- Talent Management
Somewhere along the way a lot of small businesses got it into their heads that because they’re small, they don’t need to put the time and effort into establishing a clear talent management strategy. It’s high time to blow that myth out of the water. Just because you’re a small business doesn’t mean you can skip having a solid talent management strategy. If anything, being small makes the strategy piece even more crucial. After all, you have to figure out how to do more with fewer resources. Because of this, developing and executing a talent management strategy can feel like a daunting, even overwhelming task to many small businesses. Take a deep breath and relax, it’s not as hard as you may think it is.
Employee turnover can wreak havoc on small businesses. With fewer employees to begin with, each one is critical to the overall success of the company. Losing a key employee can literally put the entire organization at risk of a serious tailspin from which it can be difficult to recover. Having a solid talent management strategy will help you greatly reduce the costs of turnover, which are more than you probably think. To fully account for the cost of replacing an employee, you have to consider the following:
Some of those costs are hard to quantify, but those who have studied the cost of replacing an employee, such as the Society for Human Resource Management, a ballpark estimate would be anywhere from 50% to 60% of a salaried employee’s annual compensation just to find, hire, and train a replacement (source). This means that for an employee making a salary of $50,000, it’s going to cost you anywhere from $25,000 to $30,000. But again, those are only the direct costs. When you throw in all the other costs, it’s more like 90% to 200% of an employee’s annual compensation. The costs rise with the level of the employee, which is why the ranges are so wide.
Clearly, it’s in the best interest of any small business to make sure you hire and retain the best talent to begin with, and that’s why you need to put the time and effort into establishing a talent management strategy. Here are some examples of good strategies for small businesses:
First impressions. You need to put your company’s best foot forward if you hope to attract the talent you need. This means paying particular attention to your online presence, including your website and social media platforms. All of these need to wow prospective employees.
On the same page. It’s especially important that all key players are on the same page about what makes the company a great place to work because in a small business, pretty much everyone ends up being an ambassador for the workplace.
Attention to detail. Because of how critical each employee is in a small business, you have to put the extra effort into making sure you hone in on the specific skills, attitudes, and behaviors you need from each position. Job descriptions must be detailed and comprehensive about expectations and requirements for each area of responsibility.
Networking. Expanding your social connections and participation in key industry associations and trade groups should be a top priority for every small business. Finding the right talent to hire is a whole lot easier when these networks are robust and active.
Finding, hiring, and retaining the talent you need in your small business doesn’t have to feel like rocket science. Taking the time to formulate and execute solid talent management strategies will be more than worth the effort.