“But we pay well, have free food, and a company arcade. This is a great job” Those were the words of the leader of a fast-growing startup (we’ll call him Simon) who was hemorrhaging team members. As fast as he could hire one person, it seemed like two were out the door.
OK, it wasn’t that bad. He has more than one hundred team members and is forecasted for nearly $200 Million in revenue this year. The seven-member executive team seems happy and all but one of them have been in place for the past three years. Sales are up, costs are down, and yet…he can’t seem to keep any mid-level talent.
The average tenure of his managers and VPs is less than eighteen months. Three positions are currently unfilled. His past two hires quit before they reached six months. Simon was at his wit’s end. The good news is that he recognized that if he didn’t address the problems, they would be his downfall. He had a strong desire to fix them.
What he didn’t know are the eight things his team really wants. They are the same eight things most professionals want. So whether you are leading a company, growing a non-profit, or leading a team of salespeople, keep these things in mind.
The eight things your team really wants – numbers one and two
1. Fair pay.
Surprise, money is important. Simon’s company really does pay well…often too well. Underpaying team members is a surefire way to build resentment. For some people, it causes problems at home, which leads to poor performance at work.
One of the reasons Simon’s warehouse team is so loyal and productive is because he pays them well. He takes care of his people. In turn, many of them are making in excess of $60,000 in exchange for their incredibly hard work. His turnover rate in an area that typically experiences 30%+ annual turnover is less than 8%. Not one of his first ten warehouse team members has left the company. Four of them are managers now.
As he gets into upper management and the executive team, the same is true. They are paid a fair amount and thus, are happy. But his VPs…they are a different beast. Simply put, he was overpaying them.
How, exactly, did this cause problems?
Overpaying leads to three problems that tend to happen in this order:
- Ego (looking down on lower-waged team members)
- Resentment from below
The VPs were developing serious ego problems. Most of them were making rash decisions, buying fancy cars, and living a lifestyle that was causing big problems with their direct reports. Resentment built, respect was lost, and performance declined. Ironically, Simon’s biggest problem (lack of leadership for some teams) was helping the company. Without the egotistical leaders in place, the teams performed very well.
There is a delicate balance in determining pay rates. You want to pay well enough to help team members avoid financial problems and be better focused at work. But overpaying can be just as bad.
2. The right resources
This is another money-related one, so I wanted to get it out of the way.
Does your team have the right:
Again, in this arena, Simon’s company seemed to have a three-tiered system.
Frontline workers (warehouse, customer service, and sales) had the tools they needed. They received frequent training, received consistent upgrades to equipment, and were adequately staffed. Each team member knew his or her role.
The executives also had the right tools. They participated in quarterly leadership training and read books together. They controlled their budgets so that was never a problem. And each of them had an assistant to help them.
But the VPs…they seemed to be constantly short of resources. They received little or no training on how to lead. They had almost no discretionary budget and no assistants.
It never ceases to amaze me how something small (in the scheme of a $200 Million company) like a new chair, an updated computer, or a shared assistant can change an entire culture.
In order to be happy, your team needs the right resources. No amount of pay or power will replace the need for them.
The rest of the story
So, we’ve covered two things that your team really wants. Six more to go. And we’ll cover those in the next three days. If you haven’t already, make sure to subscribe to my RSS feed or get posts via email (and get my free book as a bonus) so you don’t miss any installments in this series.
I told Simon two things to start with. First, he needed a new compensation plan for his VPs. He developed a much lower starting salary with better bonuses. His fear of being unable to attract top talent was quickly alleviated when I reminded him that he was investing a lot more in bringing them on and then losing them quickly. Plus, he’d find driven, loyal prospects, not just those in it for the money.
The second thing was that they mirrored the executive training plan for the VPs. And they started right away with the current team. As more came on board, they were instantly made a part of this new culture.
But Simon struggled in six more areas, so stay tuned for more and learn from his mistakes.
In tomorrow’s installment, we’ll discuss the next two things your team really wants: A clear vision and realistic expectations.
What would you tell Simon about providing fair pay and the right resources?