Jay Sachetti joined Jeff O’Brien, partner at Husch Blackwell and Dyanne Ross-Hanson, president of Exit Planning Strategies talked about the market for mergers and acquisitions, exit planning opportunities for companies that don’t end up for sale and how companies can maximize their eventual sale price during an early October panel at the first Upsize on Tap event at Summit Brewing Co. in St. Paul.
When the state Legislature passed a law requiring employers to provide paid leave and safe time for employees, Justin Bieganek started hearing differing details from friends, colleagues and peers.
As the business grows, entrepreneurs experience big hurdles in finding great people, handling performance issues, and the thing we all dread most, firing someone. Add to that a complex set of state and federal employment regulations and the whole thing can seem pretty overwhelming.
But there’s good news. In the world of human resources, you can pretty much pinpoint certain headcounts at which issues usually arise. If you keep these milestones in mind, you could avoid some problems down the road.
When a company is hiring their first few employees, the relationship between owner and worker is usually informal. Few small businesses use application forms, have formal orientation processes, or even well-defined benefit packages. And you know what? That’s okay!
As long as you are adhering to tax and withholding rules for payroll and securing the proper workers’ compensation insurance, you’ll probably remain in good standing. This type of trust model, where personal dialogue and informal meetings are used to hire new workers, often provides the foundation to jumpstart the business without a lot of overhead or paperwork.
But when your workforce reaches about five to 10 employees, I believe you enter a critical stage. At this point, the credibility of the firm begins to rely not just on the owner, but also on the people joining the team.
Key tasks such as sales and customer service are often handed to employees at this stage. And it becomes crucial to successfully lure key talent away from the big companies without having to pay big salaries.
When you reach five employees, it’s important to pay attention to your benefits. Perhaps you can consider offering partial ownership, paying incentives against business performance goals, or even outlining some attractive options you may be able to offer down the road. (Of course, I recommend that any promises you make, you make on paper.)
Play up the things you can provide as an alternative work environment to big business. Flexible time, health club memberships, even a casual dress code are all benefits that you can use to hire top talent.
Put together a short document outlining all the fantastic things your business has to offer at this point, and be even more careful who you hire at this stage of the game. Reference check like crazy and always trust your gut if something doesn’t seem quite right. A bad hire now could be devastating to your business.
An HR person works from the vantage point of an objective observer, or even a referee brought in to initiate new plays and help mediate issues. The biggest characteristic I see when companies hit double digits in employees is high growth.And that growth means you must invest in structure within your organization.
In fact, between 15 and 49 employees is when processes for HR become part of your business’s critical success factors.
For recruiting, your focus should now shift toward hiring a management team of good coaches, trainers and motivators. Your options for candidates have likely increased and more people know about your business, and want to join it.
To maintain the quality of your team, it is imperative at this point to create guidelines and processes for recruiting and hiring candidates. Adhering to those policies can help safeguard you from potential liability, as well as help identify the key competencies that make your business tick.
Up until now, you were probably active in every single hire. You’ve got to put practices in place to guarantee that your company continues to hire the right type of employee, even without your personal stamp or approval.
The other key element in this 15-49 employee band is the “onboarding” process, or orientation approach for newcomers. The larger the staff, the more challenging it can be to acclimate new workers quickly into the mainstream. And with the growth you’re experiencing, there is no time for much handholding.
Identifying and documenting work flow practices can be a tremendous help. A simple manual of operations is a lifesaver, and will even help identify things like cultural norms. We all know how hard it can be to determine those when you’re new to a job.
Finally, a policy toward training is a must at this level. Now that your key players are being held accountable for their subordinates, not to mention the overall organizational goals, a way to identify and schedule training is crucial.
I think 50 employees is a major milestone for any company. When I work with companies at this level, I get to watch them begin the fascinating exercises of defining and articulating their own culture, and branding their internal identity.
Not only does this process help create a picture of the organization, but it is also tremendously helpful for providing employees with a sense of purpose and belonging.
When you reach this staff count, your employees will also want to grow along with the company. Employee development, and having someone responsible for that development whether it’s a manager, HR representative or consultant, is a major factor in a company’s success. Keep a strong focus on finding new and interesting ways to strengthen your existing team and keep them up to date on industry trends.
Retention is even more important now. You’ve spent hours and hours nurturing and building this team. You’ve got to keep them challenged and excited or increased turnover could hurt your business.
Encourage employee committees, and conduct regular surveys and “climate” assessments to keep tabs on the overall morale. And lastly, scrutinize your employee benefit package to make sure it fits your current needs. Using an outside compensation and benefits consultant can be a huge help for this task.
Your company will likely face a myriad of challenges as it evolves and changes. These suggestions are meant as a springboard to help you manage, encourage and inspire the people who are accompanying you on the incredible journey of building your business.
