Accelerator: People - Win talent and keep it

Don't let the big corporates take the cream. Small firms like yours can attract the best people by playing to their own strengths: start-ups are flexible, informal, sociable, purposeful - and exciting. Dave Waller reports.

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Last Updated: 31 Aug 2010

I can't live, if living is without you, sang Harry Nilsson in his schmaltzy 1971 hit. He was pining for a lover, but his words may well strike a chord with any small business leader who's ever watched the star performer walk out the door for a well-paid career elsewhere. Unfortunately, when it's decent staff you're trying to get your hook into, it's rarely a case of 'plenty more fish in the sea'.

For smaller firms, losing talent can be soul-destroying: you invest time and money in unlocking someone's potential, only to find yourself abandoned as they are lured by big and shiny corporate rivals. But even these large firms can suffer. Take Google. The internet giant drew rare criticism this year over the amount of brainpower it was losing as staff left to seek their fortune elsewhere.

Lacking Google's cash muscle, international opportunities and cultural kudos, the average growing business may feel it faces an uphill struggle to hold on to its best people. Yet small enterprises actually have many advantages that will ensure people want to join and stay. Your company may not have the biggest brand name, occupy the flashiest HQ or offer a stratospheric career ladder, but there's still a lot of appeal in the small-business set-up. It's simply a matter of tapping into it, of knowing your strengths and playing to them.

This is actually a good time for small businesses to appeal to new employees. Since the dot.com boom and the rise of firms like Google, the start-up turned smash success has become a familiar phenomenon. The idea of getting on board a company when it's on the way up is, for today's young upstarts, attractive. 'Potential employees like the thought of being part of something special,' says Victoria Winkler of the Chartered Institute of Personnel and Development.

It has certainly worked for Innocent drinks. The uber-trendy smoothie-maker may be a small firm but it has never had problems getting staff. It once received an unsolicited e-mail that read: 'I may be only a lowly student but please give me a job! I worship you all.' As well as its funky brand, Innocent also offers perks such as away-days, a free bar on Friday evenings, extra holidays for newlyweds and even free breakfasts for all staff - complete with your own bowl, mug and plate.

Not every company has Innocent's flair - or budget - for marketing. But there are simple steps you can take to get your company name and repuation known to potential employees.

Developing ties within your geographical area - by sponsoring sporting events, for example - will raise your profile locally. And websites provide the ideal platform for pushing company values. Capture imaginations by conveying a clear sense of what your firm stands for, be that a commitment to a happy workforce or to environmental improvement, and you'll be in a better position to compete with the perks and benefits that the corporates offer. Indeed, young people are increasingly putting a satisfying workplace ahead of salary as a major motivating force in their career.

It's also vital to know who you're aiming to attract, and why. What stage is your business at, and how will prospective employees fit it? Is it seeking youngsters whose ambition matches your own, or seasoned hands whose experience will help change it from a seat-of-the-pants start-up to a professional outfit?

Knowing your company is essential for recruitment. Be aware of what each team member already offers, then you can look for someone with complementary skills. The fit is important - any square pegs will upset the balance far more than they would in a big company. But it shouldn't be a case of 'we clicked, so she's in'. The danger there is that in favouring people similar to yourself, you'll overlook the person with the skills you need.

'Build a team you know and trust,' says John Mullins, chair of London Business School's entrepreneurship faculty. 'Then when you're filling out that team you can focus more on young, ambitious and energetic people than those with long CVs from more established settings. Smarts, ambition and hard work can overcome lack of experience.'

Attracting good people is, however, only half the battle. Once you've got them, you have to hold on to them. Star players may be content to stay when the going is good, but they can often be the first out the door when the road gets rockier. And for start-ups, the driving is often nothing less than an extreme off-road adventure. In this fast-changing environment, you will have learnt to be flexible, and flexibility is what you can offer.

Certain things may be prized in the corporate world, such as the status conferred by job title. But in your flexible world, let people decide their own title or define their own role. If your stock controller has a flair for writing, could they get involved in producing your website? And just because someone was taken on as a receptionist, it doesn't mean they have to stay there. Being relaxed about people moving to roles that may suit them better creates a positive, dynamic atmosphere. People feel there's a real potential for change, and that is a very appealing carrot.

Flexible working could be another of your trump cards. It's not practical for everybody, but if people are allowed to vary their hours or work from home it's a great perk. Don't reject the idea out of hand simply because you like to see bums on seats. And do people always need to wear smart suits? Would more casual gear be acceptable some of the time?

There are of course areas in which small businesses just can't compete with corporates. Training is one example. Formal learning and development programmes involve a dedicated HR wing and hefty resources. But a little imagination can go a long way. Guidance in a small company simply has to be more hands-on. Instead of line managers, have mentors. Introduce learning days where staff swap information on their projects. Teams can present on what went well, what went wrong, and how things might be changed.

People stay because they feel invested in, and in this respect small firms have a distinct advantage. A shorter chain of command means all employees can speak to the boss. Make sure the team feels it can contribute, and that its contributions are valued. Be open about the business and how it's performing, and encourage input from everyone on how to make improvements. The result: a greater sense of involvement in the firm and its fortunes.

Make the effort to celebrate staff successes. Have a monthly event where they can toast what they've achieved, and don't limit that to business success. If an employee has had a baby or got married, shout about it. And be imaginative about rewards. Should Christmas bonuses be a percentage of salary? If the firm has done well and you've got a pot of cash to share, why not give everyone the same. It's a small gesture, but it will be appreciated.

And in terms of involvement, there are few things as tangible as giving staff the opportunity to own part of the firm. Consider offering staff a stake. 'Make everyone an owner, right down to the secretaries,' says Mullins at London Business School. 'When you think like an owner rather than an employee, it's a completely different mindset.'

Good people need to know the company is looking after them. A small firm may lack the clout to invest in secondments and training, but it can make up for that in other ways. Knowing what motivates employees is crucial. Is it benefits, or the opportunity to lead? Is it the chance to forge relationships with colleagues? So get to know your staff as people. Socialise with your team: learn their passions. Regular events keep a team gelled and encourage staff to stay. Whenever you see someone's shoulders drooping, take them to one side and offer a sympathetic ear.

Being small doesn't make you second-best in the war for talent. Embrace the virtues and play to your distinct advantages. As Innocent drinks' co-founder Adam Bolan says: 'Little is about attitude, not size.'

ANTONY BUCK, REN SKINCARE - FOR US, CARING HAS TO BE MORE THAN COSMETIC

"I started REN seven years ago with my partner Rob Calcraft, and we now have 26 staff. Skincare isn't like selling ball-bearings. A lot of people love the product, so people have always come to us for jobs. The first person we took on, Marielle, was a customer of ours at Selfridges who left a note saying she'd like to help out. She joined us six years ago as a PA, but we didn't really need one so she became office manager. She now travels the world training spa therapists in REN treatments.

Opportunities arise every few months for something else. A Spanish woman here used to work on stock control; she now responds to customer communication - and she works from home.

We let people define their role. You can choose your own job title if you want one, and there's a general principle that came from my early days in an ad agency: you have responsibilities, but that's it. No one's thinking: "I have to put on my work face now". As long as you achieve, no-one gives a stuff where or when.

One of the worst things we did to start with was hire people that we know. Never, ever do that. Don't hire friends, friends of friends or any friends of relatives. Inevitably at some point there is going to be something you want to change, and what the hell will you do if you need to fire your mother-in-law?

We're now recruiting people with specific skills, people who can teach us things. We don't have the resources for training, so we're taking on people with experience elsewhere.

They learn a different sort of stuff here because the company is not set in its ways. Jeff, our supply-chain manager, is in his mid-50s, and in a year here has completely changed from thinking work is all about wearing a suit and punching the clock at 9am. For the first time in ages, he says he looks forward to coming to work. And he's been working for 35 years.

In bigger companies there isn't anyone to set the culture, so it just reverts back to being a system and process. Much of the tone here is down to our personalities, the way Rob and I talk, the way we dress. Everyone leaves early on Friday afternoons - I go to my painting class.

Sometimes people come in thinking: "It's all so laid back, I can do whatever I want", but they quickly realise that this is not the case. You've got to care. We care about the business a lot. People need that in the back of their minds - you don't want to spend your life somewhere where no-one cares.'

VIRGINIA MERRITT, STANTON MARRIS - SHARING OWNERSHIP HELPED US TO RETAIN OUR EXPERIENCED STAFF

"I'm one of three shareholders who set up the company in 1998. We'd all just left firms that had been bought by larger companies. None of us enjoyed the experience, and that informed the values here. We're competing in a highly professional marketplace against the big HR consultancy firms, so we have to hold onto our original distinctiveness even as we grow.

Our team has an unusual amount of social engagement. There's an annual outing where we close the office down and get everyone out together to Lille for lunch or Venice for the day. We've created a home here - everyone knows what everyone has been up to. Socialising as friends breeds a great commitment to the firm. It's important for the support staff, for example. There are a lot of very intellectual people among our consultants, and without this mixing it could easily become a 'them and us' situation.

We've only had one or two people leave, and we've learnt from that. Some people quite reasonably like to keep their private life separate from work. Unfortunately, others can see that as a lack of commitment to the firm. In recruitment interviews I have to explain it's part of what you sign up for.

We've got 23 people now. One thing we got wrong last year was to introduce systems that brought in too much discipline. People railed against it. You have to ease off on the bureaucracy and keep the right balance. It's clearly tough practising what we preach sometimes.

This year, the challenge is to introduce more of a career path. We've always been fairly loose in the way we manage: no-one has a line manager; everyone has a mentor instead. As we grow, we're taking on more young people, and they may need more structure.

We've also had to look at sharing ownership of the firm. We became a limited-liability partnership - we now have nine partners. We had to do it to retain experienced people, and to make sure they weren't too comfortable.

This has definitely flicked a switch. There's now an incentive to make sure they help the company grow. We didn't set Stanton Marris up to grow it, sell it and make a shedload of money; we were bringing in people to take it on when we hang up our boots.

HOW TO HANG ONTO YOUR TALENT
1. Hire the right people.
2. Create a company atmosphere of friendship and trust.
3. Exploit your small-firm flexibility.
4. Let roles evolve to suit your people's individual talents.
5. Involve your employees in decisions.
6. Celebrate your successes.
7. Offer flexible working.
8. Remember: incentives can be more than just financial.
9. Be responsive to the feelings of your staff.
10. Offer employees a share in the business.

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