Not Business As Usual: Human resources primer, Part II
While the Human Resource function is often broken down into recruitment, selection, training and development, performance appraisal, compensation, and labor relations, these topics obviously comprise different processes at different times. For example, while recruiting and selection sequentially make sense, the compensation question has to be addressed before any hiring will take place. At a different point and time, performance appraisal or training and development might be tied to compensation. And of course, labor relations almost always include a significant component of compensation.
Entrepreneurial managers and owners need to recognize that compensation involves so much more than just the traditional salary component. From health and retirement benefits to vacation days to ongoing training to company cars, there are a myriad of options that can and should be explored in putting together a competitive compensation package. The key here is for every entrepreneurial manager to recognize that in this arena your competitors are not only your traditional product or service competitors, rather they are every other company who might have the need for the skills and talents of the person you are interested in hiring. Another point to recognize is that as a startup or small company, you most likely will not be able to offer the same level of “traditional” (read “money”) incentives that larger companies can. Your creativity and freedom in structuring the “package” is your distinct advantage.
To capitalize on this advantage, however, requires an entrepreneurial manager to deviate from that one trait that all large companies seem compelled to follow—standardization for the sake of standardization. Having the flexibility and the confidence to move away from the “one size fits all” of compensation packages allows you to tailor your offer to suit the needs of that talented individual. Doing this with distinctiveness and value allows you to differentiate yourself to a prospect in a way that forces the prospect to make some value judgments on workplace styles and requirements. If you’ve done your homework, this value judgment in your favor is your vindication of your ability to put together a package that best suits an individual’s needs.
Consider for example two demographic groups that represent a tremendous source of untapped talent for those companies that can address their individual needs. The first group consists of talented women who initially stepped off the corporate ladder to raise a family but, as family conditions have changed, now find themselves with excess time and unfulfilled talent. The second group consists of those more mature individuals who have plateaued or perhaps even taken early retirement from their former employers. Both have the desire to contribute but need something different than what the traditional marketplace will offer.
Now neither of these groups will work for free, but you may be surprised just how valuable a flexible schedule can be. Add an “above market” bonus based on performance and you start to have the ingredients for a difference that has an importance. The point is that discussions with people you need can lead to solutions that they need. When this happens a unique employment relationship of mutual benefit is immediately established, one that bodes well for future success.
Following a successful international business career, John Riddell, who resides in Tabernash, turned his attention to small business/entrepreneurial pursuits that included corporate turn-arounds, start-ups, teaching as an adjunct business school professor, authoring award winning business and sports columns, and serving as vice president for the Chattanooga Chamber of Commerce directing its Center for Entrepreneurial Growth. He can be contacted at firstname.lastname@example.org.
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