(MoneyWatch) How can a small business compete for great employees when there are giant companies that will pay people even in the hereafter?
I've always found the insurance term "death benefit" to be a darkly humorous oxymoron. But Google (GOOG) takes it seriously: Among the search giant's famously generous benefits is one that keeps paychecks coming after you've punched out for good.
According to Forbes, If you die while employed at Google, the company will pay your surviving spouse or partner half your salary every year for 10 more years, your stock will vest immediately, and even your children will get paid -- $1,000 a month until they turn 19 (or 23 for full-time students). When it comes to compensation packages, that is -- literally and figuratively -- game over.
Google's deal is certainly extreme and unusual (having $40 billion in the piggy bank doesn't hurt), but many other companies also offer exceptional benefit packages, even in this moribund economy.
So can a small company with limited resources attract the best and brightest, when these employers are dangling such irresistible goody bags in front of prospective candidates? Yes, it can.
First of all, far more people want to work for these "dream companies" than there are positions available. Most sources suggest that Google gets around a million applications a year and rejects 95% or more. So that's over 950,000 people who went after the benefit jackpot but didn't land jobs. Multiply that by all the other long-shot employers, and that's a big talent pool on the hunt. Some might never consider small business, but when it accounts for 60-80% of new jobs, statistically many will.
Second, even with its pay and benefit leverage, big corporate life isn't for everyone (I've been there and know it's not for me). Certainly people want to make as much money as they can and be well taken care of, but countless studies have shown that most people are willing to trade some tangible material rewards for other things, in particular:
Job security: Small business drives the economy and creates most of the jobs, and as a society we are becoming increasingly entrepreneurial. So joining a good, growing small business can be a smart long-term career move. Obviously, all businesses go through ups and downs, and a business can shrink or fail at any size. But when a big company fails, downsizes, gets acquired, or moves operations geographically, huge numbers of heads can roll. On the other hand, most good small business people I know take pride in getting and keeping good people, and consider it a responsibility and privilege. And losing even one or two good people can create significant pain for a small company. So for those who lose sleep at night over job security, a solid small business can make for a warmer blanket.
Culture: Always one of my favorite subjects -- the heart and soul of any great company. To be sure, there are big companies with strong, identifiable cultures. But in my experience they are the exception and not the rule -- it is more difficult to establish and maintain a true, cohesive, quality culture in a giant corporation, for obvious reasons. On the other hand, a great small business can create and nurture a genuine, living culture that guides everything it does and creates a common bond among people who know and depend on one another. And in turn, those people have something to say about how that culture evolves.
Work environment: As with culture, small companies don't have a monopoly on great work environments, but let's face it, there's a reason that cubicle cartoons and working-life jokes aren't usually about small businesses. And "environment" doesn't have to mean beautiful furniture or a cappuccino maker; it can mean a place where people don't look over shoulders, or at the clock, a place where the boss buys lunch once in a while, a place where, er, everybody knows your name. Most people want to spend the majority of their daily ration of waking hours someplace they enjoy being.
Responsibility and recognition: Here's an area where I don't think any large company can compete with a small one. Of necessity, most employees of small businesses will get as much responsibility as they can possibly handle. And tied to that is the knowledge that recognition of their results -- good or bad -- is obvious and immediate. Great employees stand out, poor employees stand out; neither gets credit stolen or false blame placed. No layers of bureaucracy to stand in the way of getting noticed.
In my family's last business of about 100 employees, we once hired a guy away from a big, famous corporation. On his first day, I was helping him set up his office and suggested that he might be more comfortable if we moved some of the furniture. His response was "great idea, who do we call for that?" I tried to suppress my laughter, grabbed my sleeves, tipped my chin at him and said "roll 'em up." To me, that will always be a classic example of the difference between the two worlds.
It goes without saying that you have to pay people as competitively as you can, and you're wise to find and provide every benefit -- big or small -- that you can possibly afford; all the touchy-feely stuff in the world won't pay the mortgage. Employees know when a company is not doing as much for them as it could be, and if their material needs are not being met they won't (or can't) stay long.
But the opportunity is in the margin. With so many people willing to trade some income for a bigger "quality-of-life" picture, a good small business can attract and retain great employees -- even if it can only afford to pay them while they're alive.
Image courtesy of Flickr user star5112