How to attract and retain good staff for small business

Thank you for taking time out of your day to come to this session today. I’m really pleased to be here today, to discuss a topic that has been a passion of mine for sometime. I’m also keen to hear about your stories. Just so I understand who is here today. Who here is a small business owner? Who works for a small business? Who works for a medium business? Anyone work for a corporate? Thanks.

First up I want to say, that I really admire people who have started their own business. You have started something. You are initiators.

I hope from this session today, you take a few things away with you:

  1. You think about what got you started in small business and use that motivation to help attract others, and
  2. That you think about how you lead your business and the people you are trying to retain in your business.

I’m not here today to tell you how to try and run your business, or reveal any ‘sure fire ways’ to attract and retain people to your business. I’m merely someone that hopes to challenge your mindset and inspire you to think about things in a different way. I want you to think about what your unique employee value proposition is for attracting and retaining staff in your business. An employee value proposition simply describes the different discrete elements that make your business attractive for others to come and work with your business.

Why are you in small business?

So, for those in the audience that are owners of a small business, I want you to discuss with someone near to you, your story. I want you to try and remember, if it was a long time ago, what made you decide it was a good idea to mortgage your house, or invest some money you had worked hard to save, in order to pursue your dream.

What was that dream? What is it today? Is it still the same?

If you are working in small business, share what get’s you out of bed in the morning. Why do you turn up to work? Obviously we need money to live, so talk about what other than ‘making a living’ gets you motivated to get up in the morning. Spend 2 minutes then sharing with someone near to you your story

Poke the Box

Chances are, given many of you work in small business today, that you are initiators . You are tinkerers. You like to try new things and see how they work. So how do we become good at the things we do?

In Seth Godin’s recent book, ‘Poke the Box’, Seth talks about the value of initiators and the ownership they can gain by ‘poking’ and initiating.

“How do Computer Programmers learn their art? Is there a step by step process that guarentees you’ll get good?

All great programmers learn the same way. They poke the box. They code something and see what the computer does. They repeat the process again and again until they figure out how the box works.

The box might be a computer or it might be a market or it might be a customer or it might be your boss. It’s a puzzle, one that can be solved in only one way – by poking.

When you do this, what happens? When you do that, happens? The box reveals itself through your poking, and as you get better at it, you not only get smarter but also gain ownership. Ownership doesn’t have to be equity or even control. Ownership comes from understanding and from having the power to make things happen…

It has been observed how willing we are to surrender control to the objects and organizations in our life….

As soon as we willingly ad blindly accept what’s given, we lose all power. Only by poking, testing, modifying and understanding can we truly own anything, truly exert our influence.

No one has influence, control, or confidence in his work until he understands how to initiate change and predict how the box will respond.”

Like you have experimented with your businesses to get where you have got to today, I encourage you to think about how you will be able to experiment with some of the key insights from today, in order to be more effective in attracting and retaining talented individuals to work with your business.

The search for help today

Who here would like to tell me a story about their struggle to find help today? What are your struggles? Finding good people? Keeping good people or both? What age group are you targeting? Where do they leave to go to?

Who struggles with just the thought of finding someone new? Not just finding someone, but finding someone that fits into your business well. Connects with the people they need to work with, including ourselves and our customers?

In many ways, we subconsciously look for reflections of ourselves. Someone with similar values and similar work ethic. If we are know our personal flaws well, sometimes we will also look for people that have strengths to cover our weaknesses.

Knowing who you are, your own strengths and weaknesses and what sort of attributes you need of a person, in order to achieve what you want to achieve with your business is a great starting point for attracting the right sort of people to your business. It is fundamental stuff, but important never the less.

Good people are great for business.

You have probably heard about the ‘war on terror’, but have you ever heard about the “War for Talent”?

Back in 1997 McKinsey & Co, a top tier consulting firm did a study that determined how hard it was to attract and retain talented people in organizations. In 2001 they updated the study and found some interesting facts about the difference between high performers, than average performers.

This data tells us that high performers can achieve significantly better results than average performers. For sales roles this was 67%. The potential for small business to get the equivalent of up to an extra 67% of productivity from one person is immense.

Good People are Great for Business

Now this report was developed for corporate America, but if you think about the implications, for small business they are quite interesting. In the report it states:

“Demographic and social changes have played a growing role in this trend. In the United States and most other developed nations, the supply of 35-to 44-year-olds is shrinking. And many of the best-trained people entering the workforce are not bound for large traditional companies: last year, a full 30 percent of MBAs in the United States preferred to work for a start-up or a small business.” (The War for Talent – Part 2, McKinsey 2001)

These statistics are also a telling trend about where our talented people are going. Whilst you may be losing your people to large organisations, large organizations are losing their people to go and start small businesses. Sort of ironic I think. Don’t you?

But not surprising really. Think about it. In the last 10 years, companies have been born, offering new products that previously didn’t exist. People are ‘poking the box’. Starting something new. Some good examples are obviously in the technology sector, like LinkedIn, Facebook or Twitter. You may not have heard about a site called started out as an online shoe retailer in the US and now sells a bunch of different shoe and clothing related items. is unique for its’ offering to consumers, but because of what they offer their employee’s.

How much is a good employee worth?

Call centre’s are notoriously tough places to try and attract and retain good people to. Quite often there is a survival of the fittest type of approach going on in a call centre, resulting in turnover rates that I have seen, anywhere from 25-48%! With around 35% being the average. The figures I quote you here are Australian companies, not call centre’s based overseas.

In the US, they also have a high turnover rate for call centre’s., decided to do something about the turnover in the company. Zappos core values is a key part of how they differentiate themselves and try to compete with attracting people to their organization. Their values are:

“1. Deliver Wow Through Service
2. Embrace and Drive Change
3. Create Fun and a Little Weirdness
4. Be Adventurous, Creative and Open-Minded
5. Pursue Growth and Learning
6. Build Open and Honest Relationships with Communication
7. Build a Positive Team and Family Spirit
8. Do More with Less
9. Be Passionate and Determined
10. Be Humble”

Daniel Pink, in his 2010 best seller, Drive, tells the story of Zappos and what they did to concentrate on getting the right sort of people.

“Tony Hsieh, founder of (which is now part of, thought there was a better way to recruit., prepare and challenge such employees. So new hires at Zappos, go through a week of training. Then, at the end of those seven days, Hsieh makes them an offer. If they feel Zappos isn’t for them and want to leave, he’ll pay them $2000 – no hard feelings. He’s using an “if-then” reward not to motivate people to perform better, but to weed out those who aren’t fit for the sort of workplace he is creating.”

Think about it…

Would you pay for someone to leave your business if you thought they were not giving your customers the sort of experience that fit your dream you outlined in the first activity we did today? Is your dream that important to you?

Zappo’s embraces their purpose and what they are about to really connect to the sort of people that are going to make their business successful. On their website, they even target the sort of people you may be losing to big business today. They say:

“I’m free from boring work environments, go-nowhere jobs, and typical corporate America!

Why join men? A fun, collaborative environment that’s all about innovation. An extensive benefits package including free lunch, 40% employee discount and no dress code!

A work-hard play-hard start-up with solid management and resources; what more could I ask for?…”

The key take away for me from this case study is that if you are really deliberate about the sort of culture and company you want to build, you will be rewarded in return by very loyal, hard working, bright and dedicated employee’s. knows what it takes to be a valued member of their team and would prefer to pay you to leave rather than have you as a destabilizing force in their business.

So why is your small business dream important?

I mentioned Daniel Pink’s book Drive before and I am going to use the framework within his book, to think about some of the fundamental things we need to consider in order to better hire and retain the sort of people that are going to not only work for us, but lift the bar and challenge us to take our businesses to the next level.

Pink explores a new concept for how we motivate people. Pink contends, through a number of proven scientific experiments, that the current way we operate our businesses today, relying on external carrot and stick motivators, doesn’t actually work for most people and is likely to do more harm than good. Pink outlines a new way to think about motivation, which he refers to as Motivation 3.0. (In case you’re wondering, Motivation 1.0 refers to cave man times when we were driven by our physical needs, thirst, hunger, temperature etc, Motivation 2.0 is about rewarding or punishing people for what they do and don’t do, which has been a function of how we have tried to motivate people since the the industrial era.)

Pink’s view on how we motivate people has three essential elements:

  • “Purpose – the yearning to do what we do in the service of something larger than ourselves.
  • Autonomy – the desire to direct our own lives
  • Mastery – the urge to get better and better at something that matters”

I will now go through each of these in a more detail and ask you to relate these concepts back to your own situation to start thinking about what your unique value proposition is to attracting and retaining your employee’s.


Pink defines purpose as the yearning to do what we do in the service of something larger than ourselves.

Chances are your small business dream had a goal that was greater than just making a living. It doesn’t have to be saving the planet or making world peace. It might be as simple as putting a smile on all of my customers face because I serve them coffee and show them I care, but ensuring they get to enjoy something they really look forward to having every day.

Bendigo and Adelaide Bank

At Bendigo and Adelaide Bank, we “aim to be Australia’s leading customer connected bank.” Part of the origins of the Bendigo and Adelaide bank, included the establishment of the Community Banking model.

A Community Bank® branch is a locally owned and operated company, which functions as a franchise of Bendigo and Adelaide Bank. Bendigo and Adelaide Bank provides the coverage of its banking licence, a full range of banking products, training of staff and ongoing support.

Depositors are protected by Bendigo and Adelaide Bank’s track record when it comes to the security of depositors’ funds. We are one of Australia’s oldest financial institutions, we have operated since 1858 and have declared a profit in every year and we have without fail honoured our depositors. Deposits are also currently protected by the government guarantee.

The Community Bank® model is based on the sharing of effort, risk and reward. Bendigo and Adelaide Bank and the community company share the revenue on core banking products 50/50. The local company is responsible for paying branch running costs such as staff wages, property rental and equipment leasing. Bendigo is responsible for the supply of all banking products and services, all computer systems and provides guidance and advice on matters of compliance and legislation.

When the local company begins to make a regular operating surplus, after the payment of branch running costs, the remaining funds are available to be reinvested back into the community through dividends to shareholders and grants to community groups and projects. To date, in excess of $50 million in Community Bank® branch profits has been returned to community projects and more than $15 million has been paid in dividends to more than 63,000 local shareholders.

The Community Bank model was originally developed to return banking services to communities who had lost them and has now spread to more than 270 communities across rural, regional and suburban Australia.. The model is unique in Australia (and internationally). Community banking is about building a win / win relationship with your customers. Investing in what is important to them, in return for their business with their community bank.

Why is purpose important?

Community banking, not only provides a unique sales proposition for our customers, it also provides a unique opportunity for attracting our staff. To be a part of an organisation that is working at the grass roots level with other community focussed organisations, which gives back something to our communities in a very connected way, is an attractive proposition to potential staff. It is one of the reasons I was excited about joining the Bendigo and Adelaide Bank.

If your business doesn’t have a purpose you strongly believe in:

  • What are you selling your customers that makes you any different from your competitors?
  • How are you planning to attract people that are going to work with you to add value to your business, because they believe in your purpose?

Purpose is about know what you want and then understanding what others want. Then looking for people who also believe in your purpose and at the same time helping them to achieve what they want to achieve.

Activity – confirm your puropse

Take 30 seconds now and write 5 things down that are either were key drivers to choose why you did what you did in business, or things that you now think differentiate you from other businesses. These things will be likely be a part of your unique purpose.


Autonomy is about the desire to direct our own lives. There are many upsides to offering your employee’s autonomy, in that they are making decisions every day that affect the way your business is perceived by your customers. You can’t direct their every interaction, so they need to feel empowered enough to be able to take their own actions in a way that will provide a positive outcome for your business.

Are you currently offering people in your business the opportunity to work autonomously? Or is your business is it about taking orders?

Think about why you started a small business. Chances are you didn’t want to be taking orders from others. So how can we still employee people and not be seen to be telling them what to do?

Autonomy – it even happens in the military.

In 1997 I consulted to the US Air Force to help them implement a new aircraft maintenance system for their equipment. A few things struck me about working for their Air Force. They had their purpose really clear and people knew it. ‘To Fly, Fight and Win”. If you weren’t helping them somehow get their aircraft in the air and being successful in battle, you had no purpose and hence no job in the Air Force. The US Airforce really gets purpose.

But how about autonomy? Isn’t the military all about command and control? Isn’t the military the reason we have hierarchy in organizations today?
Well it is, but I think there are always exceptions.

Orders in the military and people following those orders can save lives in a number of ways. For example, aircraft maintenance is a pretty finicky business. There are lots of parts on a plane that have a used by date, which means they have to be serviced or replaced at certain intervals. The only way to keep a track of this with any degree of precision, is to ensure every part and every change on a plane is entered into a computer system. There is a policy or ‘order’ that this data is to be entered and for a good reason.

Jet planes work are basically controlled around a series of controlled explosions. Whilst I was consulting to the Air Force, there was an incident where an F-15 like the one in this picture caught fire on the runway. The pilot escaped unharmed, but there was some sort of mechanical fault or human error that caused this issue. Knowing what parts were on the plane and in what working order they were before this happened is pretty important, as if you don’t know, you may end up with lots of aircraft falling out of the sky and not knowing the cause.

But even the military, bastions of the command and control mentality, can see why autonomy rocks. A good recent example was the mission to capture or kill Bin Laden. One of the helicopters used on the mission went down with a mechanical fault, yet again proving the importance of the people following the orders around maintaining the aircraft. Although, noted in this case the helicopter was most likely from the US Marines and not the airforce.

But how about the Seal team that went in? They had orders and a plan, but that plan just went into a tailspin when that aircraft went down. Navy seals include decisiveness as one of their top five characteristics. They ‘must have the ability to take quick decisions’. Through the Navy Seals own autonomy, they made a number of key decisions on the spot, including as to whether to abort the mission or find a new entry point into the compound, as the planned full roof based entry had just been ruled out. They were well trained and well drilled, they knew the layout with their eyes closed, but they had to make a decision then and there as to how to finish that mission.

So even if the organizations that are built around the concept of command and control can learn the value and power of autonomy, I think everyone can.

Why is autonomy important?

Spend a minute trying the following exercise. Write on a piece of paper the following table. Now do a quick comparison. Think of all the pros and cons for each sort of leadership style and make notes. Or simply put a tick or a cross for the winner or loser of each of the considerations.

Don’t be afraid to change or add your own criteria.

This exercise is about you and your leadership style. Seeing the benefits of different approaches to leadership in your own business, will help you to think about how your style is going to ultimately enhance or potentially detract, from your overall employee value proposition.


“Mastery is the urge to get better and better at something that matters.”

In ‘Drive’ Pink talks about Mastery as one of the key factors for internal motivation. He talks in depth about the concept of ‘flow’, which we sometimes call ‘being in the zone’. Being a Geelong supporter in the AFL, over the last few years, I’ve seen the team have periods of flow in a game where things just link together and the team seems to perfor

m at the most unbelievable level. But working at that level is not easily repeatable and requires many hours of hard work, dedication and practice in order to be anywhere near that level.

If you think of flow as being the state when you are achieving your best, then how can we help our people to reach that flow state, when they may be completing the most routine tasks, that have to be done on a regular basis? One way is by turning work into play.

Pink gives a good example in drive, where two business school professors studying the phenomenon of turning work into play among hospital cleaners, nurses and hairdressers.

“They found, for instance, that some members of the cleaning staff at hospitals, instead of doing the minimum the job required, took on new tasks – from chatting with patients to helping make nurses’ jobs go more smoothly. Adding these more absorbing challenges increased these cleaners’ satisfaction and boosted their own views of their skills. By reframing aspects of their duties, they helped make work more playful and more fully their own. Even in low-autonomy jobs… employees can create new domains for mastery.”

Another way to help contribute to employee’s mastery is to employee some Kaizen principles. Kaizen, very briefly, is the Japanese word that describes the methodology behind continuous improvement, made famous by Toyota. One Kaizen concept that is popular in large organizations, is the idea of thoughts into actions. Thoughts into action, empowers the workers with some tools and templates for employee’s to think about how they do their work and provide suggestions on way’s to improve it. Then the leaders work with the employee’s to make those changes a reality. Having the employee’s fully engaged in the continuous improvement process, not only helps build their own mastery, it helps build your business and encourages incremental innovation that may help even further differentiate your business from your competition.

So why is mastery important in context of a small business, attracting and retaining the right people? Mastery is important for a number of key reasons I think. For one, it is a key part of intrinsic motivation and will be crucial for retaining your best and brightest employee’s. If people don’t have the ability to continue to learn and innovate, they will become stale and less engaged. Mastery is also important for keeping your business innovative. As a small business, you know you only have limited resources, so getting the most out of your resources, including the people you employee is essential.

Ensuring you provide an ongoing challenge will be beneficial to both your business and your people.

Your Employee Value Proposition

Hopefully today has given you some things to think about in relation to your business.

I want to leave you with the following exercise to think about, and complete after this session today. Write up the following matrix and think about the different questions I have posed to you today and the information. Determine some key actions you can take to improve how you help demonstrate to your people or potential people your purpose, autonomy and mastery. Also document what you think the benefit is for your employee’s or any potential employee’s. Turn these points into a short story about your business and a greeting pitch you can use to sell the benefit of working with you to any potential employee prospect you meet in the future. Or make your 140 character greeting pitch a job add to attract the people you want to make your business successful.

Remember, it is your dream you are asking people to work on with you. You need to help them understand what that dream is and also understand what their ambitions are and help them to reach their goals as well.

For more information and a full transcript of my session today, go to my blog, I will also have the books I mentioned listed today on the site and you will be able to print out the templates and slides.

I would be really interested in your feedback, so please write your comments about the session on my blog today.

Thanks again for your time today. I hope you have got something out of it and can work on attracting and retaining the best possible people for your business.