5 Ways to Retain Your Great Employees

5 Ways to Retain Your Great Employees

I wrote this article for Western Independent Bankers.  I truly believe that retention of great employees is the key to business success in the next two years.

Hope you enjoy it!

The Importance of Your First Job

The first job a person gets is, in many ways, the most important job you'll ever have.  If - that is - you look upon it as what is should properly be - a learning experience.

Never, ever look down on any work you do thinking it is beneath you or will have no value you to you in life.  Every task and opportunity can be a learning experience if you make sure to look at it that way.

Take a look at me, for example.  During my last year in college (and for a couple of years after), I worked at a restaurant.  I started out busing tables, then waiting on tables and bartending and eventually participating in buying wine for the restaurant.  This was a moderately upscale seafood restaurant.  Twenty five years later, I can tell you it was the greatest learning experience I’ve ever had, with better “real life” training for my career than any college course or seminar I took.

One day, I’ll write an article that will be called, “Everything I Know About Sales I Learned From Waiting Tables.”  Think that’s not true?  I learned about multi-tasking, and customer service, and that different people need to be treated different, with varying levels of urgency.  I learned how to upsell, and look for signs that a patron was looking for something better than the house white wine.  That meant learning about my products and understanding what they mean to people.  The restaurant offered an incentive for additional wine sales, and that was my first experience with commissions.

Working with different types of people in different positions, and treating them the way they prefer to be treated.  Not just clients, but the restaurant management and ownership; chefs and busboys and cocktail waitresses and hostesses.  One of the first great leaders I saw was the owner of the restaurant, who saw something in me and encouraged my development.

It’s only a crappy job if you view it as a crappy job.  Everything is an opportunity to learn.  And in life, learning ultimately is everything.

Forbes List Fail

Recently, Forbes unveiled its newest list – "America's Best Small Companies 2010",which led me to wonder: What criteria did the magazine use to determine the “best small companies”? 

Instead of taking a thoughtful, comprehensive approach to this process, Forbes chickened out, took the lazy way out, and insulted all small business owners and those of us who work with them.  And, in the process, Forbes embarassed themselves.  Their list should have been called “America’s Best Publicly Traded Small Companies Based on the Best Earnings Growth and ROE in 2010,” because that’s what the list really is.  What it decidedly is not is a list of Americas Best Small Companies.

Someday, Forbes will realize there’s more to a successful – or “best” – company than a stock price.  But that’s probably too much to hope for.

First, Forbes excluded millions of small businesses by requiring that candidates: “…for our list had to be publicly traded for at least a year, pull in annual revenue between $5 million and $1 billion, and boast a stock price no lower than $5 a share.”  That eliminates a lot of companies – there are about 27.5 million businesses in the United States, but only about 6,500 are publicly traded.  There are also thousands of successful small businesses that earn less than $5 million in revenue, but are profitable nonetheless.  (In any event, the $5 million threshold was an illusion; the company on the list with the lowest revenue was Nevada Energy, with $29 million in sales).

But, we’ll cut Forbes a break here.  They probably didn’t want to research millions of companies, and it’s a lot easier to measure publicly traded companies, since their financial reports are naturally made available to the public.

But that’s where the breaks stop.  For Forbes imperically decided the only attributes that comprise a “Best Small Business” are:

• earnings growth;
• sales growth;
• return on equity in the past 12 months and over five years; and
• stock performance compared with that of its peers.

Say what?

Long-term, sustainable success in business – especially small business – is based not only on financial terms, but the quality of a company when it comes to such crucial areas such as:

• employee satisfaction and productivity;
• customer satisfaction and loyalty;
• how well a company benefits its community and strategic partners as well as its vendors. 

Satisfied employees are always more productive; becoming an employer of choice takes a combination of corporate values, compensation, challenging work, a good environment and the opportunity for personal and professional growth.  Businesses measure this all the time through Employee Satisfaction Surveys, or 3600 Surveys.

Customer satisfaction and loyalty – also easy to measure and benchmark - were not included as criteria by Forbes.  Why?  Because this list was clearly intended not to be the “Best Small Companies in America” – but actually a tip sheet for short-term investors and traders. 

I’m not suggesting that financial measurments be eliminated when determining a best small company – it should just not be the only measurement.

Values play a significant role in successful business.  How an owner’s values permeate throughout the workforce is essential to long-term success.  Having and implementing long-term values such as quality of product and service; commitment to clients and customers; appreciation and understanding of the workforce creates a culture where the “best” truly comes out. 

It’s ironic, then, that Forbes on one hand says, “we dropped companies that are thinly traded and those with fuzzy accounting or major legal troubles,” and on the other hand names Medifast as the #1 Best Small Business in America.  Medifast, as you might know, is in the middle of a major lawsuit in which Fraud Discovery Institute accused the company of “ ... pyramid-style selling - is unsustainable and will lead to a revenue trajectory similar to other multi-level marketing companies: dizzying initial expansion followed by lackluster revenue or worse.....”

Whether these accusations are true or not – they are illuminative.  If Medifast is indeed one of “America’s Best Small Companies,” won’t they still be there in 2011 when the lawsuit is behind them?  Why rush?

If you’re a day trader looking to make a quick buck – the Forbes list might be just right for you.  If you’re looking companies to emulate or model as a Best Business – Forbes is out of answers, and this list is one epic fail.

Follow Eric Swenson on Twitter: www.twitter.com/managingpeople.

Employees First

Dave Berkus is an accomplished speaker, author and angel investor.  He provides common sense advice to all businesses through his blog, Berkonomics.

His recent post deals with the frustrations of business owners who perceive that government regulations always favor employees.  His advice?  Recognize the realities of the times.

He's right!

Workplace Litigation Trends Report

This is the 7th year that Fulbright & Jaworski has surveyed senior corporate counsel regarding litigation.  I'm focusing on the responses that affect businesses - and selecting those answers.  The results are illuminating!

In which area is there the most litigation pending in the U.S.?

Contacts: 53%
Labor & Employment: 49%
Personal Injury: 27%
(participants could pick more than one type)

In which area has there been the greatest increase in multi-plaintiff cases whether they be class, collective action, or significant multiple plaintiff action?
Wage & Hour: 46%
Labor Union: 13%
Age: 11%
ERISA: 10%


[What types of cases] will see the greatest increase in 2011?
Discrimination: 39%
Wage & Hour:35%
Labor Union: 17%

ERISA: 5%

FMLA Could Become More Complicated

The Department of Labor will be conducting a comprehensive survey on how employees in the United States use their Family and Medical Leaves.  The Obama administration has made a committment to improving work-life and work-family balance, and the results of this survey are likely to influence changes in FMLA.

For now, nothing to take action on - but keep your eyes/ears open.

Here's an article from the Chicago law firm of Franczek and Radelet.

Quarterly Newsletter and a Sage Cartoonist

I hope you'll checkout our HR & Management Newsletter by clicking here.

Also, I note with interest David Horsey's editorial cartoon from July 21.  Mr. Horsey is a talented cartoonist who's published through the Hearst Newspaper chain.  (You can see all his stuff here).  After I've been writing and speaking so much on this topic - that businesses are finding ways of doing more with fewer employers - a client saw this in the San Francisco Chronicle and gave it to me:

David Horsey - Hearst Newspapers