We recently had an employee leave us to work for a larger catalog company. We replaced that individual with someone from another catalog. Around the same time, we created an Internet position that we filled with another person from another company within the catalog industry.
While this is common in any industry – companies “steal” workers or lose their best employees to rivals all the time – it’s going to get a lot worse for catalogers, particularly within the next year. The surge in e-commerce has created more opportunities for catalog marketing and fulfillment personnel, so we’re going to be competing for talent with new “born to the ‘Net” companies and with retailers adding a Web presence, as well as with fellow catalogers.
The noncatalog “dot com” companies are starting to realize that they need the skills and experience now sitting and standing in our offices and warehouses. Many of these large, well-capitalized companies can offer unprecedented financial incentives to attract top-level management as well as employees with creative, marketing, merchandising, and operations expertise. Take a look at the classified ads in industry trade publications, or spend some time on the Monster.com Website checking out the help-wanted ads posted by companies looking for individuals with catalog experience. At our company, I’ve noticed an increased number of calls from head-hunters looking for recommendations.
What can we do?
Given catalog industry margins, most of us can’t offer outrageous salaries, substantial raises, and huge bonuses to counter employees’ other opportunities. But with a little research and creativity, you can find ways to attract and retain good people, from offering stock options or flexible hours to practicing open-book management (in which a company shares financial information with its workers so that all employees know how the business – and they – are doing). Now is the time to examine your human resources policies and practices, looking for programs that will energize and excite your employees – and interest candidates in working for you.
Our employees deserve a culture that recognizes them as the precious and valuable resources they are. The following tips could help you create distinct competitive advantages:
- Free workers from endless policies and procedures – those in place “because that’s the way we’ve always done it.” Work with management and human resources to eliminate unnecessary steps and restrictions.
- Help employees balance work and family with programs or policies such as flexible scheduling. The days of bragging about 60-hour workweeks are over – don’t risk losing great employees to burnout.
- Allow your workers to celebrate the company’s successes. Strategies such as an employee stock option plan (ESOP) can help motivate and involve your workers in the business, as can distributing a portion of the company profits with your employees when possible.
- Provide all employees with the chance to be heard, individually and at company meetings.
- Eliminate any status barriers that create unnecessary distinctions among employees, such as differential benefits and reserved parking places for top management.
You can’t ignore that there’s more competition for talent in the catalog industry. You should identify your best workers – those who are most at risk. Talk with them about their career development, let them know how important they are to your organization, and ask them what they need from you to continue to grow and thrive in your organization.
If you lose your key people, you’re going to have a hard time replacing them, now more than ever.
When we started Good Catalog Co. in 1992, we planned to either sell or take the company public in five to seven years. To entice talented people to join a start-up catalog that we planned to build quickly and then sell in a few years, we decided to offer an employee stock option plan (ESOP). Our attorneys helped us draft a plan that called for 14% of the company’s stock to be granted to every employee and some freelancers, with a five-year vesting schedule that management could accelerate at its discretion.
The process of setting up an ESOP required some decisions, time, and money, but the results far outweighed the investment because 1) the options included all employees regardless of job description; 2) we set initial options at a fairly low price that was sure to have a healthy appreciation; 3) each year we had an outside investment banker’s valuation, so employees knew the increase in their options; and 4) we thoroughly explained how the plan worked and our expectations.
We also decided to practice open-book management (OBM), which enables all employees to understand and have access to the company’s financial performance. Combined with an ESOP, OBM lets employees know that their stock options are real and growing in value. Even without an ESOP, open-book management gets employees involved with the business.
If you can’t hire a professional to launch an OBM program, several books and seminars on OBM can help. You might introduce OBM with a game, such as “guess our expenses,” which will have your employees looking at the business from a financial viewpoint.