It is no secret that the biggest challenge companies of all sizes and in all industries have faced in recent years is finding and keeping talented workers. And while this challenge is not going away any time soon, it is possible to tilt the playing field in your favor by taking a slightly different approach to your recruiting and retention efforts.
With record-low unemployment causing intense competition for talented people at every level in business — from frontline workers to senior managers — it is more important than ever to view the recruiting process in a different light. This is especially true for small businesses that need to compete within the same pool of candidates as well-funded, multi-national companies.
When recruiting the type of employees most of us want, those who are supporting a family or who are serious about building a career rather than just working for a paycheck, it is important to realize that what they are looking for — their expectations of the caliber of the company and its leaders —increases dramatically.
With this in mind, rather than begin the hiring process by looking at external factors such as unemployment rates or shifts in the perceived value of secondary education (things that are outside your control), it would be more beneficial to start the recruiting process by looking internally at both your company’s culture and the company’s leadership (things that are within your control).
In 2020, Violand Management Associates developed Culture ForgeTM, a comprehensive approach to recruiting and retaining the talent a small business needs to grow and continue to compete. The research we conducted, combined with our experience in working with hundreds of small businesses, showed that the key to attracting these workers is not rooted in bidding up salaries, offering unsustainable perks or writing cute employment ads. Instead, it has to do with creating a company culture where people want to be; where they can find meaning in their work that goes beyond the tasks they perform. We know this can be tough to do in a disaster restoration or contracting company where many of the employees are essentially “remote workers.” It requires hard work on the part of the company’s leaders, but it can be done.
The Culture Forge system includes a guide that addresses a dozen areas we have found critical to attracting and keeping great workers. For this article, I’ve taken excerpts from the guide to address three of those areas that I would consider the most critical: Company culture, owner impact and compensation.
1. Company Culture
The culture of any organization is defined more by how the CEO or senior leaders behave than by what they say. Hanging the company’s mission or core values in highly visible locations throughout the company can serve as either a source of inspiration or can be a source of cynicism to the rest of the company if their leaders do not act in alignment with the statements.
To illustrate the impact that a company’s culture can have on its ability to attract people who share their values and mission, let’s consider the story of Jake Wood and the company he founded, Team Rubicon.
Team Rubicon is an organization that responds to global disasters and humanitarian crises. It was founded in 2010 by Jake Wood and fellow ex-marine William McNulty in response to the devastating earthquake that had just hit Haiti and the painfully slow response from service organizations around the world. Since its founding, Team Rubicon has grown to over $51 million in annual revenue and employs 172 people. But here is the magic of their story and the value of their compelling mission and amazing culture — they are staffed by over 145,000 non-paid volunteers! That is 145,000 people who give their time and place themselves in harm’s way to help others who are experiencing extreme distress due to circumstances beyond their control. That is the value of building a culture that speaks louder than compensation!
Does this mean that we need to build a culture like Jake Wood at Team Rubicon in order to be successful? Of course not. Although those who are employed in the disaster restoration industry certainly have a compelling purpose on which to build.
While most companies pay lip service to touting their culture, there are tell-tale signs when a company’s owner and leadership team take it seriously. These include:
- How often individual employees are recognized and praised for demonstrating the company’s core values and interacting with others in ways that reinforce the company’s culture.
- The extent of leadership’s focus on the culture of the company and assessing a candidate’s likely fit as part of their hiring process.
- Ownership’s hands-on participation in the new-hire onboarding process, with a focus on explaining and reinforcing the company’s culture, mission, vision and core values.
- The number of occasions when culture, teamwork and core values are included on meeting agendas, or when behavioral cohesion is maintained by clarifying the mission and vision of the organization.
Workers notice these things, and outsiders can sense the specialness of the company when they walk in the front door. While this alone may not resolve a company’s employment problem, it makes every other recruiting effort a little bit easier.
2. Owner Impact
Small businesses are reflections of their owners. Employees, especially high-performing employees, will choose to work with people who exhibit the qualities and characteristics that align with their own values. This is why the behavior of the owner has such a significant impact on recruiting and retention, even in larger organizations.
If the owner’s leadership style, ego and behavior reflects qualities and attitudes that are considered by candidates to be negative or not conducive to their personal and professional growth, they are less likely to seek employment with that company or to stay on board if they have already been hired.
Long before The Great Resignation or The Gray Resignation trends had begun, workers had grown unwilling to tolerate disrespectful or condescending attitudes toward them by their boss. And so they resigned. But they were not quitting their job; they were quitting their boss. More specifically, their boss’s behaviors. They left in search of a company with business leaders who respected them as people and for the value they brought to the organization; leaders who exhibited qualities such as trust, caring, listening and inclusion. They looked for companies that valued work-life balance, flexibility, a coaching culture and a sense of belonging. And they still are.
While you do not need to be a genius to get this right, you may need to adjust some of the behaviors and thinking that you have relied on in the past if you are going to attract younger or post-pandemic workers — the folks you need to help you grow your company.
Famous gangster and strongman Al Capone once said, “You can get much farther with a kind word and a gun than you can with just a kind word alone.” Capone was on to something, and while I do not advocate his life of crime, I have found some truth in his statement as it applies to compensation and the ability to attract the right people to your company.
When dealing with employee compensation in any organization, it is important to understand its role and limitations. Contrary to what many believe, compensation is not typically a sustainable source of motivation. Increases in compensation often boost employee motivation or engagement, but the effects are usually temporary.
Based on numerous studies of employee behavior and motivation, compensation is best thought of like the ante in a game of poker — it is the cost to be in the game. For employees, this means that when the appropriate level of compensation (from their perspective) is not present, it is viewed as a negative. It detracts from their level of satisfaction and becomes a source of discontent with their job. However, when compensation is considered to be adequate and fair, it is not regarded as a strong motivator. It is simply seen as one of the elements required for a position to be considered a good job. Only in the absence of what is considered fair pay does it become a strong influence and that is as a negative.
Given the above, it is the responsibility of business owners and executives to determine where their employee compensation levels will be, relative to the market and their competition. This is called pay level. For example, to attract and retain the absolute best employees in the market, or to increase the likelihood that you will continue to attract a high number of applicants during times of low unemployment, you could decide to pay 10% above market levels of compensation for all positions. This is a strategic or cultural decision that will drive the assessment process described below. Note that this concept of pay level is different from pay structure, which is a set of decisions on how to compensate different jobs within the organization.
One thing we can say with certainty is the old business advice to “always be selling” has now been replaced with “always be recruiting.” The days of waiting until you are desperate to hire someone before you start looking are over.
Time and again I have found myself in conversations with business owners who are consumed with how much they can afford to pay someone (translation: how little they can get by with) at any level in their company. Obviously, being able to afford payroll is important, but too often this conversation misses the point. Rather than being hyper focused on the amount they are paying someone, they should focus on what value (talents, insights, perspectives) the employee will bring to the company and how they will improve the company’s performance — or in the case of field workers and salespeople, how much they will produce in revenue compared to what they are being paid.
Reframing the way you view compensation and making it part of the larger narrative about your company’s culture can give you an advantage in the battle for talent.
There are no easy solutions to today’s employment situation. It has been with us for several years now, and it is not going away anytime soon. One thing we can say with certainty is the old business advice to “always be selling” has now been replaced with “always be recruiting.” The days of waiting until you are desperate to hire someone before you start looking are over. In today’s tight employment market, recruiting can no longer be a reactive activity. It must be proactive. Progressive business leaders are now taking their company’s recruiting efforts as seriously as their marketing efforts.
While every company — regardless of size, market or budget — continues to list recruiting as one of their top challenges, focusing on a handful of strategies like the ones mentioned here will help even small businesses compete more effectively in the great talent search that is part of today’s workplace.