Protecting Your Most Valuable Assets

One of my college professors once told our accounting class that every company has some very valuable assets that will never show up on the balance sheet. “Could anyone venture a guess as to what these might be?” he asked.

After a few errant answers and many furrowed brows on our part, the professor revealed the assets he was referring to: the company’s employees. “Even though they have zero net value on the books,” he said, “in actuality its employees are the most valuable assets a company can have.”

Now, jump ahead to the present day. We have officially been “post-recession” for a couple of years, and it’s safe to say that employees are much more willing to take chances on finding better employment if they aren’t satisfied with their current job. I’m guessing that many of you have felt the pain of losing a great employee – but have been caught off-guard by the loss because you thought they were perfectly happy working for you.

So in an effort to avoid that pain, let’s discuss how you can make your employees happy in your workplace and ultimately hang on to the best ones.

First, though, consider what’s most important to your employees. In the recent Society of Human Resources Management’s annual survey (shrm.org), respondents indicated several factors that were most important in creating the highest job satisfaction. In order of importance, they reported these to be:

* Opportunities to use skills and abilities;
* Job security;
* Compensation;
* Communication between employees and senior management; and
* Relationship with immediate supervisor.

What’s important to take away from this survey is that if you wish to create a workplace where people want to stay and perhaps build their career, you do have to pay them appropriately – but there’s more to creating a positive work environment and retaining your best staff than just their salaries. So let’s look at compensation and two other contributing factors I’ve found to be particularly critical.

Rewarding the best and the brightest
We all know compensation is extremely important to retaining your top employees. Suffice to say, you need to make sure your employees feel like you’re being fair to them. Avoid giving out “cost-of-living” raises to all your employees as a blanket approach to compensation. This is a cop out and it does nothing to boost employee morale – in fact, it does just the opposite.

Instead, your best employees should get the best raises and the highest compensation. Yes, it might take a few years for employees to work their way up to the top of the ladder on comparable compensation, but this should be your goal.

Have open communication with your employees about their wages or salaries. Ask them if they believe you’re being fair. If your company has had a rough year financially and cash flow is tight, you might let your employees know this will affect their raises. But, similarly, when business is great and cash is flowing into the business, don’t be greedy. Take that opportunity to reward your employees with wage and salary increases, particularly to your stars (and stars on the rise). Open communication and fair treatment will always go a long way to making your employees feel like they are being fairly paid.

Recognizing work above and beyond
One of the most rewarding parts of an employee’s job is when he or she is recognized for doing a good job. Now this might seem kind of silly. Shouldn’t everyone be doing a good job? Yes, of course. But deeply rooted in our human nature is the desire to be recognized and appreciated when you do something well.

The nice thing about running a business is there are a lot of chances to recognize the value that individual employees provide to the company. For instance, this can be in the form of annual service awards you give out recognizing employment milestones – 5-year, 10-year, 20-year, etc.

You can also reward employees for simply going above and beyond the call of duty on a given project. And you might consider having an “employee-of-the-month” designation. The point is, you should actively look for opportunities to recognize and reward.

The rewards don’t have to be extravagant. For instance, our department managers have access to $25 gift certificates for a movie pass for two and some extra cash for popcorn and drinks. They can give those out randomly whenever they find someone doing a great job. It’s amazing the amount of good will $25 can earn your business when it’s spent in a positive way.

Create internal opportunities
Whenever possible, you should promote from within your organization. When a job opportunity opens up in your workplace, your employees will watch very carefully how you fill that position. Even the ones who are not applying for the position will have interest in who gets hired. All employees will be watching to see whether or not there are opportunities within the company to advance their careers – now or down the road. If someone is qualified (or very close to being qualified), it will serve you well to promote within. The positive effects of an employee being promoted to a higher position within your organization can’t be overstated.

To that end, make sure that you always advertise internally all job openings in your company. And as various employees apply for job openings, ensure they all get the chance to go through the interview process, even if they might not be the best qualified.

Often, some employees might know that they aren’t the most qualified; and they realize they probably won’t be offered the position. But, they might be using this opportunity to make sure you, as a manager, are aware that they’re very interested in moving up within the company as other opportunities arise. Don’t blow that chance to have a positive discussion with them about their future by simply brushing them off because they might not have the qualifications right now. Instead, take the time to talk to them about their expectations and see if they are indeed aligned with the company’s future. Doing so will let them know you value what they’re currently bringing to the table, and that they’ll be considered for future positions.

The long haul
I’ve never forgotten the lesson my accounting professor taught us that day all those year ago. Now, many years later, I couldn’t agree with him more: Your company’s employees truly are your most valuable assets. You can take a variety of actions to protect those assets – the trick is to ensure your shop’s employees feel wanted, and that they wish to remain with your company for the long-haul.