Thinking Big For Small Business—BizBOOM.com

Leslie Rose McDonald is the founder and president of Pathfinders Career Transition Services, Inc. in Liverpool, which specializes in selection and retention consulting services, corporate outplacement and relocating partner assistance. Leslie has more than 20 years of business management and human resource development experience. Her corporate roles have included professional recruitment, employee relations, training and development, succession planning, career counseling, and management consulting.

A graduate of State University College at Cortland, Leslie is the career columnist for the Syracuse Newspapers, where her column "Workplace Wellness" (formerly "Career Tracking") appears weekly in the business section.

John M. "Mac" Sabol, SPHR has over 18 years experience in Human Resources in the areas of organizational development, recruiting, training, and career development. Prior to joining Pathfinders as Vice-president, he was Principal with the Sabol Group - a human performance improvement consulting organization focused on change leadership and innovative organizational development to growing businesses.

Mac has earned Bachelor's and Master's degrees from Bowling Green State University and has been certified as a Senior Professional in Human Resources (SPHR) certification since 1990. Currently, he serves as Immediate Past President of the Central New York Chapter of the Society for Human Resource Management (CNY-SHRM, Inc.).

Q: What is the actual turnover cost to my business for each person who leaves my company?

A: A lot more than one would think. Most business people factor in the "hard costs" involved - the cost of advertising the position, the cost of your time meeting with potential candidates, etc. However, don't forget that there are other, significant hidden costs, including: cost of administration for COBRA benefits; cost of your time to plan the search for a replacement; cost of unemployment. (Even though you do not have to pay for a voluntary termination, you might still be responsible for unemployment costs in future claims). Finally, there is the cost of "lost legacy knowledge" and getting a replacement up to speed - often six months or more of training time. Add all this up and the turnover cost per person costs between 1.5 - 2 times the person's annual salary. Turnover is too expensive for any business to ignore.

Q: What are the biggest motivators for my employees? Aren't they Good Pay and Benefits, Job Security, and Growth Opportunities the Top Three?

A: In a survey recently conducted by a major consulting firm, over 5000 individuals at all levels of a cross spectrum of companies were asked this question. The top three responses were: Interesting Work, Appreciation for Work Performed, and Being Included in Business Communications ("Knowing what is going on"). Job Security and Good Pay were in the middle. While security and pay are important, employees are more motivated by knowing that they are informed of business conditions, contributing to the business's success and being acknowledged for their contributions.

Q: What kind of rewards do I need to provide to my employees? I am a small business owner, and cannot afford to be paying out lots of bonuses.

A: Most rewards come at little or no cost. Personally acknowledging an employee for a job well done, placing a picnic table to use during nicer parts of the year, awarding an employee a gift certificate to a local restaurant, even mailing a birthday card to an employee's home - all of these are very effective with little or no cost. Another reward that means a lot to people is extra time off. Family and personal time is of growing importance to many workers. Get creative! Consider giving top performers an incentive of extra days off for meeting certain objectives. These can be saved for times when the business is slower than usual.

Q: Why should I pay the costs for a consultant or recruiter when I can do what they do myself at less cost?

A: The real answer lies in "What is the worth of your time"? The key to successfully use a consultant or recruiter in your business lies in areas of knowledge expertise and time savings. As a small business owner, you are constantly faced with the challenge of time - you are Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, etc, all rolled into one. By taking advantage of the knowledge and expertise of a trusted business partner, it allows you to focus on what is necessary for your business to succeed - those activities that are vital to your success, but may take more of your time. Smart business owners recognize that they have abilities in some areas (to leverage), some areas in which they are not so strong (which they outsource) and seek assistance from outside. You probably already have an accountant to assist you with your business finances. Similarly, successful business people also recognize the need for and seek out other Human Resource planning and process assistance. They see the cost not as a liability but, instead, as an investment in their (and their organization's) future.

Q: What are some cost-effective ways to find good talent?

A: One way that is very effective and cost-effective is through employee referrals. Your employees know your organizations and culture. If they are happy and satisfied, they will be enthusiastic about inviting people they know into the candidate pool of a company that they love working for. And, because referrals are considered to be reflective upon themselves, your employees are unlikely to refer talent that is not capable, reliable, or a good fit for your company. If you like, you may consider an incentive, "thank you" gift or referral fee for your employee's efforts.

Q: Should I use an assessment tool when hiring employees?

A: When an appropriate and legally compliant assessment tool is utilized, it can greatly enhance the quality and objectivity of the hiring process. Suitability assessments are becoming increasingly popular as organizations realize the cost to the company each time a position needs to be replaced. There is nothing more frustrating, especially to a small business, than a new hire that does not work out. When an assessment tool is used, the traits measured must be relevant to the position's requirements. The assessment should never be the sole source of the hiring decision: it should generally have a weight of 25-30% in the selection decision, in addition to the candidate's qualifications, experience, and your own well-done interview process.