Small firm syndrome - employee-related mistakes to avoid

Marlon Mai May 27, 2014 3 mins read

As a headhunter, I’ve come in contact with numerous employees from small domestic and foreign enterprises. When discussing with them about their career development and motives for quitting, they all bring up factors such as company platforms, salaries and potential for raises. After some digging, it became clear to me that the larger issue is that bosses focus too heavily on their firm’s growth while overlooking employee-related issues, thus resulting in high-employee turnover.

Most small businesses will experience a period of rapid development during which they establish their position in the industry. As they grow and as the market changes, however, the competitive advantages on which they originally relied begin to erode, putting a damper on further growth. In the face of intensely competitive market environments, it’s easy for bosses to find themselves swamped by myriad demands such as business responsibilities, divisions of authority and innovative capabilities, thus leading to problems with the recruitment and utilisation of employees.

These types of problems generally manifest in the following five ways:

1. Preoccupation with short-term returns

When new employees arrive, the company is anxious to see immediate results. If the worker’s performance isn’t ideal right off the bat they might be let go. Managing and developing employees should be a process of cultivation and investment. When hiring, firms should be thorough and prudent; when managing their employees, they should be patient.

2. Only punishments, no rewards

Corporate management should be focused on incentives. Companies should draw on each employee’s strengths while at the same time working around their weaknesses. Perusing the worker manuals and management regulations of a few small companies, I’ve noticed that many of them center on prohibitions, restrictions and punishments while overlooking incentives. Company rules should not mirror the legal system—positive, reward-based policies are more likely to keep employees motivated in their work.

3. Restrictions on use

Companies put restrictions on employees based on their time spent at the company and/or risk management considerations. This can turn talented, ambitious workers into mediocre, unmotivated workers. During the interview process, these companies often don’t make enough of an effort to gain a measured and complete understanding of candidates or communicate their own requirements.

4. Choosing employees in their own image

During different periods of development, a company will always be in need of various types of employees. Most hiring personnel, however, seem attracted to candidates who share their values and ways of thinking. When faced with this phenomenon, it’s important that bosses practice self restraint and make an effort to accept a wider variety of workers with varying skillsets..

5. Relying solely on money to attract talent

Many different types of enterprises mistakenly think that money can always purchase the needed talent. This is not the case. High salaries are always attractive, but truly talented individuals will never sell their time for this one factor alone.

Marlon Mai's picture
Managing Director | Finance & Accounting, IT, Sales & Marketing Recruitment
mmai@morganmckinley.com