I’m going to take a wild guess and assume that you are having some level of difficulty finding acceptable employees right now. You have to find some irony in the fact that, in a social and economic crisis, we (read: the federal government) gave handouts to businesses to fund employment, while also giving handouts to the very people that those companies were trying to employ. Somehow, this plan did not work very well!
Most people assume that normalcy will return to the labor market, but I’m not sure anyone has a firm understanding of how, or why, or when. Meanwhile, life and business continue, and we need to implement effective strategies to hire and retain key talent in our companies. From a Human Resources perspective, let’s suppose that we have two main themes: Culture and Policy.
- Culture, could be defined variously, but consider a simple description: it is the expression of what is important in your company. If you think about that, and if you are able to concisely write down what is important in your company, then you will develop a deep understanding of the qualities you need in an employee.
- Policy, in this context, is the totality of the compensation and benefits package, and I’ve written before about the importance of instituting performance-based pay structures with your key people. At CLM Advisors, we believe that employee compensation can and should be tied to areas of performance that the employee can control.
Among small businesses, especially those with relatively few employees, culture often exceeds policy in importance. Smaller businesses do not have the buying power to compete with large corporations on compensation and benefits. As a result, we have seen some small businesses hire PEOs (Professional Employer Organizations) to manage and provide their employee compensation packages. I believe other creative solutions will arise as well, because there is a need. If there is to be another small-business “revolution” in this new economy, we are going to see innovative strategies to reduce the cost of doing business. A healthy economy needs small business to thrive.