The constantly changing environment of rapid-growth companies can bring challenges, not least getting the right people on board, and ensuring they stay. But there are many ways to incentivise talent – and they don’t begin and end with remuneration.
According to the Boston Consulting Group, 12.4% of the UK’s economy will come from the internet economy in 2016. This is a remarkable figure considering that, for South Korea, it’s 8%. As a country not renowned for embracing change, the UK is actually in a leading position.
Fast-growth companies in the UK are often rapidly successful start-ups working from a small base – frequently in mobile and other technologies, but also in areas such as financial services. For Dr Jonathan Deacon, reader in marketing and entrepreneurship at the University of South Wales, the key is to understand that the motivations of today’s talent are very different to those of the baby boomers, or even to those of people in their 30s and 40s.
“They are far more loyal to the company they keep than the company they work for – by which I mean that the best of talent will be attracted to firms who share their world view, ethics and purpose.” What an organisation stands for is more important than what it makes or does – “especially the more creative and innovative the organisation”.
Fluid and flexible
In practice, retaining talent becomes harder because younger people do not expect (or have any real interest in) the job for life. The millennial generation “want to work anywhere, any time, any space. They want the challenge to work on projects with tight deadlines and across time zones and cultures. And they want to be enabled to be enterprising and to take a share of the outcomes,” says Deacon. The lesson, then, for organisations is to be fluid and flexible, allowing for and encouraging a variety of experiences, challenges and ‘off-grid’ working.
David Thorp, managing director of the Security Institute, advises listing the benefits of joining a company in its rapid-growth stage. “The opportunity to be heard without having too many levels or layers of management to go through, with quick decision-making and involvement across the business. Emphasise the sense of fun that can be stifled when working for a large, faceless organisation.” To attract the best talent: “Focus on the opportunity to work in less hierarchical organisations, where there is the feeling that individual contributions can make a big difference.”
Different reward methods
Retaining talent is not merely about pay rises. Indeed, salary is not necessarily even the prime motivator any more for the kind of employee that fast-growing companies want to attract. Jimmy McLoughlin, the Institute of Directors’ deputy director of policy, points out: “If the average UK salary is about £32,000, then even a 10% pay rise can be wiped out very quickly by London property prices.” Many people now would rather be given credits towards something else, or offered different benefits. “At the moment, people at the top of the corporate ladder are in their 50s and 60s so the salary-linked-to-property model still dominates. But that’s going to change – we’ll see people attracted by different criteria more and more in the future.”
Focusing on this is a win-win for start-ups and growing companies. “Often, in the early days, you don’t have huge amounts of money even if you’re successful,” McLoughlin says. “So you need to think about the right kind of compensation for the people who work for you.” To do this, be inventive and bring people on side with what you’re doing. “In a start-up, things are busy and fast-changing – so make them feel involved in the vision.”
The most attractive part of being in a fast-growing company is that sense of a journey. “Being associated with a thriving business offers talent the chance to mould futures – without having to circumnavigate the policies of a large institution,” says Jonathan Gabay, author of Brand Psychology. As a result, Gabay asserts that start-ups “are currently the biggest initiatives in business”. He points to an organisation he worked with that, despite tiny beginnings in a London attic, went on to become a global design group. “The interesting thing is that, whilst the company became highly successful, it never recaptured the passion and excitement of those early years working from that humble loft. This is one of the many work psychology ironies of big brands versus small brands – one wants to act like the other in terms of credibility and intimacy.”
Getting personnel issues right
So what practical steps can fast-growing companies take to ensure they are a magnet for talent and reach out to tomorrow’s leaders?
“Career-hunters want four main things,” Gabay says. “A decent wage, meaning, purpose, and fulfilment. A small business, with a great product or service, driven by a talented team offers the individual meaning and purpose to be part of something special. In turn, this provides an aspect that too many companies these days seem to have forgone: genuine personal fulfilment, which money alone can never buy.”
David Thorp emphasises this: “People are much more focused now on their own personal brand. They want to work for companies that make them feel good about themselves, that have a social conscience, and that are going places.”
For any start-up, differentiating yourself from the competition is going to be key. This is true not only externally but also internally. “Think about your HR; think about your office space,” Jimmy McLoughlin advises. “Remember how Google made this a key part of their offering. You might not need sleep pods and climbing frames, but people want to enjoy work – an enjoyable working environment is far more important to potential employees than it was a few years ago.”
The five people growth companies can’t do without
- The visionary: This is likely to be the founder; but doesn’t necessarily have to be so. Whoever fulfils the role, no company will succeed without a clear vision that can be effectively transmitted throughout the organisation.
- The digital literate: No organisation will prosper in today’s marketplace without being technologically hot. There’s a recruitment advantage to this, too. “Quite a few start-ups don’t feel they have the time to recruit properly,” McLoughlin says. “To help this, if you can get the first few key players right, then they will use their networks to put more of the right kind of people in front of you.”
- The wise owl: “Don’t neglect experience,” Gabay advises. “The common mistake that growth companies make is mainly to employ people fresh out of education. Whilst many are enthusiastic and highly talented, to survive today you need more than vitality; remaining agile demands sagacity. There have never been more talented people aged over 50 looking for work than there are today. Use that resource – combine it with the vigour of youth – and your growing company will be on track to becoming a valued business by all.”
- The brand advocate: Growth only comes from innovation and marketing. A strong brand advocate will put clear water between you and your competitors, see marketspace opportunities, keep the company responsive to market changes and provide an ethos that will not only generate loyalty among existing employees but also attract new talent.
- The questioner: “Imaginative people who work outside the box,” says Thorp. “Risk-takers; potential leaders. You need dreamers backed by a solid line of back-office people. As with a good sports team, being hard to beat isn’t enough to win you medals. That’s when you need the creativity in the engine room, and the attackers who can deliver the wins.”
Think about your HR; think about your office space