Small Business: A firm is as happy as its staff   

Employers can earn staff loyalty by helping them to achieve their full potential, writes Sandra O’Connell

WHEN Hurly Burly, a children’s play and activity centre, opens its doors in December, the owner has high hopes its staff will enjoy each day as much as their charges will.

“I’m looking for people who get what we’re about here, who get the vision,” said John Darroch, the owner of the new venture in Dublin.

Darroch is using a recruitment consultancy to help him hire 14 people. Once the business is up and running they will not be left to their own devices, however. As well as being offered a competitive financial package, the new employees will be supported with training and development aimed at helping them to reach their full potential.

“If you don’t have a medium- to long-term plan for your staff, they’ll stay only for the short term,” said Darroch. “Personally I would regard that as a failure. Once the last checks are done and we open the doors, the success of this venture is all about the staff.”

Darroch’s aim is to have a happy, productive workforce but not all small firms are as aware of the value of making their employees feel important.

Last year, 126,000 people, or 9% of the national private sector workforce, changed jobs. Of those, 90,000 left for reasons other than money.

Almost a quarter of workers cited “lack of recognition for their contribution” as their reason for changing jobs, according to exit interview research conducted by the Small Firms Association.

“In many cases, the companies reported that, while they recognise people are the most important asset of the business, they forget to convey this to staff because of pressure of work,” said Pat Delaney, the director of the association.

The second most common reason given for changing jobs (19%) is lack of advancement.

“It is no longer enough to offer people jobs, employers must now offer people careers,” said Delaney. “This highlights the need for continual training programmes within every business.”

In total, more than 70% of employees leave for reasons other than salary.

“While money remains a universal motivator, other issues such as learning opportunities, personal growth, work variation, autonomy at work and intellectual stimulation must feature highly on a small businesses’ strategy to attract and retain staff,” said Delaney.

Happily, for small firms on low budgets, this means that throwing money at the problem often isn’t the answer. “Companies that respond to employee retention issues solely by increasing wages are buying time, not loyalty,” said Delaney.

Too often, owner-managers of small firms believe they can’t compete for top staff with big companies but this is not true, according to Mike McDonnell of the Chartered Institute of Personnel Development.

“All the research shows people don’t leave companies, they leave managers,” said McDonnell. “People who go to work every day to be inspired and challenged by good leadership don’t care what size the organisation is.”

Sadly, the management style of a lot of companies “leaves a lot to be desired”, he says.

Small firms generally come in two varieties: family run or entrepreneur-led. Both are prone to management weakness. “In a family-run business, managers brought in from outside can be made to feel just that, outsiders,” said McDonnell. “The message is given that the business is being run by and for the family.”

Equally, entrepreneurs very often are poor people-managers. “Their management style tends not to be developmental,” said McDonnell. “They tend to be single-minded individuals focused on a single aim. Typically they are driven by a desire to be personally successful, with money most often being the measure of that.”

For one executive, the decision to quit a well-known Dublin family firm was one of the best he ever made. “All the family were given management positions,” he said. “You knew that, even if their work wasn’t up to it, they were going to get whatever vacancies came up.”

The feeling that questions were “decided over Sunday lunch” before being presented to staff as faits accomplis was also irritating. “The company was offering a job, not a career,” he said. “And as the money wasn’t great either, I had to ask myself, what was the point?” Such issues were brought to a head for many small firms during the boom of the late 1990s, says Catherine Goodman, a small firms consultant at the Irish Management Institute.

“During the Celtic tiger, the big issue for employees was pay: it was easy to get more money by moving to a large firm,” she said. “Consequently, SMEs suffered both in terms of recruiting and keeping staff." These days the fact that large firms are more likely to offer training and personal development opportunities forms part of their appeal as employees have picked up on the need for lifelong learning.

“Whether it is degree courses or simple on-the-job training, large firms spend more as a proportion of turnover than small firms,” said Goodman.

Unfortunately, many small firms believe that staff who are given training will then be in a better position to leave the firm. “They might,” she said, “but in order to have some chance of holding onto people, they are going to have to invest in them.”

She too identifies weaknesses in the management culture of many small firms. “Not alone can there be a huge difference in the treatment of family members and the rest of the staff, but they can also be prone to an autocratic management style that is simply unacceptable to today’s employees,” she said. They key is to be more inclusive of staff.

Worse still, some firms operate a “conflict culture”. “Family politics can also spill over into the workplace generally, making for an uncomfortable environment for staff,” said Goodman. “Outside managers pick up on this and carry on the tradition.” A firm that does not deal with discord is heading for trouble.

Too many small firm owners are neglecting to keep pace with employment legislation too. Not so employees, said Orla O’Connell, a consultant with Peninsula HR, a human resources specialist.

“Small firms, because they don’t have human resource departments, are very poor in relation to employment legislation and particularly in relation to health and safety,” she said. “Employees are aware of this. In the employees’ market we have today, people will leave. They know their rights." Where a small firm can play to its strength is in flexibility, according to Conor Brennan, the deputy chief executive of the Chambers of Commerce of Ireland.

“Everybody has a friend in a multinational who gets their MBA paid for and their trips abroad and a nice canteen,” said Brennan. “As a small firm, you are never going to be able to compete with that. But where you can score is in areas such as family-friendly initiatives.”

Installing broadband in a staff member’s home and allowing staff to work from there to better facilitate the rhythms of family life is a simple, but effective, way of retaining good people.

“All it costs is €30 a month and you get staff who will break their back for you in terms of loyalty,” he said. “What it really takes is having enough trust in your staff to do this — and that might require a change in mindset for some owner-managers.”


Courtesy: Google News

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