Raise your company IQ

• 19 August 2008
• Page 1 of 2 : single page

Standing at the helm of a fast-moving, fast-growing company is exciting, no doubt about it. The faster and bigger you get, the bigger and better the challenges you can take on. In theory.

The reality is a little sobering: the team that got you where you are today isn’t necessarily geared up and clued up for the challenges of tomorrow. So how do you make sure you have the best possible team on board at every growth stage: hire or train?

How much time do you have?

If you need to react quickly, as a general rule it’s easier to hire in the new skills you need. If, however, you have more time to react, it’s usually better to develop the skills and knowledge of your loyal employees first so they can grow with the company.

Buy vs build?

The skills crisis is extremely challenging for small business owners who want to lure top talent away from the corporate sector.

Bob Olivier, director of specialist recruitment firm the Olivier Group, which publishes a monthly job trends report, encourages small business owners to have faith.

“Don’t be intimidated by the big end of town – you have things they cannot offer,” he says, adding that one of the first places you should look for suitable talent is your current team. “You need to understand your staff and communicate with them. While the cost saving of recruitment is the obvious benefit, the main reason to do this is to ensure that staff see you can provide career path and personal development opportunities. If they believe this, they will stay longer.”

The risk of making mistakes when casting your net for new talent is reason enough to look inside your own walls, according to Cratis Hippocrates, general manager of Open Universities Australia, an online higher education service that offers degrees from seven major local universities.

“It depends on the potential of the individual and the urgency of the business need, but it is always preferable to develop people who have proven themselves to be an asset. Developing people is almost always a lower risk strategy than hiring.”

Anastasia Ellerby, managing director of Infohrm Group, explains that companies often need to hire in specialist professional roles or to top up their talent.

“Hiring versus training is not a binary issue,” she notes. “It requires a blended approach. Growing your own talent gives your company a competitive advantage. Research shows that internal promotion, for example, provides a greater return on investment than hiring in.”

John Banks, director of Talent2, says the decision to hire or train depends on the individual training needs and development of current staff.

“Essentially it is necessary to do both: hire in skills and ensure thorough training of existing staff to keep the business fresh with new thoughts and ideas.”

Why should staff learn?

More money and better working hours are high on almost every employee’s list of wants. However, meeting these terms isn’t enough to keep good people working with you.

“It ain’t just about money – it’s all about job fit these days!” says Hippocrates. He notes that professional development, training and share incentive schemes are all increasingly popular rewards for modern workers.

Training as a reward? Indeed. Olivier suggests employers need to find each employee’s trigger point and work on it. “Most people want to improve their lot in some way – whether it be sense of achievement, professional pride, job satisfaction, money,” he explains.

Banks points out that career development is a huge incentive – bigger than money – because it’s a solid investment for employee and employer. A recent Talent2 survey of 2,661 employees revealed that 89.7% would prefer to stay with their current employer if they were offered training and development courses to help them further their career. Employees saw this as their employers making a strong commitment and investment.

“Constant communication, feedback and development motivate your workforce to upskill and develop,” says Banks. “People can learn at all levels – it is a matter of understanding their capacity and providing development to help them succeed in their jobs.

“Regular performance reviews and identification of problem areas will make you more money and help retain employees. Learning and development are ever more crucial in a short labour market.”

Employees want you to be clear where their jobs are headed, warns Hippocrates. They want you to map out the possibilities for progression.

“Listen to your staff and their ambitions,” he says. “Analyse if that works for you as an employer and then place that employee in a position where they feel they are coming to work and making a strong contribution. The engagement has to work for both parties.”

“Motivating staff to upskill needs to be embedded in regular honest conversations with staff regarding their performance,” explains Ellerby. “These conversations will reveal development requirements in their current role or skill areas that could be developed for other roles in the business. Managers or supervisors must not underestimate the value of their communication skills. There is no substitute for open and frank conversation.”

The final word: train!

As our industry experts are all quick to point out, unless you desperately need to fill a number of skilled vacancies tomorrow, you can best achieve long-term growth with a loyal, well-trained team.

“Developing people is perhaps the most rewarding thing an employer can do,” points out Hippocrates, “People stay loyal to the company way beyond their time if the balance is right. You can win an ally for life and that can work on a whole range of levels.”

While extensive training may prove too big a challenge for frenzied small businesses, Ellerby believes some of the challenge can be addressed internally.

“It is critical for business owners who can’t send their staff on training to think creatively about leveraging the skills of other people in their business for mentoring and coaching,” she says. “Careful research will uncover plenty of free public seminars and training. And business owners must not underrate the value of affordable public education as well as self-directed learning.

“Utilise partnerships with suppliers and customers for job swaps or secondments, which will build a greater breadth of understanding in the employee about the full life cycle of the end-to-end business.”

“Provide training and sure, some staff are going to leave anyway,” muses Olivier. “But if you don’t provide any training and development many more will leave – and they’ll leave sooner!”