Keeping Top Talent Can Improve Your Odds at the Bank
It takes effort to keep your best employees happy—simply having a job isn't enough
We’ve talked before about how lenders really want to know three things: Can you repay a loan, will you repay a loan, and what will you do if something goes wrong? That’s the reason they ask how many years you’ve been in business, ask about your annual revenues, and look into your credit score.
Something else many lenders are interested in is the talent you have on your team to make it all happen. It folds into the ‘Can you repay a loan?’ question. It’s not uncommon for many traditional lenders to request the resumes of all your key players. With that in mind, keeping your best talent is very important not only to organizations that are trying to grow, but also for organizations that are looking for financing to fuel that growth.
Not too long ago Stirling Cox, writing for the Washington Post, offered some advice to help smaller companies compete against the big guys for top talent. “The key to success in the job market is identifying your competitive advantage,” writes Cox, identifying one way to attract the best talent. “Perhaps you can’t offer a six-figure salary, but you can appeal to ambition.”
Main Street can also take a lesson from the tech startups. Cox suggests creating an environment where younger employees have opportunities to contribute at a higher level. At Lendio, there are only a handful of people over 40, and only two or three of us have passed the half century mark. Young technology-based startups look less at how many grey hairs you have and more at what you can do.
That being said, having spent the latter part of my career working with young people—many on their first real jobs out of college, I’ve come to the conclusion that you choose to either pay for people with cash, or the time you spend teaching, mentoring, and grooming them for increasing levels of responsibility. Cox suggests, “And as they improve, make sure you reward good work. Promotions and salary bumps determined by merit (rather than time logged at the company) are a big draw for many young job seekers who are repelled by the concept of the ‘corporate ladder.'”
Several years ago I had an employee who wanted to talk with me about a potential job offer with another company. He was a very talented guy I didn’t want to loose. When he told me what the other offer was, there was no way I could match it with the revenue my little business was making. However, I focused on some of the other things I knew meant something to him and offered him a bump in pay I could afford. Sometimes it isn’t money that keep the best people.
Cox suggests we need to, “Make sure there’s nothing in their work experience that makes them want to leave. People who are great at what they do often feel the urge to constantly do more. Make your company a nice place to work, but encourage a healthy work/life balance. Offer plenty of space to relax, and host events to foster connections outside the office.”
Although there are likely many of my former bosses that are turning over in their graves over this sentiment, I think Cox is right. I agree it’s my job (as an employee) to show up every day and give my best efforts. It’s your job (as my employer) to make sure I have a reason to come back and do it again tomorrow.
In the early days of my career, I knew many people who had spent their entire career in the same business. That’s not the case today. The average lifespan of an employee is only four years—even less in some industries. That type of turnover is expensive.
Cox also suggests we need to “…give [employees] learning experience, resources, and opportunities you promised. Being a small company doesn’t mean you can’t snag top employees. You have a lot to offer the brightest talent—just make sure you deliver on your promises.”
Over the course of my career I must admit there haven’t been many, but there have been enough that I pay attention now, times when my employer didn’t keep his or her promises to me. I always felt like my employees came first as a business owner. They definitely got paid first. I tried to keep every promise I made to them, even if it cost me a few extra pennies.
What are you doing to keep your best talent?