Through my three decades in the business world, one factor has been consistently important in assessing the potential of early-stage companies. Those that achieve high growth and lasting success share one thing in common: extraordinary talent.
No matter the industry, superior talent makes it possible to take your startup to the next level. Of course, like anything, this isn’t as easy as it sounds – especially now. With so many startups getting substantial funding, early-stage businesses are engaged in an unprecedented talent war.
The more well-capitalized the early stage landscape becomes, the bigger the turnover problem for all of us. An evaluation of case studies by the Center for American Progress found that the median cost of turnover equaled “21 percent of an employee’s annual salary” – and the numbers were even higher for executive positions.
Businesses of all sizes face tough competition in hiring and retaining the best talent – especially in a historically low unemployment cycle. If you want your company to grow steadily over the long run, you must learn to identify extraordinary talent and take steps to retain, nurture and develop these individuals. Here are a few ways to assess your performance in this department.
1) You believe in mutual feedback and two-way evaluations.
An interview is the traditional starting point in the hiring process — but often isn’t enough to gauge a prospect’s talents and abilities. Nor is it always sufficient in providing prospective employees with an idea of what working for your company will be like. This can result in costly hiring miscues, which are especially damaging to a young company. Two-way evaluation cycles are an effective technique to mitigate the problem.
At my company, Loeb.nyc, we’ve found that an annual summer internship program is one of the best ways to engage in a two-way ‘get to know you’. This thoughtfully developed program avoids the all too common ‘coffee and Kinkos’ experience. It ensures that students are active participants in the startups we place them in, where they make meaningful contributions and engage in weekly two-way feedback sessions.
This system has proven highly successful in placing great interns at the right jobs — we now have over 1,000 qualified students applying for a mere 40 positions each summer.
A great internship program — or trial employment period — is like an interview on steroids. It gives the company the opportunity to evaluate the prospective employee to determine if they are a good fit. But it also gives the prospective employee the chance to see if the company provides the right work environment for them.
A great internship program — or trial employment period — is like an interview on steroids. It gives the company the opportunity to evaluate the prospective employee to determine if they are a good fit. But it also gives the prospective employee the chance to see if the company provides the right work environment for them.
By the end of this “two-way evaluation” period, both parties should have a clear understanding of whether they are a good match. This won’t just help your business find top talent — it will also ensure that you hire individuals who have already bought into your company culture and mission.
The Gap Inc. is one large employer that has embraced two-way evaluations. Through its “Grow, Perform, Succeed” process, Gap replaced annual reviews with monthly information exchange sessions between employees and their managers. The process has been lauded in case studies written by Harvard Business School and others.
2) You’ve built a community with different types of members.
Trying to articulate and assess a good cultural fit is important but it can be something of a trap. If you don’t try hard enough, collaboration and chemistry become more difficult; but if you try too hard, you can find your people looking at problems through just one lens. In reality, the best model for building a large pool of extraordinary talent is to create a community of human beings with wide-ranging approaches to problem-solving.
This allows each member of the team to learn from one another and expand their own toolset, they’ll begin to apply different approaches to different problems. This community dynamic will foster greater collaboration and produce faster and more optimized performance. Different personality types and a variety of styles can create a beautiful business harmony.
In fact, Jennifer Kahnweiler, author of The Genius of Opposites, has said: “When opposites work together, they can step fully into their strengths for the benefit of the project in ways that teams without opposites could not. Mutually complementary roles often emerge when opposites team up to meet an objective, and the outcome is often better than anyone anticipated.”
Creating an environment where all contributions are valued will help you keep the best talent.
3) Your staff and business value continued learning.
One of the best ways to hire and retain the best talent is to value learning. A survey by BetterBuys found that when professional development opportunities are available, employees are 15 percent more engaged, while companies have 34 percent higher retention rates. In the same survey, an overwhelming majority (92 percent) of employees stated that “having access to professional development was important or very important.”
The most talented workers prize the opportunity to continue learning and honing their skills. They have a natural curiosity — and growth-minded companies will offer several avenues to satisfy this demand for learning. Apple and Wells Fargo, for instance, offer employees tuition assistance of up to $5,000 annually. Proctor & Gamble believes in ongoing education so much that it will reimburse up to 80 percent of an employee’s education expenses up to a generous limit of $40,000.
I’ve found that providing wide-ranging access to continued learning can deliver immeasurable value over time. Yes, our company pays for business school and contributes to continuing education classes. But we also run an ongoing speaker series, and conduct group excursions to emphasize experiential learning and team building.
The end goal is feeding natural intellectual curiosity. Creating an everyday environment that stimulates our talent is rewarding across the board and helps our people contribute in ways they might not have contemplated previously.
The end goal is feeding natural intellectual curiosity. Creating an everyday environment that stimulates our talent is rewarding across the board and helps our people contribute in ways they might not have contemplated previously.
The best talent is eager to take advantage of educational opportunities not only to broaden their competencies but also to identify and enhance their strengths. Creating a learner-friendly environment will ensure that each team member gives their best and continues to contribute over the long term.
By understanding it takes time to recruit the best talent – and effort to engage and advance that talent – retention should improve and become an important driver of your business. This is critical, as it will help your early-stage company achieve the growth it desires.
