Economy

First impressions count in retaining SME staff… Servant-CEO?… New house price data… Nail salon opportunity

SmartCompany /

First impressions count even more for new SME employees

New employees decide to leave an SME in a much shorter time frame compared to those at larger organisations, with more than half deciding in the first month, according to new research by consulting firm Chandler Macleod.

In fact, 8% of SME employees decide on the first day of their new job, compared to just 1% of employees from larger organisations.

What this means is that SME employers have to impress quickly. David Reynolds, executive general manager of Chandler Macleod, says: “It’s all about delivering on the promises made to jobseekers during the hiring process, and about making new employees feel welcomed and part of the team as quickly as possible.”

The good news is that once they stay, SME employees generally stay for longer than their larger company counterparts, with around a quarter of staff in larger organisations leaving in the first two years, compared to just 10% of SME staff.

The research shows that SMEs and big businesses attract candidates in different ways. Smaller companies are more likely to outsource to recruitment agencies or use employee referrals than larger businesses – 10% of SMEs rely on referrals compared to 5% of large businesses.

But SMEs are less willing to tailor employee benefits for candidates, which is a missed opportunity, says Reynolds. Because while SMEs may not be able to compete on salaries and perks, they should be able to address the specific and individual needs of staff.

It was found that 33% of SMEs are planning on becoming an “employer of choice”, but Reynolds warns against relying on these kinds of labels in attracting staff.

“Candidates are sceptical about the title of EOC,” he says. “Many have had promises broken or benefits that never came to fruition. SMEs must be prepared to follow through and truly deliver an employment environment of choice for their employees; otherwise it could be money and resources ill-spent.”

Given the fact that 61% of SMEs surveyed listed current or previous employees of a company as having the greatest influence on a candidate’s decision, word-of-mouth can be hugely beneficial but can also be very detrimental if you’re not ready to deliver on your employee promises.

Advice for SMEs

Do

Don’t

Make sure you make time to consult with staff regularly to find out what staff benefits will be of most benefit

Don’t make promises to candidates that you aren’t sure you’ll be able to deliver on from day one

Consider innovative solutions to help retain staff, particularly if you’re in a field where it is difficult to provide career progression – why not consider a job swap scenario with a supplier?

Don’t underestimate the influence of employee word of mouth to attract new employees. Unhappy staff won’t attract new candidates; they may in fact dissuade potential employees

Make an effort to make new employees feel welcome, take the time to check in on them frequently from day one

Don’t invest money on becoming an ‘EOC’ without carefully considering exactly what you’re trying to achieve, and how the changes will align with your business and truly benefit staff

Make sure employees feel comfortable to take advantage of employee benefits. What’s the point of giving employees perks if they feel penalised for taking them?

Don’t make big decisions about new employee benefits or workplace enhancements until you’re sure you’ll have the capacity and resources to follow through with them

 

Are you a servant-CEO?

Meanwhile, Inc.com has advice for business owners trying to retain staff through modifying their management style. Being a good leader isn’t necessarily about being an alpha-type über-boss, the mag says. The most effective leaders are often servant-CEOs: managers who work as much for their people as profit for themselves.

Mathew Hayward, a professor at the University of Colorado’s Leeds School of Business, argues the servant-CEO model makes perfect sense in a world where competition for good staff is at the heart of business success.

A humble management style comes more easily to some than others – Hayward says business founders in their early days in particular tend to adopt an over assertive style in order to establish their credentials.

Want to be a servant-CEO? Work on managing according to these principles:

  • The higher you rise, the harder you must work for others.
  • Although you hold formal authority over employees, you must treat them like customers and, when reasonable, do their bidding.
  • When your desires and the needs of your organisation conflict, your desires draw the low card.
  • When meeting with staff, start by asking – ‘what can I do to help you do your job?’

 

Perth home prices up, Sydney down

Perth house prices increased by a massive 32.1% in the year to March 2007, more than triple the national average increase of 8.6%, according to Australian Bureau of Statistics figures released today.

But the golden days of growth for Perth home owners appear to have come to an end, with Hobart’s 3.8%, Brisbane’s 2.9% and Darwin’s 2.8% increase in house prices all exceeding Perth’s 2.1% rate for the March 2007quarter.

Sydney was the only city where prices went backwards in March 2007 quarter, houses in the harbour city selling for an average 0.4% less than the previous month.

ANZ economist Amber Rabinov says the generally strong figures are yet another sign that the Australian economy remains buoyant. Tightening housing market fundaments, low rental vacancy rates and strong household incomes should continue to support house pries into the future, Rabinov says.

Capital city house price averages

 

Dec 06
to Mar 07

    Mar 06 
to Mar 07

 

 

 

National

1.1

8.6

Sydney

-0.4

1.5

Melbourne

1.5

7.4

Brisbane

2.9

10.2

Adelaide

1.7

6.1

Perth

2.1

32.1

Hobart

3.8

10.5

Darwin

2.8

15.0

Canberra

1.2

9.0

 

New franchise opportunity

What makes a good franchise idea? One for a fragmented industry crying out for a national brand and consistent quality.

In the United States there are about 58,000 nail salons, most of which are “mom and pop” stores owned by Vietnamese and Korean immigrants. Springwise reports that a new business is claiming to be the first branded nail chain in the United States.

Dashing Diva hopes to become the Starbucks of nail salons, creating a strong brand and offering customers an experience that’s different from other nail salons.

While most nail places sport a hygienic but basic look, Dashing Diva has invested heavily in design, making it a marketable venue for bridal showers and Sweet Sixteen and birthday parties.

Customers are treated to girls’ night every Thursday and Friday evening, sipping free cocktails in the “Pink Pedicure Lounge” while having their toes done, and weekend morning treatments come with complimentary bagels and coffee.

Men and young girls are catered to with Racer and Little Diva manicures. The chain also has an advantage on the supply-side: Dashing Diva is an affiliate company of KMC-Exim, the world’s largest manufacturer of artificial nails.

The company has aggressive expansion goals: in the US, Dashing Diva plans to open 15 to 20 more stores over the next 18 months, both through conversions and new store openings.

Want to do it here? It’s too late to be the master franchisee. A Dashing Diva was opened in Melbourne in January 2007 and there are plans to open 30 more locations in Australia over the next three years.

There is a master franchise in Japan, the Middle East, Singapore and the Philippines. Stores in China and Britain are planned for this year. Franchise fee is $US25,000, good for five years, plus 4% royalty on gross sales.

Advertisement
SmartCompany

SmartCompany is the leading online publication in Australia for free news, information and resources catering to Australia’s entrepreneurs, small and medium business owners and business managers.

We Recommend

FROM AROUND THE WEB