One of the toughest parts of running any business is recruiting top talent and getting that talent to stick around. But when you oversee a small business, the challenges become a little bit bigger: How can you compete with the bigger companies' deeper pockets to give your employees an experience that makes them want to stick with you?
Consider Jim Sinegal. He's the outgoing CEO of Costco about to finish his nearly three-decade run with the discount retailer he founded. Sure, his company is a big one now, but it wasn't always a national name.
Sinegal has a certain humble flair to his management style that translates well to small business. And regardless of how big his company is, or how much it has grown over the past 30 years, any leader can learn a few things from a CEO who has kept the turnover rate at his large retailer at a meager 12 percent. Here's how he did it, and how your small business can emulate the results.
Costco is well known for offering its employees comprehensive health coverage, highly-competitive salaries and time-off packages. It's definitely an up-front cost to provide these things, but it's not so much a payout as it is an investment.
Particularly when companies choose to first scale back on things other than benefits during tough economic times, employees are more appreciative and more inclined to stick around. It shows them explicitly that you care about their well-being and health—definite points for your business.
Sinegal is quick to say that his choice to provide workers with top-notch benefits isn't an altruistic act. Instead, he says, it's good business.
Keep your office door open
Even as Costco grew into the discount powerhouse that it is today, Sinegal maintained an open-door policy when it came to managing his employees. At a young company, it's important that the few members of your operation can collaborate, share ideas and develop strategies to grow. As the business gets more established, it's important to have open communication with your direct reports.
Keeping your office door open also signals your own openness: something every employee appreciates because it helps build a more comfortable, less oppressive culture in your office. Especially when your staff is relatively small, that's crucial.
Recognize the value of mistakes
Sinegal says his philosophy in running Costco was not to make the same mistake five times. There are two big takeaways here.
First, mistakes are relative, and inevitable. Your business will never grow or become successful if you aren't innovative about how to expand its reach or boost your bottom line. You've got to take risks, and with risks come investments or efforts that don't work out. Remember that, and use mistakes as learning tools instead of casting them aside as failures.
Second, you have to reinvent yourself when your initial idea doesn't flourish. That means taking that idea and tweaking it, testing it, re-tweaking it and re-testing it. Know that in many cases you'll go through several incarnations of the same product or service before you find one that works, or until you've exhausted too much time and energy. When that happens, it's time to move on to something else.
Your willingness to set time aside to interact with your customers and your employees should be no different if you're a one-person operation or if you have thousands of employees. As Costco grew, Sinegal never stopped asking customers what they liked and didn't like and consulting his employees for their feedback.
The benefits are twofold: customers and employees alike appreciate it when you stay visible, and you'll have first-hand feedback to work with.
Don't focus so much on your image—it can take care of itself
Logically speaking, your company's image has to be a consideration—particularly when you're trying to compete and assert yourself in a market saturated with other big, reputable businesses.
But the fact is, if you're focusing on marketing a quality image at the expense of doing the things that would create a solid reputation on their own, you've got the wrong approach. For example, instead of figuring out ways to tout your customer service, focus on making stellar service a key part of your customers' experience. That way, they'll spread the word and build up your image for you.