Building a business from scratch requires a capable team at every step, from serving the first customers to securing an enduring presence in the community.
But unlike products, revenue, or marketing, people can be ever-changing and complex. Tracking and adjusting their performances takes solid people skills. That’s why small business owners need a crash course in management.
With a little knowledge and the right tools, anyone can learn to spot promising candidates, encourage standout performances, and keep great employees committed to the business. Here are 9 steps for cultivating people and drawing out their best efforts.
1. Put together an attractive package
In a tight labor market, small businesses need to get creative to land employees.
The first step is to make sure the pay scale is competitive for your state, city, or vertical. What are similar businesses paying? Can you push the hourly rates beyond theirs? Higher pay has been linked to both higher productivity and better customer service. Check out some of the compelling research here.
What about other compensation-related tactics? Paid time off, commissions, bonuses, and profit sharing can be great incentives for attracting and motivating employees.
Another way to stand out is to offer a 401(k) retirement savings plan. According to a roundup of compensation trends, only 38% of small businesses help their staff save for the future. By investing in people for the long run, they’re more likely to commit to the business in return.
But money isn’t the only way to make people happy. Low-cost perks such as coffee, snacks, discounts, and free tickets are easy ways to build good will.
Another no-cost winner among job seekers and employees is thoughtful scheduling. More than anything else, employees want to know they can count on a regular schedule, swap shifts if needed, and get time-off requests honored. They appreciate employers who help them juggle their complicated lives.
For employers, erratic scheduling can quickly lead to departures, as people land more manageable jobs. Look into team management software that can both reduce scheduling headaches and solve employee complaints.
2. Create a workplace people want to join
Giving people predictable hours and sharing schedules far in advance are components of a much larger goal—building a company culture that employees will love. It’s an ongoing process with no one answer for how to get there.
As the celebrated entrepreneur Richard Branson noted, “There’s no magic formula for great company culture. The key is just to treat your staff how you’d like to be treated.”
Great bosses, for example, value and praise their people. They ask for and listen to ideas from staff. They’re respectful of others and enjoy time together, whether it’s a casual meal or an informative meeting.
Small business owners should regularly assess their strengths and weaknesses, and continually strive to be the best boss they can be. The payback will be stronger applicants and more committed employees.
3. Cast out your net
For many small businesses, the single most effective recruitment tool is word of mouth. When people enjoy working at a business, they tell their friends about it. Referrals require little effort and offer an element of prescreening. Merchants might even offer a referral bonus once a new employee reaches a specified anniversary.
But often the search needs to go further. If online postings are used, consider what top candidates look for in job descriptions. In a nutshell, be sure to clearly state minimum requirements, note the hourly rate, and play up any perks, such as free meals, flexible schedules, or training opportunities.
There’s no need to sweat all the details. To make the mechanics of hiring a little easier, outsource the task to apps. Homebase, for example, offers free HR resources, including pre-written job descriptions, new hire forms, hiring guides, performance reviews, and more.
4. Spot valuable players
Sometimes perfect candidates appear with the experience, skills, and personality to jump into a job. But for many small businesses without the resources to lure star employees away from competitors, the applicant pool can feel lackluster, filled with students and other new workers.
Here’s where a shift in thinking can help. Inexperience can actually be an advantage, especially if effective hiring practices are used to turn outsiders into insiders. Rather than bringing bad habits from previous jobs into the establishment, newcomers can be taught the essentials from the ground up and molded into valuable workers.
Another hidden advantage is that lack of experience lets business owners look past skills and focus on what really matters: attitude. Employees are the face of the business, so they’ve got to stay engaged and positive in every situation. Use the interview process to find out how candidates face tricky situations.
Are they empathetic to different perspectives? Do they have the patience to deal with frustrating people? What about their problem-solving skills? Here are five questions to ask before hiring for customer-facing positions.
But hiring isn’t always for entry-level jobs. One of the most important roles a growing business needs is an effective middle manager. Read on for tips about how to land a manager who will improve operations, jumpstart growth, and simplify life—so the boss can go on a needed vacation.
5. Train your people well
The quicker people learn their jobs, the better the business will run. Yet restaurant and retail employees seem to constantly come and go, leaving business owners scrambling to get people up to speed.
Don’t skimp on training. Give new hires the knowledge they need to jump into their jobs successfully, and enlist the assistance of experienced employees. When possible, try to hire two or more employees at the same to double the impact of training time.
Merchants might even streamline and automate the training process. Using checklists and original or free tutorials, employees learn the basics of safety, customer service, the brand, or other general topics. Check out these 9 strategies to reduce the cost of employee onboarding.
With an annual turnover rate among hourly employees hovering at 50%, consider ways to keep the team happy, engaged—and intact. Research shows that playing to employees’ strengths, communicating regularly, and investing time in employee development helps slow the revolving door.
Training never really ends, of course. Over time, merchants should teach employees every aspect of the business and fine-tune their skills. For example, fresh checkout scripts and improvisation exercises help cashiers upsell, cross-sell, and personalize the customer experience—skills that turn training into a profit-boosting operation.
6. Communicate effectively and often
It’s easy to get sucked into the frantic pace of daily life, with everyone focused on completing tasks. But healthy businesses marked by high levels of trust prioritize communication.
Business owners clearly articulate their goals. Employees feel free to share ideas and take charge of solving problems. Meetings and get-togethers are regularly convened—even if it’s just a huddle before the doors open.
Brief, focused staff meetings, in fact, can build camaraderie and boost employee knowledge. Open up team meetings by honestly reporting on the state of the business, both good and bad news. People appreciate having hard facts, as well as opportunities to contribute ideas.
Meetings are also a great place to tap the expertise of top performers and leverage it to drive sales. Get people to share their tips and skills, whether in the kitchen or on the floor.
For many businesses, superior sales techniques distinguish the most effective employees. Ask employees to role-play being customers, and let the sales wizards show how it’s done. Simulating real-life scenarios makes sales pitches, product knowledge, and even insights into the customer more immediate and actionable.
Merchants can also use meetings to assign and report on projects, whether it’s rethinking the reservation system or revamping deliveries. Read about these and other ideas for running staff meetings that trigger concrete improvements.
Communication can happen anywhere. It can take the form of casual conversations or even in the way processes are set up. In restaurants, for example, communication breakdowns between the kitchen and the customer-facing staff can wreak havoc on the ordering process. Improving communication between front- and back-of-house also improves the customer experience.
7. Help people step up
One of the most effective ways to engage employees is to empower them. That means teaching them the business, listening to their ideas, and giving them opportunities to grow.
Even part-time and seasonal workers crave learning new things and taking on more responsibility. A Colorado adventure company, for example, draws its young staff back summer after summer by helping them move into management positions, funding EMT training, and offering other avenues to progress in their careers.
Given that part-time workers dominate small businesses, it pays to cultivate them and help them feel like they’re significant contributors. Ask for their opinions and observations, and find out if they have hidden talents they’d like to try out in the business. You never know where your next social media guru or sales display artist will come from.
Empowering people can slow employee turnover and slash the cost of replacing people—$18,000 annually for a restaurant with 30 employees. By giving trained employees the autonomy and responsibility they crave, employees will be motivated to go above and beyond for customers.
Learn more about how to empower the staff with a free 20-minute webinar that reinforces the information in this post.
8. Face problems before they fester
Nobody likes to deal with employee problems. But when someone is underperforming, it’s time to act. Not only do they reflect badly on the business, but weak coworkers can also drag down morale.
First step is to make sure people understand how to do their jobs. Have they been properly trained? Do they know what’s expected? Are unexcused absences the result of last-minute rescheduling on your part?
If you can help the employee, do so. If problems persist, HR professionals recommend progressive discipline. The process might start with a verbal warning, proceed to a written warning, then a suspension, and finally termination, each thoroughly documented in writing to avoid legal exposure. Apps such as HR Resources provide performance review tools and corrective action records to safeguard the process.
For more serious problems such as stealing or drinking on the job, the employee must be let go quickly and definitively. Follow up with the team to explain what’s happened.
While removing a poor performer can often energize the team, sometimes the entire staff feels dissatisfied and disengaged. Gossiping, excessive tardiness, burnout, lack of effort, a spike in turnover—all of these symptoms point to problems that need to be addressed.
Positive tactics such as recognizing people, giving them predictable schedules, offering opportunities to grow, and encouraging communication can help reverse negative behaviors and reignite employees.
9. Celebrate together
The writer Maya Angelou once said, “People will forget what you said, people will forget what you did, but people will never forget how you made them feel.”
That powerful observation can be applied to business. At the end of the day, we remember our jobs and coworkers by how they made us feel.
Cultivating a positive, supportive workplace might be the most important thing business owners can do. An easy way to do that is to recognize birthdays, milestones, and individual accomplishments. Foster a culture where employees recognize each other’s great work.
Consider group activities such as volunteering, a meal out, or an informal party held after closing. And don’t forget to get away from it all from time to time. Shared experiences, such as picnics, outings, and even affordable overnight retreats can be bonding experiences for the entire crew.
Sure, people can be fickle and frustrating, but they’re also critical players in every small-business success story. Be the boss who people love and build the workplace they will commit to.
Clover is sold by leading U.S. banks including Bank of America, BBVA, Citi, PNC, Sun Trust and Wells Fargo. You’ll also find Clover at our trusted partners including Ignite Payments, Restaurant Depot, and Sam’s Club. For more information, visit us at clover.com.