Thanks to all the attendees of our October webinar, Finding, Hiring and Engaging Superstar Employees for Your Small Business, featuring Helgi Hermannsson,, CEO & Co-Founder, from Sling and Asta Bjarnadottir from Capacent Consulting.
If you missed the webinar, you can view the video playback on our Kabbage KamWebinars YouTube Channel and view the slides on our SlideShare. Both the slides and video are also embedded at the bottom of this article for you.
The workforce is changing
Millennials will be the largest generation in the workforce by 2050, as more than one-third of the current U.S. workforce is between the ages of 18 and 34. Millennials offer unique skills such as fresh ideas and tech savviness that companies need in order to stay competitive.
Technology is changing too
For the past decade, technological innovations and improvements have been introduced to the marketplace on a constant basis. In the workplace, technology has been a crucial factor in moving work that previously only could be done through a computer to other devices such as mobile phones. Business related functions are moving at an even more rapid pace and the urge to stay connected at all times explains why 75% of mobile phone subscribers in the U.S. now own smartphones.
Expectations are changing
Technology has caused a big change in the expectations of how we communicate in the workplace. Always wanting to stay connected to know what’s going on either in business or on a personal level has increased tremendously.
With this change, no one wants to work at a company where the communication is poor. Millennials are going to be the first ones out of the door if your company doesn’t enforce open communication. Research shows that lack of communication is interpreted as lack of respect for an employee and in order for employees to feel respected they need to know that their opinions are heard.
Unfortunately, managers are often lacking the right tools to get the information to non-desk employees, which often results in: 1. Low levels of employee engagement, 2. High employee turnover, and 3. Inferior customer experience.
By increasing employee communication and engagement, companies are able to dramatically improve customer experience so they can get more repeat business, positive reviews, and positive word of mouth.
To improve communication, companies should take advantage of technology to create a more connected organization. There are several software platforms that can be used to achieve this and one of them is Sling.
Sling is a free communication and shift scheduling software for non-desk industries that is built through 4 main features:
- Shift Scheduling
You can share communication with employees within minutes and the best part is that it’s simple to set up and use. You can get your free Sling communication software here.
There are 5 best practices of people management/human resources that you should follow to succeed as an employer:
As a small business owner, why should you care about people management?
You should care about your business results, such as output/income, costs, and quality. But to effectively achieve these 3 results, you need to have the ability to manage the people that will help make this happen.
What are the basic people processes?
- Defining the job
- Recruiting candidates
- Selecting among them
The first day comes along and you train your new employee. Then, as time goes on, you focus on further training and developing your employee. You evaluate the performance and provide feedback. Changes in pay management, other rewards and benefits are also considered as you move along the basic people processes. Lastly, there is an information flow that goes up and down the organization chart until the employee eventually leaves the job (voluntary, involuntary, or by retirement).
Best Practice 1: High Threshold for Entry
In a small firm, every person matters more proportionately than in a big firm. You need to figure out ways that will help you achieve the best productivity for your employee: Do you need to change the job requirements, hire a different person than the previous person that held the same role, or do you hire a contractor for the role? In the recruitment stage you should focus on getting a high number of applications so you can increase the quality of the hires you get.
- Get at least 10 applicants and evaluate them all. Yes, it takes time, but it’s most often than not, worth the time investment.
So what do to look for when you’re hiring?
In order to successfully hire an employee, you need to pay close attention to three direct determinants: knowledge, skill and motivation. If you believe that the applicant might not have all the required determinants, have the applicant take a test of the determinants that you believe are most important for the job. Based on the results, you can define which applicant will work out best for your business.
Best Practice 2: Training
People often choose to work for large companies for training opportunities, as in a small company you often don’t have that opportunity. Therefore, as a small business, the more training you do the more of an advantage you will have to hire a quality employee (at least when competing with other small businesses).
If you don’t have the budget to constantly invest in employee training, make sure that you at minimum invest in new employee training. Research shows that the first few days in the job are the most memorable days for a new employee, and this will define his/her future success in the role.
If you don’t have a training program, get senior people or frontline managers that deal with your customers to mentor new employees. Enforce internal promotions as much as possible. Promote from within to send the message that you’re investing in your people and that you offer them new opportunities.
The Alliance Way
Things have significantly changed in the workplace. Employers of all sizes are competing for the same talent and most often than not, smaller companies end up losing talent to larger organizations.
Additionally, expecting employees to stay with the same company for a lifetime is no longer viable. Today, the norm is that younger people don’t stay longer than 2-4 years with the same company. The co-founder and chairman of LinkedIn, addresses this topic in his book The Alliance, where he recommends that companies (specially startups) propose an alliance agreement when hiring to retain employees. An alliance agreement consists of offering an employee a set of clearly defined goals and tasks that would have to be achieved within a 2-4 year window. This alliance is usually a win-win situation for both parties. The employee is able to achieve professional growth and increase his/her market value, while the employer gets tasks completed and objectives met to keep growing the business.
Best Practice 3: Performance Feedback
Lack of feedback is an area of improvement for many employers. In most cases, employees get frustrated as they are not getting feedback in the speed they are wanting and also because it oftentimes doesn’t happen on a regular basis.
It’s strongly recommended that employers give feedback to their employees once a month. However, if this is difficult to accomplish, give feedback to employees at least once every 3 or 6 months. The more often you can provide feedback, the better for your employees.
Establish a feedback system where you communicate to employees what they should keep doing, what to start doing, and what to stop doing. Always allow for discussion of past, present and future initiatives. Also, remember to set ideas on goals for the next performance evaluation period.
Best Practice 4: Performance
Small firms are often terrible about managing pay and prefer to avoid bringing up this topic to employees. Try to get really good at discussing and managing pay.
- Provide positive reinforcement
- Explain your decisions
- Be aware of comparison – Use data to back up your decision
- Rehearse how to communicate the decision
- Use flexible pay to minimize fixed costs. Flexible pay can include incentive systems and spot bonuses
- Don’t talk money only once a year
- Combine money talk with a performance review
Why should you be transparent about pay?
A Harvard Business Review survey of 71,000 people show that:
- People who are actually paid above market believe they’re paid 35% below market
- People who are actually paid at market believe they’re paid 64% below market
- People who are actually paid below market believe they’re paid 82% below market
It’s much better for you to be transparent about how you are arriving at your figures by having market data available, as it can save your employees the demotivation if they believe they are paid below market. If you know you’re going to be below market pay, then try to supplement that by offering employees more interesting tasks, flexibility, freedom, or access to information.
Best Practice 5: Communication
- Share communication with employees to build trust. If you share information with your employees it will show them that you trust them, and they will in return trust you
- Have formal communication strategies such as surveys and focus groups to learn from your employees
- Remember: you need to say things 7 times for people to hear you. This can be done through different venues such as: meetings, one-to-one communication, newsfeed in your message application, and email
Why do people leave?
There are some discrepancies between the reasons why employees decide to leave their jobs versus what HR managers think are the reasons why employees leave their jobs:
Survey of HR Managers for reasons why they believe employees left their companies
- Opportunity to further career
- Better pay
- Personal reasons
- Poor management
- Poor relationships at work
Survey of employees when leaving their companies
- Lack of appreciation
- Mores responsibility at another job
- Better pay
- Lack of recognition
- Poor relationship with boss
We hope you found the information that Helgi and Asta provided useful, and that it provided you with ideas and best practices on how you can improve your employee hiring and engagement to achieve HR excellence in your small business. To learn more about Sling, visit their website.
Still have questions about how to attract and keep customers during this holiday season? Leave us a comment on Twitter: @KabbageInc, or email us at email@example.com. You can also sign-up for our free small business newsletter to get access to more webinars and business tips by entering your email in the form at the top of the sidebar of this blog.
Thanks for listening in, we hope to see you next time!
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