Peter Economy in his article “Recruit and retain the best people” opens with a question. Is it better to have hired quality employees and lost them, or never to have hired at all? What do you think?

Further on, Mr. Economy echoes the advice of Jim Collins, who in Good To Great told us how important it was to not only get the right people on the bus but once on the bus see that they’re seated in the right seats.

So how do you do this and if it were so easy, why is turnover such a problem? Patrick Lencioni cites in The Advantage (not an advertisement, just a damn good reference) that in order to compete, companies need to be smart and healthy. That is, if you don’t have the fundamental disciplines of strategy, finance, marketing and sales you can’t even compete. These are the ante for getting in the game. Everyone must hire this talent to survive today and should. I’d suggest the answer to the question is embodied in his latter point. The best employees want their work to have purpose, want to enjoy a bit of autonomy as they get the job done and need to know there is growth and personal development ahead.

You don’t cultivate the healthy environment that provides for these needs without intentionally setting out to develop a culture that embraces a healthy view. Culture more than anything else; more than strategy, more than process and over the long term, more than Intellectual Property (IP) will provide the sustainable competitive advantage you’ve sought but that has probably eluded you. This is not a touchy feely discussion point! This is all about strategy and return on investment. This is about profits and its a very effective weapon not easily duplicated by your competitors.

Mr. Economy goes on in his article to give examples about how you might work to retain employees with flexible schedules, pets in the workplace etc., but I think he misses the more fundamental point. When an organization thinks enough of itself to identify the behaviors critical to its mission, when it thinks enough of its employees to provide the environment to work in that they demand, a special thing begins to evolve. A culture emerges that works as a magnet for the right people and a repelling force for the wrong ones. The time and treasure saved in starting here, in building your culture as the foundation of your recruitment and retention policy is the better choice. Strategies will come and go as the environment we compete in changes. A culture of like-minded individuals behaving in concert with a vision of the future they all want to enjoy, now that’s something sustainable that your family business can carrying into successive generations.

So was it better to have the good ones for a little while as opposed to not at all? “Some studies (such as SHRM) predict that every time business replaces a salaried employee, it costs 6 to 9 months’ salary on average”. If you read the report I’ve linked to here you’ll discover the cost rises precipitously as the salary increases. What is often lost in this discussion is the opportunity cost of institutional knowledge that walks out the door with the talent you are trying to retain.

So get your compensation ducks in order, maybe bring your pet to work but for heaven’s sake commit to developing a culture that is aligned with your mission and one that will endure.

Feel free to call us to see how we can help.

Retention: The Key to a Sustainable Competitive Advantage