One of the more common things I hear from business owners is that there small group of employees are treated like family. My response to that has made some of my clients VERY uncomfortable. Let’s get into it.
First, what is my response that troubles them so much? Simple. I ask them why they dislike their employees that much? No, I am not trying to say bad things about anyone’s family. What I am saying is this: Expectations for family are usually unfair expectations based on what we think it means to be family. Expectations for employees are actually much easier to define. If you care for your employees, and your business, the better you are able to define the expectations for your employees, the better prepared your business, and your employees will be for success.
So, you may be wondering exactly what this looks like. Let’s look at an example. I had a client that owned a few retail shoe stores. Simple businesses that were operating at a small profit margin, providing some income to the owners without having to spend a lot of time on the business, most of the time. They concentrated on treating employees like “family” as a means to maintain long term employment by people they could trust to act on their behalf. People they could be comfortable with. People that made decisions for them in their business every day, based on what the employee thought was best.
Does that sound familiar? Does it sound like a good idea? (It isn’t a good idea) The truth is that this is bad for the employee, and the business. The employee is being “empowered” to “take ownership” in their role in the business. But it isn’t reality. They are being asked to do what they may or may not be able to do well, without oversight, training, measurables, or a plan for their continued success and development, in particular for after their employment ends (and it will end). What do I mean? Well, let’s see.
According to most data I have examined, a very small percentage of employees stay with a company for their entire career. Most people change jobs multiple times throughout their working lives. The majority of workers do not have a “career job” where they stay with one employer for their whole career. Based on Bureau of Labor Statistics data, the median employee tenure in the US is around 4 years, indicating that most employees leave a company within a few years. Sound like family? Do your family members leave your family after 4 years? Do you get a new brother every 4 years? No. (If you do, I’m sorry.)
So, back to the shoe stores. What was my first advice for this business? Hire employees, not family. Define their jobs very well. In detail. Teach them how to do the job the way you want it done. Then, involve them in the process development of the processes related to their job. This gives them the right kind of ownership in their job and it’s growth. It gives the business owner the same thing. Treat them as a valued employee by progressing their career path. Give them the clear path to progress not only in your company, but beyond it. Why beyond it? Because that’s how you can be a good employer as a small business.
You want them to move on. You want them to progress and move on to a bigger company that can pay them more. It’s better for them and better for you. You need to cycle your employees through the different levels of pay rates so that you can easily control costs, and so they can progress in life and be happy. Happy ex-employees will usually mean better quality employees trying to get hired. It will usually also mean a better perception of your business in the community. Ex-employees can be your best advocate, or your worst detractor, usually based on how their employment ended. Think about it.
If you have an employee that starts at the bottom and works their way up to a management position, what is next? They can’t become owners next (unless it’s time to sell the business, and they probably cannot afford to buy it). So, are you just going to keep paying them more for a job that you could pay someone else less to do? That wouldn’t make sense for you. Doesn’t make sense for them either because, eventually, they are going to feel trapped. They know they can make more elsewhere. They may even just assume that you are willing to keep increasing their salary every year or two, which eventually decreases the profit margin. That is NOT a recipe for success for anyone involved.
Instead, how about clearing defining every job at your company, and every process necessary to do that job. Then using that documentation and training program to verify that each employee has the piece of mind to know what they must do in their job, and how success will be measured. Train them not just for your jobs, but in a manner that highlights skills that will help them AFTER they leave your employment. Be supportive and proud when your employees have mastered what you taught them, and use that mastery to move up somewhere else. In a way, that should be your goal. This process while sharpen your internal documentation so that the normal negatives related to losing employees (Head Knowledge, Experience, etc.) are no longer an issue. If anything, new perspectives from new employees are a positive for businesses. They can actually separate you from your competition. That is real success.
Yeah, but who has the time, right? Well, that is where we come in. At Altacentric, we help you define things. Goals. Processes. Training. Employee costs. Task costs. We even help you define why you are in business at all. All of it is important. Most importantly, we make the cost of doing these things fit in the overall plan designed to bring success, true success, to your business. Contact us today.
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