You've done a great job of hiring the right employee, and you
have spent a significant amount of time and money in training.
Now, one or two years into the job, however, your up-and-coming
star employee decides to leave your company to work
for someone else.
One common misconception among employers is that the
most important aspect of any top employee's job is making the
most money possible. If you
believe that, however, you
will constantly find yourself
paying more and more
money to your top employees
in an effort to fend off
the next suitor trying to hire
them away.
In fact, most employee
job-satisfaction surveys
rank compensation around
third or fourth among the
most-important things.
Well, if throwing money around isn't the answer, how then do
you retain your best people?
Your business, their future
In the aforementioned surveys, the most important factor in
determining an employee's job satisfaction typically is that
employee's ability to see a favorable career path in their future.
Plotting out this sort of career path for each top performer,
however, will require an extra effort on your part. Spend time
with your employees to discuss their future with your business.
Ask them where they see themselves in 2 or 3 years.
What about their plans in 5 to 10 years? Don't assume that
they share the same vision for their future with your company
that you do.
Discussing their future can help you in a couple of ways.
First of all, some of your best employees may not realize that
you actually have them in your future plans. They may assume
that management positions are already set, and for them to
continue to progress in their career they will have to eventually
find another job. Here's your opportunity to acknowledge
how much you value their worth to the company.
On the other hand, some of your stars may have definite
plans to do other things in their life”?things that have nothing
to do with your business. Your company may be just a short
stop along the way. In this situation (and if they choose to
share this with you), you may opt to avoid expending valuable
time and money training that employee for a future position.
In both cases, what's key is sharing your future plans with
your top personnel, and discussing how each of them fit into
those plans”?now, and in the future.
Beyond the money
Providing employee benefits above and beyond salary is another
key to retaining your best people. For example, one of the most
effective benefits you can offer to your employees is some sort of
retirement plan, such as a 401(k) or a Keogh plan. Another benefit
you may wish to evaluate is your vacation or personal time
off (PTO) policies. While additional vacation time allotted to your
employees certainly should be considered a cost to your company,
it often can be an easy benefit to add to without costing
you out-of-pocket cash (as does a bonus or salary increase).
An additional incentive for key personnel: a profit-sharing
plan. Profit-sharing plans can be creatively constructed so that
certain profitability benchmarks must be achieved before money
is distributed. If your top employees perform to those standards, it
becomes a win-win situation”?they make more money, as do you.
Creating a positive work environment can also make a big difference
in retaining your top employees. Regardless of how much
they're paid, your people must be happy in the work place. As a
manager, one of your most important jobs is fostering a setting in
which your employees will look forward to coming to work. Let's
face it”?this is where they spend a significant part of their day.
Evaluating replacement costs
To retain your best employees, you must offer competitive
compensation within the marketplace. You can build the best
programs, provide ample opportunities for your employees to
progress in their career, offer great benefits, and cultivate wonderful
work surroundings”?but if you don't pay your top people a
competitive wage, you will eventually lose them.
Be careful not to take them for granted, even if they're very
happy. While you may not have to pay them the highest rate on
the market, you had best make sure that you are compensating
them fairly. Ask yourself this question every once in awhile:
“What would it cost me to replace this person?”
Finally, keep in mind that while the competitive marketplace
for graphics is a narrow band, the competitive market for
employees cuts a broader swath. The best and brightest will not
only be sought after by your competitors”?you are competing
with every other business out there as well.
Marty McGhie (marty@ferraricolor.com) is VP finance/
operations of Ferrari Color, a digital-imaging center with
Salt Lake City, San Francisco, and Sacramento locations.