To Lure and Retain Talent, Middle Market Firms Should Use Their Natural Advantages
To succeed in the long term, most middle market firms must rely on innovations that produce organic growth and efficiency. Of course, you need the right kinds of thinkers and doers to achieve such innovation. What becomes a problem for middle market firms is that larger corporations desire such people, as well. The biggest companies often have the financial resources and name recognition to sway top talent toward working with them. However, there are many ways for middle market firms to attract and retain talent. Interestingly, the majority of them are not centered around compensation.
Smart Hiring Practices
Well-strategized hiring processes not only serve to land strong talent but also to retain talent.
Firms should key in on specific personality traits they want their employees to display, such as natural curiosity and sociability. If certain skills of high import are not polished enough in your new hires, train them with a focus on improvement. It's also important to note that a candidate's perspective is a critical part of his or her personality makeup. Asking job applicants the right questions can go a long way toward revealing what makes them tick on a professional level, and can help companies make decisions on whether a candidate will succeed and stay at the firm for a long time.
On the other hand, the vetting process is a two-way street. Companies should articulate what makes them uniquely desirable to prospective employees. Privately-owned middle market firms, for example, should explain why working for them might be a more positive, progressive experience than working for a corporation.
Employee Retainment: Learning and Recognition
When looking to retain important employees, companies should note that while key performers desire advancement opportunities, these advancements don't necessarily have to come in the form of replacing someone above them. As new products or services are created, a firm could appoint new leaders to manage them. Managerial or executive mentoring should complement the process, aiding not only the innovations' success but also cultivating the satisfaction and loyalty of the key performer.
Other approaches are possible, too. A Brandon Hall Group webinar reported that, rather than managing a career path that is solely within the firm, successful companies focus on career-enhancing strategies. Employees should have the opportunity to learn skills that support their professional growth, regardless of their exact roles. Mentoring to build confidence, training to build competency, and networking to build connections are all methods that can help employees develop career skills such as inquiry, innovative and critical thinking, analytical and emotional intelligence, social presence, and dialogue.
Brandon Hall also noted that in order to achieve a self-learning environment, firms should support the formation of employee groups that discuss career aspirations, hold meetings where workers can discuss protocols surrounding their roles and get advice from experts or higher-ups, and establish resources for employees to keep learning and gaining new skills.
Furthermore, an October 2013 article by fellows of the National Center for the Middle Market stressed making self-guided development a central part of a strong performer's job. This can be achieved by emphasizing routine and informal learning opportunities, encouraging co-worker communication of new ideas and knowledge, enabling employee autonomy through the formation of teams, and promoting self-evaluation.
Also, strong performers should be rewarded with desirable work-related experience. An employee who is doing well should be handed the chance to have more responsibility and do more extensive work. For example, send a hard-working employee to an industry conference and have him or her report on it for the rest of the company. This serves several purposes: It motivates the employee through recognition and opportunity, creates a chance for the whole company to learn something, and promotes said employee as a leader in the workplace.
Lastly, don't let issues related to your basic work space diminish your company culture. Design spaces so that they promote a healthy environment, comfort, and a balance of privacy and easy interaction. Equip employees with up-to-date technology so that the work process flows smoothly and with a minimum of aggravation.
Even when dealing with the compensation aspect, middle market firms can still employ creative approaches to satisfy strong performers and retain talent. Doing so further demonstrates an innovative culture that isn't smothered by the structure of larger companies.
While it is often difficult to match the base salaries that larger firms offer strong performers, financial incentives can be more flexible at middle market firms. For example, a company could base compensation on specific employee targets. Corporations typically have firm pay structures and won't allow unique exemptions.
For the middle market, the projected median increase for compensation in 2013 was 3 percent, according to the July 2013 WorldAtWork Salary Budget Survey, but this figure could rise to 4.5 percent for top performers. Many companies planned to increase tuition reimbursement, as well, but there are opportunities in other areas, too.
A November 2013 report by NCMM entitled "The State of Healthcare in the U.S. Middle Market" found that 90 percent of responding executives view healthcare benefits as critical components of employee recruitment and retention.
Mid-sized firms are embracing strategies in two areas that serve not only to reduce healthcare costs but also to attract and retain top performers: implementing wellness programs and providing on-site or remote healthcare. The NCMM report found that 62 percent of the surveyed firms provide workplace wellness programs, either as part of their health plan or as a customized offering, which helps employees make informed decisions about their health and benefits usage. Thirty-five percent subsidize participation in programs ranging from weight loss to fitness through reimbursements or negotiated discounts.
Furthermore, 18 percent have developed permanent on-site facilities that provide healthcare services by a physician or nurse, while another 37 percent are considering doing so if healthcare costs rise as projected. Lastly, 21 percent of mid-sized firms currently offer health savings accounts (with some partially company-funded), while another 60 percent plan to implement them if cost increases meet expectations. In total, these medical-related offerings enhance the overall value proposition for top performers in addition to saving money for companies.
As middle market firms seek to assemble a strong team for the long term, they should cultivate environments in which opportunities for greater professional development, innovation, and rewards are abundant and available.
Rob Carey is an NCMM contributor and a features writer who has focused on the business-to-business niche since 1992. He spent his first 15 years at Nielsen Business Media, rising from editorial intern to editorial director. Since then, he has been the principal of New York-based Meetings & Hospitality Insight, working with large hospitality brands in addition to various media outlets. Circle him on Google+.