Employment retention strategies for small businesses

2010-07-15
THE PUNCH Newspaper- Chinyere Fred-Adegbulugbe

Being an entrepreneur in Nigeria isn‘t particularly easy. The infrastructural deficiencies ensure that you are always on your toes just to get things working.



According to the President, Nigerian Small and Medium Enterprises, Dr. Ike Abugu, many small businesses in the country are gasping and barely afloat due to the hostile business environment.



What an entrepreneur certainly do not need is having to deal with issues arising from high employee turnover. Not only will that be distracting, it can also set the business back financially, especially considering that employee recruitment, even for a small business, does not come cheap.



What is more? Everyone agrees that employees are the line of any business. Therefore in order to grow your business venture, it is important that you get acquainted with practicable strategies you can deploy to retain your skilled hands.



According to the Chief Executive Officer of Neimeth Pharmaceuticals, Mazi Sam Ohuabunwa, who says he is speaking from his experience of running small businesses, SME owners can still retain their good hands even when they do not pay big salaries.



He says it will be better for them to adopt the profit sharing formula.



”You cannot compete with big companies in terms of remuneration and welfare so what I have adopted is to work out the possibility of sharing profit,” he states.



Ohuabunwa continues, ”I tell them, yes, the pay may be small because that is all I can guarantee but if we make money, you can get an additional percentage of the money or if we get a certain level of performance, you get something in addition. That way, people‘s salaries are not determined by what they are given. They are determined to work harder and can take some of the hardships because they know they would earn more that way.



Abugu, who also runs an SME describes employee retention as a big issue and ”it is a challenge most SMEs have not found answers to.”



Like Ohuabunwa, he believes that it will be important to deemphasise money because most employees move in search of higher remuneration.



He says, ”If you deemphasise money and emphasis co-ownership of the enterprises it will be better. And for someone who wants to set up his own business eventually, it is better to work in small enterprise because that way you have a panoramic view of how a business run.



”It is different for those who work in the big companies because they are usually restricted to their small units. I do not know whether it is a matter of policy but their employees tend not know what is going on in other departments.



Ohuabunwa also advises that an entrepreneur who wants to retain his employees should always try to be transparent. This way, the employees will always be carried along, he submits.



”There is always this thought that ‘monkey dey work, baboon dey chop.‘ So, the smaller the organisation, the more people think that way. If Oga buys a new car or his children attend expensive schools, the workers would assume that he used the company‘s money even when it is not so. It is always better to let everyone to know how the business is doing and what it is generating in profit,” he states.



This strategy, he explains, tempers expectations. ”Tell your people that every coca-cola we see today started as a small company. Pfizer started with two German-American brothers, who began by mixing things together. That company today is the number one pharmaceutical company in the world,” he adds



Finally, he says that a small business owner must also treat people as human beings and let them know that they add value to the business and that it depends upon them to survive and grow and they will like to stay.



According to him, ”People like to be valued. They like where their contributions are valued. So, even if they do not want financial comfort, let them have psychological comfort and this comes by appreciating their contributions.”



He adds, ”When the business is doing well, let the workers know and also feel it. This means that at such times when the company is experiencing prosperity, the workers should be paid better salaries.



When the business is going through bad times you call the workers and tell them ‘guys, we are paying ourselves so much and now the business is in trouble so we have to cut our salaries or do certain things for a short while to be able to recover.



However, if it is a case of repeating the same tale every time that the business is not doing well even when they can see that they are not so difficult with you, the trust will be lost.”

 

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