Your small business needs some talented employees at the top to help it grow, but you are competing against the “big dogs” for the best.
It can be difficult to match the compensation, benefits and facilities that these behemoths offer. You shouldn’t try. Your small business has other things it can offer to prospective employees that larger competitors can’t match. Consider promoting the following advantages:
A senior human resources manager we know was interviewing at one of the Fortune 500 companies in town. She was also interviewing for a post at a much smaller company. At the smaller company, if hired, she would become the vice president of human resources. She would assume responsibility for all aspects of human resources, report to the president and sit on the executive committee. Plus, she would also have input into the company's strategic direction.
At the larger company, she would receive more compensation, better benefits and sit in a nicer office. But she would work in one narrow area of human resources with little opportunity to influence company policy. In the end, she opted to join the smaller company.
In smaller firms, employees get to wear more hats. You will want to point this out to prospective employees.
A newly divorced, mother of one left her position at a large hospital to join a small home health care company. The compensation and the benefits were not as good as at her previous firm. But the home health care business could offer her flexible hours that let her dovetail her work with her daughter’s schedule. The large hospital simply couldn’t grant her such flexibility.
As a small business owner, you can adapt your policies to grant more flexibility perhaps than larger competitors.
Larger companies might grow much more slowly than smaller ones. Fortune 500 companies are so large that it's almost impossible for them to expand 50 percent or 100 percent a year (other than through acquisition, which brings more people and often results in layoffs rather than opportunity).
Smaller companies can often scale up at more rapid rates. When larger companies are growing slowly (or not at all), logjams can result among the senior ranks. Advancing can be difficult or impossible.
Rapidly growing smaller companies can often offer significantly better opportunity for advancement.
A senior executive at a well-established business left his position for startup. His new job drew a significantly lower base salary and limited benefits. But the executive negotiated for a compensation plan that had significant upside if the startup did well. In fact, the executive stood to make significantly more at the small company if it flourished than he would have at the larger business.
The startup's owner was willing to offer this potentially lucrative compensation package because if the incoming executive did well, the owner would do even better.
We most often, but not always, recommend against offering ownership in privately held companies. We do support well-structured profit-sharing programs. For smaller companies with significant growth prospects, such programs can offer a meaningful upside that can compete with or exceed what larger companies can offer. Structuring these programs can be tricky. But a carefully crafted program can be a powerful tool when competing with larger companies for talent.
Competing for talent with the “big dogs” can be challenging for small businesses. With a little creativity and ideas such as the ones above, however, you can find ways to compete and win.
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