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How Can a Small Business Compete For Talent?

Let’s face it. Competing for talent is tough no matter what business you are in. The market is extremely competitive. Small businesses and non-profits can face even bigger challenges when it comes to competing for talent. There are realities these companies must face in terms of budget constraints, cash-flow, advancement opportunity, and resources available. A small startup company is not going to have the resources to invest in their people like a large, well-established company. Likewise, a non-profit often does not have the resources that a for-profit company has.

There are many factors that go into competing for talent. These include all the ways that you effectively attract, hire, and retain talent. Much of this is subject to the values of the specific individuals. If they value having a significant impact on the business, a small company may be better suited to provide that opportunity. If they value very broad job responsibilities and the ability to wear many hats, again, a small business may be in a better position to offer this type of work. Large companies are often much more siloed and have more defined and specific work for their employees. These are just a couple ways that small businesses may be able to provide a better work experience for some. Others, however, may place more value on compensation, benefits, etc. This is where it may be harder for small businesses to compete. It is important to identify and leverage your value proposition for employees. Once you do this, it will be easier to identify the right talent for your team by aligning their values with the value proposition of your business. This increases the probability of retention.

Every company has to steward their resources in a responsible manner, and ensure a maximum ROI. This leads to an important question: So, what are some practical things that small companies can do to attract and retain talent? Although this is a tough question to answer, there are some practical things that you can do. Look for ways to monetarily invest in your people within your means. Then, look for creative and less-expensive ways to invest in your people. Here are some practical things that every company, regardless of size, can do to invest in their people and compete in the talent market:

Provide the best compensation and benefits that you can within your means (Don’t try to nickel and dime your people)

Simply put, do the best that you can from a compensation and benefits standpoint. There is no question that limited resources place constraints on compensation. Large companies can often pay more than small companies. Additionally, we all know that insurance premiums are very costly for small businesses. With that said, small businesses should monetarily invest in their people to the best of their ability.

Sadly, some companies decide that they will be stingy with their compensation. When negotiating salary, they take the “as low as I can get them for” approach. This may send a message to employees that you will take advantage of them for as long as you can. Or, you don’t see the value in paying competitively to get and retain the right talent.

A better approach is to do the appropriate market research, establish a competitive compensation philosophy utilizing the available resources, and have a way to determine an appropriate salary for the knowledge, skills and abilities someone brings to your organization. Then, you can discuss the “why” when questions of compensation arise. Even if an employee is upset they can’t get the raise they wanted, they are more likely to respect a well thought out reason. If at the end of the day you have done the best you can, then they have a decision to make.

Build and foster a culture that people want to work within.

Top leadership is crucial to establishing and fostering a great company culture. If leaders do not care about the culture and the everyday working lives of the employees, they will not make it a priority. Thus, mid to lower-level leaders will likely adopt this mentality and focus on the priorities of the leaders. Executives must care about the culture, and hold their lower-level leaders accountable for fostering the desired work atmosphere of the company.

Make sure that your leaders know how to treat people with respect, compassion and dignity.

This should not even need to be stated. However, there are many companies who promote people into places of leadership because they performed well, but do not train them to be leaders of people. Treating people with respect, compassion, and dignity are basic principles that go a long way in terms of engaging people. Yes, business is business and personal is personal. But, leaders should always remember that people are people. They have real feelings, and real life issues. Leaders should treat their staff like people (End Soap Box).

Train your leaders to be intentional about investing time in their staff’s development.

Staff development is an important element in terms of engaging staff. It can take on many forms. Some development can be costly when talking about seminars and continuing education, but there are other ways to invest in staff development. Sometimes, it is a supervisor taking an employee under their wing, understanding some of the challenges they are facing, and helping them work through those things. Or, it can be determining the areas their employee wants to learn about and putting together a development plan. These are things that any company can do. It just needs to be a priority. The staff should see that their supervisors care about their development and are willing to invest in them.

Create opportunities for job expansion and growth.

This could be viewed as part of development, but it can also be called out separately. After employees have mastered their job, they may become bored with doing the same thing. You can look for ways to enhance their role if they have more capacity. Although this will likely require some additional compensation, if you have the need for the expanded scope, you are getting more productivity out of the employee. Don’t be afraid to put some money toward the added responsibility. This also helps to engage employees by creating new challenges.

Be flexible and empower your employees.

Flexibility is something that employees appreciate, and is relatively inexpensive. Sure, there are positions that do not really allow for much flexibility (Example: A cashier cannot work from home). Not every business can allow people to work from home. But, there are several ways to be flexible. Here are just a few ideas:

Limit the amount of restriction that you place on taking paid time off

Allow for flexibility to take care of personal and life issues

Allow people to work from home when feasible

Allow customized work schedules when possible

Don’t make employees turn in doctor’s notes every time they call in sick (Seriously….Don’t)

These are just a few ways to be flexible. People love flexibility. Of course there are those who will take advantage, which is why many employers are hesitant to be flexible. Don’t let the few ruin a perk for the many. Deal with the performance issues, and do what is right for the hard working people of your organization.

Empowering employees goes along with flexibility. Many companies are hesitant to let people work from home because they cannot manage (micromanage) their work performance. Again, there are people who will take advantage. Deal with the performance issues, and reward the hardworking employees. People can be managed by what they are accomplishing. There is no need to micromanage your staff. If you have to micromanage them, then they are probably not a good fit.

Make sure that there is good communication, and your people understand the “why” behind what they are doing.

Good communication is key to every relationship. This is also true in the employee relationship. Small businesses may actually have an advantage over large businesses when it comes to communication. Information can be shared more easily due to the fact that there are less layers and less people in general. Take advantage of this, and develop a communication strategy that ensures employees are getting pertinent information. Helping people understand the “why” is important. Small businesses are in a good position to make that happen.

Operate with integrity and appropriate transparency.

Again, no need to state this, but… Operating with integrity is important. Employees should be able to trust and respect the leadership of the organization. Imagine if you worked for someone who was dishonest and lacking integrity. How much loyalty would you have toward your job? On the other hand, if you have a significant amount of respect for your leaders, you are far more likely to be loyal to them.

Transparency can be a little trickier. There are some conversations that are appropriately held at the leadership level. However, there is also an appropriate amount of transparency that is refreshing for employees. It is nice to be “in the know”. Employees appreciate transparency.

Be open to listening to, and implementing, the ideas of your staff. Reward innovation.

It is no secret that people like to be heard. Many people find great satisfaction in their job simply because they know that they have a meaningful impact. One of the ways that leadership can provide this intangible benefit is by simply (and actually) listening to the people. Employees of a company are often the closest to the actual work that is being performed, and can provide a great deal of insight regarding process improvement and just improvement in general. They can also provide meaningful insight into the employee experience if leaders are willing to listen.

Just listening, however, can actually have an adverse effect. If leaders are always listening, but never actually doing anything, employees will not feel like they are taken seriously. You have to listen, but you also have to act. When you cannot act (going back to communication and transparency), you have an opportunity to communicate with the employee and explain the “why” behind your actions.

Finally, reward innovation. When someone provides a suggestion that turns into a significant improvement, make sure that they are rewarded appropriately. Sure, not every improvement is grounds for a large bonus. But, there are many ways that people can be rewarded for their input. Rewarding innovation will hopefully cause your people to look for ways to innovate and improve your business. Ultimately, this results in greater success for your company.

Recognize the successes of your team.

Don’t underestimate the power of a simple “thank you” or “good job”. People like to know that their accomplishments are recognized. There are many ways to recognize successes, but the important thing is that you do it. It is easy to overlook these things, or to say as some people do “I’m not going to thank them for doing their job”. True, there are minimum expectations for people, and they shouldn’t expect to get a pat on the back for getting out of bed and showing up. But, when your people go above and beyond or achieve something great, make sure that you are taking the time to recognize them. It will go a long way.


These are just a few practical ways to invest in your people without the seemingly endless resources of a large company. None of these things just happen. You have to be intentional about investing in your people. If you want to compete for talent, you have to do things that make people want to work for you. Look for creative ways to make a great employment experience with your company. Hiring and retaining top talent provides you with a strong competitive advantage.

Side note: There are some employees who seem to place the highest value on compensation. That’s ok. They may be better suited to work for a larger company that can afford the higher compensation. But, there are very talented individuals who enjoy working for a smaller company. Be the best small employer you can, and attract the right talent to your business. There is no silver bullet when it comes to retaining talent, but there are things that you can do to put yourself in the best position possible. It starts with understanding the importance of investing in people. Understand your employee value proposition and begin to integrate this into your hiring practices. Make sure that you are looking for talented candidates who’s values align to the value proposition that you are offering.

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