Learn from these 13 entrepreneurial business owners, on how they solve their staffing challenges and what they learned the hard way.
Content in this guide
- Mentor, don’t micro-manage
- Start out lean, so everyone pulls their weight
- Hire only the necessary, not the sexy
- A team that will take the reins
- Choose the right person for the job
- Being a servant leader
- Transparency is the key to success
- Develop a company culture
- Avoid hiring them until you are ready
- Value your team
- Value character above ability
- Hire people like you
- You can’t encourage problem employees to succeed
Finding and retaining talented individuals is one of the most challenging aspects of running a business. Learn from these fellow entrepreneurs, about how they solved misunderstandings or what they did to bolster their systems and processes to retain those talented key individuals.
1. Mentor, don’t micro-manage
A common trait amongst busy managers is to attempt to micro-manage and control the activities of their employees. This tends to make your employees feel less committed and unproductive, and studies have shown that 80% of micro-managed team members are more likely to leave in their first year of employment. By inspiring your employees, they will be more focused, motivated and committed. Inspired employees also stay with companies longer, compared to unmotivated team members.
CEO of Shanduka Group, Phuti Mahanyele says: “I am allergic to micro-management. I cannot work with people who do not show interest and commitment. My biggest strength is that I do not fear strength in others. I celebrate it. That easy ability to work with the most capable, most intelligent people has been key in my life, as those are the ones who move you forward. I do not feel like I need to be competitive with anyone.”
Related: Sigma Capital is built on not settling for less
2. Start out lean, so everyone pulls their weight
Keeping your company lean when starting out will assist you in having a flexible business that can adapt quickly to changing circumstances. Additionally, it will ensure that every member of your team is of the highest calibre, because as soon as there’s a weak link it is immediately visible and will need to be addressed.
When you’re starting out, you need to be inventive says Neil Murray, co-founder and chief technology officer of Mimecast: “In our case, we first needed an extra developer at the outset, so we found a deep techie [whom] we knew was taking a sabbatical. He had the money to survive while he played around with code, which made him perfect for us. We couldn’t pay him, but he’d be on the ground floor of something great. We pitched the business to him, and he agreed to join us.”
Murray believes: “It’s all about finding the right person. The extra developer is still with us. For the first two years we operated with a tiny team. Tiny teams can be very efficient, mainly because there’s nowhere to hide. Everyone has to get all their work done.”
3. Hire only the necessary, not the sexy
When adding members to your team, it’s better to ask yourself whether this person is right for your business or if they just talk a big game. When you’re filling positions, it’s important to know whether you really need the person or not, could someone else cover the function or is it essential that someone new joins the team?
The partnership behind Rocking the Daisies decided early on that they needed a ‘numbers guy’ to be part of the team. They decided that this person’s role was so important that to keep him invested they made him a partner.
“When Craig’s brother, Marc Bright joined us, he started by sorting out our books, which were a disaster,” says Brain Little co-founder of Rocking the Daisies. The growth of the business tripled, year-on-year, as did Marc Bright’s role.
“We now have someone who was thinking strategically about the numbers, which made a big impact on our decisions, and how we viewed our income versus expenses,” explains Craig Bright co-founder of Rocking the Daisies.
“In many ways we’ve been victims of our own success, learning where our gaps are as we’ve grown,” says Little. “It’s important to be aware of these areas if you want your business to scale, and so we’ve focused on finding problem areas in the business and implementing solutions.”
Related: How Craig Bright and Brian Little launched Rocking the Daisies
4. A team that will take the reins
A scalable business can’t rely solely on the founder. You can’t perform every function and you can’t be the only one who knows where the company’s going. By implementing systems and processes, as well as employing key personnel to fill strategic positions, you can rely on your team to run your business, and you can focus on its trajectory.
Absa Cape Epic founder, Kevin Vermaak reveals: “I’ve now reached a point where it’s time to step down. In the early years, I played an operational role. I often worked through the night getting everything ready for the event, and then spent time with our sponsors during the race. As our team grew, some amazing people took the reins, which allowed me to step away from various aspects of the business and concentrate on our growth strategies.”
5. Choose the right person for the job
When developing your business, you should upskill your team. This will allow you to keep employees for longer and you’ll be able to promote them from within. By hiring from within first, it will increase loyalty, engagement and productivity across your entire team. Keep in mind that by hiring from within, and promoting your current employees, you won’t have to deal with unexpected performances from new staff or growing pains when new people join a tight-knit team.
Ryan Bacher, co-founder of Netflorist explains: “Our business is built on efficiency, and that’s achieved by systems, processes and people. We promote from within a lot. Three of our four warehouse managers were promoted from within, and our fleet manager started with us as a runner who assisted the drivers. Promoting from within encourages a great work ethic, because everyone knows there is room to grow if they work hard and work well.”
Related: Netflorist's tips on when to say ‘no’ to revenue
6. Being a servant leader
A servant leader focuses on the growth and well-being of their staff and their business. Instead of the traditional business model, where the top of the pyramid has all the power, servant leadership shares power and puts the needs of the team first; while helping them to develop and perform as productively as possible.
Sorbet co-founder, Ian Fuhr explains: “The most important group of people in Sorbet are our staff. Without them, we can’t be successful. Our core value is ‘servant leadership’, which basically means always putting our customers first. But to do that, we need to put our staff first, and then they pay it forward.”
Fuhr personally conducts all induction training as part of the servant leader model. “My focus isn’t on what you do or how you do it, but rather why you do it. Our staff need to believe that we’re not selling treatments and products. We’re selling a feeling. People want to feel good about themselves, and that’s what we give them.”
7. Transparency is the key to success
Transparency embodies honesty and open communication. Being transparent is about your business revealing information and being upfront and visible about its future direction and upcoming hurdles.
In a business where there is an alignment between standards and values, there is no fear in raising or disclosing difficult issues. This open line of communication allows for a faster course correction or application of problem solving measures.
“Transparency with your staff goes a long way,” says co-founder of Dial a Nerd, Colin Thornton. Closing 12 branches was the hardest thing we’ve ever had to do, because we knew consolidating the business meant letting half of our employees go. We opted for full transparency every step of the way. As we saw the revenue of a store dropping, we’d work closely with the manager to keep it as profitable as possible, but always being clear that once the store cost more than it made, it would need to close. This level of transparency meant that employees were looking for new jobs during the process, and we fully supported them.”
Related: Why Dial a Nerd radically changed its business model for growth
8. Develop a company culture
A company with strong, adaptive cultures benefit from lower labour costs, greater employee and customer loyalty, and a smoother growth in leadership. Your company could become a better place to work, with a clearly defined and followed company culture in hand. Having your entire business believe in the company culture and striving to reach those goals on a daily basis is a powerful thing that can increase your business’ productivity and profitability.
PrivateProperty’s Justin Clarke urges you to: “Hire for culture. Bringing in great people is the most important thing that you can do. But, hiring senior executives can be challenging, as they come with experience, which also means they have their own views on how they want things done. Normally, people arrive and absorb your culture, but some will try to change it. We have made this mistake and it didn’t work out, and the whole experience cost us a lot.”
9. Avoid hiring them until you are ready
Don’t allow yourself to be wowed by bigshot executives who say they can bring in the big deals. Just because these executives are running a section of a R100 million business, it doesn’t mean they know how to scale your business from, for example, R7 million annual profits to R15 million annual profits. Ensure that the person you hire has experience dealing with a business of your size, and knows how to scale up your operation; otherwise they will cost you in both a large salary and months of work hours you’ll never get back.
Tim Legg and Deseré Orrill, founders of Ole! Media Group, say: “Don’t hire too soon.” In 2011, as their business started enjoying increased revenue and deal flow, Legg made the decision to hire three senior execs.
“They promised to bring in big deals, and we thought we needed some top skills. The results were a disaster. Only one brought in any revenue, and the salaries were so big that we needed to scale back our office space to accommodate the drain on our cash flow. We were massively overstretched.” Once the founders rid themselves of the ‘deadwood’ and all excess fat was trimmed, the business returned to profitability within a few months.
Related: 5 Tips to hiring the best employees
10. Value your team
If you want your team members to stay with your company, you need to show them that they are truly valued. Let them know that your business would be worse off without them and that they add value that no one else can. Show your employees that others in your office also rely on them and that they are appreciated. Keep your employees engaged, this will help them to get through the grunt work and be inspired by the more challenging assignments.
If you want to make an employee feel valued, it’s ok to single them out and reward them accordingly, instead of rewarding everyone with a group celebration. An employee might not feel singularly acknowledged by a group celebration.
Founders of Hello Group, Nadir and Shaazim Khamissa believe: “Your team is everything. We have two core groups, and without them there would be no Hello Group. The first are our field staff and agents on the ground, who interact with their communities, ensure our product reaches the target market and send suggestions back to us, allowing for constant improvements to our services.
The second is our head office team, including a young executive that we recruited, and our management teams. We believe in transparency and debate. They [employees] believe in what we’re doing, and are always looking for disruptive innovations.”
11. Value character above ability
Steven Kark, founder of Paycorp, believes: “The decision on who to hire should be more about EQ than IQ. A middle manager must have the technical and intellectual capabilities required for the position, but when it comes down to choosing the right person for the job; character is the most important deciding factor. We’re not IQ driven, we’re character driven.
“We have two full-time people, the best in the business, responsible for human capital and leadership development, on-boarding and retention. We understand how important our people are to our success.
Even with all of these systems and expertise, we still sometimes get it wrong. Always remember that while sub-par performance can be worked around, and worked on, negative attitudes affect everyone on the team. There’s always collateral damage. We have 538 employees, and they’re all important. We’ve learnt how destructive one person can be to a harmonious work environment. Bear that in mind, first when you’re hiring, and then if a hire doesn’t work out. Always try and find an amicable conclusion, after all, both parties are generally unhappy if there’s a culture gap, but never ignore the problem.”
Related: The importance of brand
12. Hire people like you
Conventional business practice dictates that you hire for skill, but Danny Aaron and Tom Goldgamer, founders of 3 Way Marketing and Benater Production Group, have done the opposite. The majority of their early hires were friends, or friends of friends, who had strong referrals and Aaron and Goldgamer only hired people they liked. Today, 3 Way Marketing is more than 180 employees strong and over 300 people work in the Benater group, but they still use this principle when hiring new staff.
“We hired people who we thought could help us grow the business, not necessarily because they possessed the right skills, as those could be learnt, but because they had the right attitude,” says Aaron. “Every new graduate has a line manager and a senior person overlooking their development, so training and mentorship continues on the job. You don’t need to hire for skill if you’re willing and able to upskill internally.”
13. You can’t encourage problem employees to succeed
“We’ve learnt two big lessons over the past few years,” says Sam Paddock, chief executive officer at Get Smarter. “The first is that if you want buy-in from your staff, you need to be communicating with them all the time. Everyone needs to understand and embrace the business’s strategy. The second is that performance management, particularly in a growing company, keeps everyone focused.”
“We come from a very nurturing household,” adds Rob Paddock, chief of education at Get Smarter.
“Our mother always encouraged us to believe that we could achieve anything we set our minds to. While this is a great entrepreneurial attitude, it caused some problems when we were dealing with non-performing employees. We had this idea that with the right encouragement, the problem would go away. It took us a while to realise that some employees can’t be coached into better performing team members. You need to be honest and clear upfront. If you’re not clear on good performance or bad, how can you expect your team to know?”
The brothers then received invaluable advice, they were told to read Mastering the Rockefeller Habits, by Verne Harnish, and to implement the learnings from the book. “Implementing the Gazelles system was a complete game changer for us,” says Sam Paddock.
“It gave structure to employee management and staff reviews, it rewards team members who are focused and achieve results, and it gives everyone a clear framework of what’s expected of them, which in turn makes employee management objective instead of subjective.