Personnel(ly) Speaking

A Monthly Newsletter from

Personnel Management Systems, Inc.

December 2006

How Can Small Companies Hang on to Their Good Employees?

Competing in Today’s Tight Job Market

With the job market tightening and unemployment the lowest it has been in five years, retaining good employees is a critical business necessity. But you are a small employer. How can you possibly compete with large employers who seem able to continue to pay top wages and benefits?

The answer, be creative. Think beyond traditional pay and benefits. While it’s true, benefits and pay rank high on job satisfaction surveys there is more to it. For many employees “benefits” mean more than just the obvious medical and dental insurance. Today’s workforce wants to be paid fairly and expects medical and dental insurance, but they also care a lot about things that are perhaps less tangible, such as the quality of their work environment and their overall work/life balance. As an employer, your goal is not to copy what everyone else is doing, but instead to assess and respond specifically to your employees’ needs. This can be a bit more challenging than simply providing e.g., a new dental plan. This flexibility, however, gives the smaller employer an advantage over those larger, more rigid employers.

More Than Just Money

If you have a lot of Generation X employees, recognize that “Boomer” managers and “Generation X” employees can have conflicting ideas about what makes a job and a company culture attractive. For many young professionals, money is not as important as feeling as though they can have a life outside of their job – the work/life balance. This oftentimes means flexibility with work-time. Here are some ideas on how your company can embrace work-time flexibility. Obviously, not all these will work for every employer:

· Take a progressive approach to time off. Institute flex-time or job sharing or allow employees to occasionally work from home. Provide PDA’s, laptops and other technical innovations to make it easier for employees to work or keep in touch from outside the office.

· Offer employees a few days off after the completion of a major project to recharge.

· If your workforce is very excited about volunteerism, organize company work parties where you volunteer as a group or give extra days off when employees can volunteer.

· If many of your employees have small children, make it acceptable for them to take time off to attend school events or to work from home when a day care provider is sick or school is closed because of a snow day.

· If many of your employees have a long commute, offer flexible start and quitting times.

· Some employees love to take extended “adventure” vacations or do volunteer work in other countries. In this case, an extended leave of absence or sabbatical may be in order.

Think Small but Meaningful

Sometimes the small, often inexpensive things can make a huge difference in distinguishing you as an employer for whom people want to work. Here are a few ideas that will show your employees how much you care, while keeping the impact to your bottom line at a minimum:

· Special rates at a health club. Gym memberships are often expensive and for some, can be an unaffordable luxury. While you may not be able to pick up the full tab, many facilities will offer a discount if you can promise them a certain number of members.

· Discount tickets. Offer low-cost tickets to a popular show or discounts on memberships.

· Credit card points. Often corporate charge cards accrue points for every dollar spent which can be redeemed for airline tickets, travel, entertainment events, and gift cards. This is a “free” way to provide rewards or incentives to employees.

• Office equipment. As your organization upgrades and grows out of its computers, printers and other office equipment, you may want to give or sell the used items at a low cost to employees. Equipment that may not be powerful enough to meet the demands of daily business activity is often more than sufficient for home use.
• Warehouse memberships (e.g. Costco) While there is a nominal charge, corporate membership purchase can be far less than individual memberships.
• Dry cleaning delivery or a car wash on site. Some dry cleaners will pick up from your office for free. This is just one less chore that employees will have to contend with during their time-off.
• Time with a professional. Offering a one-on-one session with a financial planner or accountant can be a benefit some employees would not otherwise have the opportunity to take advantage of.

One sure fire way to win employees’ loyalty is to ask what you can do for them. You will be pleasantly surprised. Most employees will ask for things that are easily provided such as additional training, a new job title, a light on their desk or a new monitor.

Bottom line…

Retaining your employees does not have to be a budget-busting event. You don’t have to provide the very best medical plan and/or pay the top wages to be competitive. Instead, focus on your work environment and the specific needs of your employees. Look at creative work-time policies and other individualized benefits to create an attractive work environment. Talk to your employees and ask for their feedback; listen to what they have to say. Let the employees know that each one plays an important role in the success of the company. A company culture that fosters open communication and caters to the individual needs of the employee says that you care about them as an individual. Big companies just can’t compete!

If you need assistance in this area or with your human resource function in general, call the HR professionals at Personnel Management Systems, Inc.

Personnel(ly) Speaking is a monthly comment on HR issues of importance. It is intended to provide general information and must not be construed as legal advice. Reproductions are allowed as long as credit for this information is given to PMSI. We welcome your comments, questions, and concerns. © PERSONNEL MANAGEMENT SYSTEMS, INC., Corporate Office (425) 576-1900, Colorado Office (720) 497-0200, www.hrpmsi.com.