractive as anything offered by the giants.
Basic salary is one of the most inefficient methods of remunerating employees here in the UAE due to the impact of statutory end of service gratuities on a company’s profit and loss account. Consider alternative remuneration methods which can be rewarding to employees and more profit and loss efficient for the business, such as deferred bonus plans, corporate pension plans, employee share ownership plans, etc.
Enable development opportunities
Employees don’t like glass ceilings. According to the 2016 Global Workforce Study, ‘career advancement opportunities’ is the third biggest driver for staying at a company in the UAE, after base pay and job security. Globally, it’s the second top driver of retention. While large employers offer structured staff development programs, the training is no guarantee of a promotion. Until the person above you moves up the career ladder or retires, it’s all too easy to get stuck in a rut within the large, impersonal machinery of big corporations.
As a small business, your SME or startup can offer employees far more opportunity to gain valuable hands-on experience in a variety of roles. This helps to develop transferable skills and open up new avenues of career advancement. Take a small advertising agency as an example. A worker who starts on the creative side, as a copywriter or designer, say, is likely to be required to speak to clients and thus learn the skills of account management. They will develop new skills like budgeting, scheduling and strategic thinking, all preparing the young creative for a future in management or even, one day, running their own business. Large agencies have much more of a siloed structure and that same creative may never get the opportunity to test their client management skills. So, make sure your company is structured in a way that enables employees to develop their skills in real-life situations and if they show a flair for a different role from the one you employed them for, encourage it.
Create an upbeat environment
The third most common driver for employee retention is ‘the physical working environment’. Surprising perhaps, but not when you consider that your workforce will spend more of their waking hours here than anywhere else. Don’t allow your workplace to become drab, demotivating and unhealthy (remember point 1). This is an area where startups and SMEs lead the way. They are renowned for their ergonomic workstations and fun breakout areas. You don’t have to stick a table tennis table in the middle of the room but do think about ways in which to liven the place up, encourage screen breaks and thinking time and engender a relaxed atmosphere. Lighting, colour schemes, music, and temperature controls don’t require big budgets to get right.
And think about your outdoor space too. A growing number (no pun intended) of companies in the US claim to have a vegetable garden available to employees. Need a few carrots for dinner? Pick your own.
Be time flexible
Workplace stress is the enemy of all businesses, leading to absenteeism, ill health and poor productivity. One radical initiative aimed at alleviating time pressure on workers –and proving a very attractive benefit– is unlimited paid time off.
Before you fall off your chair laughing, what if I told you that it’s a policy pursued by Netflix. They haven’t done badly, have they? Unlimited paid time off works on the principle of getting the job done rather than putting in a fixed number of hours and days. Back in 2004, when Netflix was still a fledgling company, its leaders began to acknowledge that most of the company’s staff were working in the evenings, on weekends and during vacations. The odd hour here and there soon built up but no one was tracking it. So, they asked themselves why they bothered to track holidays as well: what really mattered was whether or not people got the work done. So, Netflix told employees, "If your work is complete, you can take as much paid time off as you want." This instilled trust in the workers and placed responsibility in their hands.
Other schemes you might consider include a four-day working week, working from home, and permission to bring children to work in an emergency. Ask your employees what they would like. These policies can all help to alleviate time pressure on your employees, as well as giving them a valuable sense of responsibility.
Share the credit
Speaking of responsibility, one of the typical drawbacks of working for a large corporation is the feeling of being just another cog in a big machine. In a small business, the connection between every member of staff and the end product is much more immediate. Or it should be.
Many employers fail to understand just how important such responsibility is to their staff. Our 2016 Talent Management & Rewards Study surveyed over 21,000 employers and asked them what they thought made their company attractive to other workers. Seventh on the list for UAE employers was ‘the ability to have a real impact on the organisation’s performance’. But according to the 2016 Global Workforce Study, UAE employees themselves tell a different story, placing this in their top five drivers for taking a new job.
As an SME or startup you have a golden opportunity to involve all your staff in your business successes. You could share the credit through an incentive pay scheme, but simply making them feel directly involved in your successes will engender a strong sense of job satisfaction.
Many small businesses in the developed economies are able to recruit talent with lower salaries than offered by the big boys through incentivising key talent by giving them a stake in the business through share plans or phantom share plans. This is known as “The Wages of Capital”.
Build the employer-employee relationship
Two leading drivers for employee retention are ‘relationship with supervisor/manager’ and ‘trust/confidence in senior leadership’. At a small business the two go hand-in-hand. Company leaders must press home this advantage by making themselves visible, accessible and responsible. Come out of your office, talk to your staff, take them out from time to time, take an interest in what they get up to outside work, find out what they want inside work. In short, build that relationship and use it to involve all your workers in what the company is doing. This will help to build trust, confidence and loyalty, which can all lead to a stronger sense of job security – the fourth biggest driver for staff retention.
Press home the advantages of leanness and agility
Being outmuscled by the financial clout of big businesses need not mean you have to keep losing your best talent. Even from an employee’s point of view, there is more to working life than money. Health benefits, career opportunities, working environment, job security, stress management and faith in the leadership are all important as well. These are all areas where a small business can outmanoeuvre a big one if you do your homework and get the formula right.