Most startup and emerging small companies are fairly unconcerned about human resource functions in their company. In fact, some entrepreneurs have a sense that human resources are all about strict guidelines, red tape, and ridiculous rules enforced by the HR Police- all things that could impede the growth and dynamics of a fast-growing company.
However, you can’t ignore the HR essentials that help you develop your company culture, attract and retain top talent. These HR essentials are necessary to promote highly effective workplaces where employees remain satisfied and likely to stay with your company.
Job satisfaction is linked to employee engagement and employee retention. Here are some key findings in the 2017 Job Satisfaction and Engagement Report by the Society of Human Resources, (SHRM) that justify the need to develop human resources strategies for employee satisfaction and retention:
- Two out of five employees (40%) expressed the possibility of seeking employment outside their organization within the next year.
- The leading reason for workers to stay at or leave an organization was compensation/pay.
- The largest percentage of respondents in this study indicated that the respectful treatment of all employees at all levels was a very important contributor to their job satisfaction.
So, what do these key findings mean to you and your workforce? These findings indicate that if you want to attract and retain top tier talent, you need to focus on two primary areas- company culture and compensation.
As the SHRM findings indicate- employees who work in a respectful company culture are more satisfied. Satisfied employees lead to lower employee turnover. We all know the pain and cost of high employee turnover in today’s competitive job market where the demand is greater than the pool of job applicants. Therefore, it is important to develop programs that support a company culture of respect and mutual trust.
Developing company culture is much more than planning birthday events, employee recognition or happy hour gatherings. Developing company culture includes employee engagement, relationships with managers, employee development and alignment to the company’s core values. Many entrepreneurs and business owners aspire to have a dynamic company culture during the inception of the company. Monitoring company culture becomes more challenging as companies grow and new teams are formed.
The first step of creating a dynamic company culture is to determine the culture drivers in your company that support your company culture. Then you can develop programs and initiatives to support these. Your company culture drivers can include:
- Recruiting strategies directed at hiring people with the traits to support your company culture.
- Employee engagement initiatives that encourage employees to speak up and provide their opinion.
- Management practices that include providing regular employee feedback, model respect and support the development of team members.
- Training and career development programs that invest in the advancement of the employees.
Since compensation continues to be a major influence for retaining employees, getting it right is critical. Developing a sound compensation strategy is more than determining employee wages. Compensation includes wages, bonuses, commission and benefits. Compensation varies from company to company depending on the size, industry, a number of years in business and geographic location.
Find out what other companies are providing and compare it to your offerings. Most important is to determine what the employee values in their compensation package. Ask them how important medical benefits, retirement benefits, time off, volunteerism, flexible work schedule or working remotely are to them. Then build your compensation package so that it is competitive and attractive to your key employees and future job applicants. Once you establish your compensation package, continue to evaluate it each year to ensure it remains competitive and effective.
Although there are many human resource strategies tied to the success of a company, the HR essentials of compensation and company culture are critical. If your compensation strategy is effective and your company culture is healthy, then most other “people processes and programs” are likely to succeed as well.