Today's guest blogger is my partner, Susan Laine…
According to a recent Pricewaterhouse Cooper's Private Company survey, 57% of the CEO's interviewed plan to increase their total workforce expenses over the next 12 to 18 months. Only 5% expect a decrease.
This is great news for the economy. The future is looking brighter and owners are, once again, starting to think about expanding their businesses. To foster that growth, 39% of the same respondents indicated that they plan to invest in new talent, and also to invest in programs to develop existing talent. The CEO's goals are to better capitalize on their existing workforce and to attract high-quality talent to their firms. But how do you attract the right talent and spend your compensation dollars wisely?
In our consulting practice, we call this the 3 R's—Recruit Reward and Retain. Who do you hire? How do you imbue them with your corporate culture? How do you create a work force whose goals are aligned with both your short and long term goals? How do you compensate them?
These are hard questions to answer. You must sit down and think about these questions as part of your overall business strategy—what do I want to accomplish for myself, my business and my family? How does my staff and more importantly, my management team, help me to achieve my goals?
Only then can you design and implement a talent management program which moves you forward on the road to success.
This may sound out of place in an exit planning column, but as we learned from Stephen Covey, we must begin with the end in mind. Too often we have seen business owners give away stock to key employees in a haphazard manner, absent any strategic objective or planning only to face real difficulty later on. In one case, an employee left and both he and the owner both forget he owned shares. He later reappeared when he heard the company was being sold.
Before designing an incentive and compensation strategy, it is critical to know what the owner's exit goals are. When does he or she plan to leave? To whom does he imagine selling the company? Having a handle on these questions will help in the design of incentive strategies for key people.
The strength and depth of your management team will often be a key factor in the value of your business. Thinking of it as a strategic investment will pay dividends when you sell your company.
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