Over the next several years, small-business owners will have access to top talent -- and they won't have to pay exorbitant salaries to get them. Or so says Roger Herman, a certified management consultant based in Greensboro, N.C., and the publisher of the Herman Trend Alert, a weekly e-newsletter that identifies business trends.
Herman recently spoke with Smart Answers columnist Karen E. Klein about how entrepreneurs can best utilize the corporate refugees who may soon be joining their ranks. Edited excerpts of their conversation follow.
You're predicting that small-business owners will soon find it easier to attract seasoned employees. Why?
It's going to get easier because top talent is going to be seeking out the smaller firms. What's not going to be so easy is for small companies to manage these high-powered employees who may not be used to working in an entrepreneurial environment.
What's pushing corporate employees to seek out jobs at smaller companies?
Over the years, we have experienced substantial layoffs by large companies. When hundreds or thousands of people lose their jobs unexpectedly because of corporate restructuring, new technology, outsourcing, offshoring, or poor management, the ripple effect can be dramatic. These people know that smaller employers are also squeezed from time to time but that they tend to avoid laying off personnel. That's because each team member is more important to the smaller employer.
There's also turbulence in the employment market caused by burned-out people who decide they don't want to do whatever it is they're doing anymore. We're seeing this most strongly with the Boomers. They've gotten into positions on the corporate ladder where they can't go any further and they're looking for different opportunities.
What levels of employees are involved in this shift?
This goes all the way from lower-level employees up to the CEOs. An auto worker who has been laid off an assembly line, for instance, can bring a lot of value to a smaller company that's just setting up a manufacturing production line.
Also, we've got older workers who are approaching what used to be their retirement years who still want to make contributions in the work world. So people in their 50s through 80s are still working and active, and many of them have a lot to give a smaller company.
Small-business owners have always been hampered in recruiting because most can't afford the kinds of corporate benefits, bonuses, and salaries that larger companies can. Will this continue to hurt them?
A senior executive or even a middle-manager who takes a job working for a small company knows that his or her income will probably be dropping and that the benefit plan will be smaller or non-existent. But that downside is counterbalanced for many by the advancement opportunities of a smaller company.
What kinds of opportunities for advancement should small-business owners be touting?
An entrepreneurial environment typically offers broader and higher-level advancement and more meaningful, challenging work. In a really large business, most people are just a desk over in the corner. In a smaller firm, that same person's desk might be next to the CEO's.
This is the professional growth people are looking for: They want to give more input and have more jurisdiction over larger areas. Mix in today's emerging values centered on life-work balance, personal engagement with work, and being able to choose where you work, and smaller employers become very attractive
You mentioned that knowing how to handle high-caliber talent may prove to be a challenge. How so?
A corporate senior executive or a high middle-manager is a pretty strong collar for a small corporation. Selecting the right people to bring on board, at the right time and for the right reasons, may be beyond the capability of many smaller employers. And managing them will be almost overwhelming -- like having wild stallions pulling a wagon designed for farm-bred horses.
How can an entrepreneur drive that kind of talent?
They'll have to get off their pedestals and not be threatened, first of all. Many entrepreneurs need to recognize that there's a lot of truth to the old adage about how the smartest business move is to hire people that are brighter than you are. If they have the chance to do that, and they grasp it, they'll be in a better position in the long run.
If you're a small-business owner and you constantly hire people who are pretty much like yourself, you'll soon be running a closed operation. You need to recognize the value of building diversity in terms of age, background, expertise, and experience into your workforce.
What kinds of adjustments will the employees themselves have to make, perhaps working at a small company for the first time?
People working in large corporations are used to particular corporate cultures that may not be compatible with the atmosphere at a smaller firm. For instance, I hired a guy about eight years ago who had worked in a big room that was filled with cubicles. One day, I had to call him into my office and explain that we don't shoot rubber bands across the room. He had just become accustomed to doing that sort of stuff at work.