According to a recent survey by recruiting firm Korn/Ferry, 98 percent of the corporations say succession planning is important, yet only 35 percent have a plan in place.
So why should you care? Well, I’m guessing that if global, public entities with shareholders and boards haven’t created a plan for replacing key employees, it’s even less likely that small business owners have one.
I’m not talking about a succession plan for yourself; hopefully, you’ve already taken the necessary steps to protect your business and your family in case something happens to you. But what would you do if one (or more) of your key employees suddenly quit tomorrow?
As entrepreneurs, our businesses are our “babies.” And we’re so wrapped up in achieving success that it’s hard for us to view them from an outsider’s POV. The reality is the business that means everything to you, but to your key employees, it’s just a job. You need to be prepared, especially as the economy continues to improve, to lose your key players.
Here are five ways to keep your top staff, or at least lessen the impact if they do leave.
Face the facts.
All too often we avoid thinking about what would happen if any of our core people left. But burying your head in the sand puts your entire company at risk. So sit down and make a list of your key employees, what they do, what skills they have, and why their role is so crucial. Then list some options for what you’d do if any one of them announced plans to leave.
Try making it harder for key employees to leave by giving them a reason to stay. What motivates them? Luckily, your business is likely small enough that you know whether they covet a title, prestige, being a decision-maker or money? Tailor your offer to the person, making sure, of course, you’re not running afoul of any legal issues regarding compensation or benefits. Providing financial incentives tied to company performance, such as bonuses or profit-sharing, is a great way to help key employees feel invested in your company’s success.
Have a backup plan.
Cross-training employees to handle each others’ duties is a smart way to build a backup plan. This may be a little harder to do with top-level staff, but even they are likely to have some duties that can be shared with other employees. Cross-training eventually helps you create a “bench.” You may not have an employee who can pop right into, say, your marketing director’s shoes when she leaves, but you will have someone who can fill that role long enough for you to figure out your next steps.
Communicate with your staff.
What are your employees’ hopes and goals for their careers? Is there a new skill your CFO would love to learn that you don’t know about? Don’t just talk to the key employees; talk to everyone at every level. By learning what lower-level employees hope to accomplish, you can work with them to create a career path that benefits both them and your business.
Having key employees mentor others in your company is not only a great way to team build, and but also fosters stronger relationships among the staff. This bond can often anchor people to your company, making them think twice before leaving their friends behind.
In truth no employee is irreplaceable, but if you’re the kind of boss who telegraphs that sentiment to your staff (and I’ve worked for a few of those types), you’re only going to hasten their departure. It costs money to replace any employee. But when a key staffer leaves, the cost is higher. You stand to lose valuable skills, customer relationships, and institutional knowledge. Can your business sustain that kind of a hit? Following these steps can help you stop the brain drain from your business. And that will make you a stronger and more sustainable company.
Rieva Lesonsky is CEO of GrowBiz Media, a content and consulting company that helps entrepreneurs start and grow their businesses. Follow Rieva at Twitter.com/Rieva, and visit SmallBizDaily.com to sign up for her free TrendCast reports.
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