Are you a small business owner? Do you have employees? Would you consider any of them a key person? A key employee is one who contributes significantly to the financial success of the business or who is responsible for management decisions, has a significant impact on sales or has a special rapport with customers and creditors. A key employee also may be your secretary or right-hand person.
According to Andrew Carnegie, the value of key employees cannot be understated. He said, “Take away my people but leave my factories, and soon grass will grow on the factory floors. … Take away my factories but leave my people, and soon we will have a new and better factory.”
It is important for you to take the time to evaluate each employee, their value to your business and how it (and you) might suffer if you lost them. Consider both the short- and long-term effect each of the following items would have on your business as you evaluate how their loss would impact your business.
The loss of their management skill and experience, especially in a business with little management depth.
The disruption to your business when a client withholds or delays business dealings once they know the employee has moved to another business or perhaps has passed away (or become disabled).
Your creditors know who your key employees are; will they view your business as less credit-worthy without that employee?
The increased cost of hiring and training a replacement.
Their emotional/relational role in the business with other employees.
Have you identified one or more key employees? How would your business be affected if they became disabled, passed away, changed careers, left you for a competitor or became your competitor? Each one of these scenarios could affect your business in different ways. It is time for you to take another look at each employee with these scenarios in mind. I’m not advising you to become suspicious of your staff, but rather to acknowledge how important each one is to the success of your business. Chances are they already know how vital they are, and they are waiting for you to acknowledge their contributions and loyalty.
Here is my challenge: Go online and search the many lists outlining the top 10 reasons employees stay or leave a job. Remove your “business-owner” blinders and take an honest look at the state of the emotional and relationship connections you and your company have with your employees. Key employees stay when they can focus on doing great work and contributing to growth while trusting they will be fairly compensated. Are you giving your key employees more reason to stay than just a paycheck? If not, now is the time to make changes.
For creative ideas on tax-deductible financial and emotional incentives to help retain your key employees, contact me. I’d love to meet with you and share my ideas.
Kathy Rogers is the vice president of Marston Rogers Group, a life planner and financial consultant. Reach her at (228) 206- 5902 or at firstname.lastname@example.org.