Key Non-Family Employees
How To Keep Them Happy
Every business is faced with challenges. However, family businesses deal with unique problems that are even more challenging. While family ownership may have its privileges it doesn’t’ guarantee success or survival. Retaining smart young executives to assume leadership roles in a family business is an ongoing dilemma.
The following steps can be taken to ensure successful employment of non -family employees.
Attitude & Acceptance — Do not set up or create a wall that will exclude key non family members from participating in the triumphs and set backs of the business. Based on their qualifications and experience, recruit key employees to the inner management circle, not on their relationship to the family.
Employees usually leave companies for one of three reasons:
1.Feeling insecure about their future with the company
2. Being excluded from management decisions and not having any influence
3. Not getting any feedback on job performance
It is especially important in a family business to provide these key elements.
Empowerment — Owners and management must empower key non-family employees by giving them authority and decision making responsibilities. The savvy family business owner will realize that this is the best course for the business and for the morale of the non-family member employees.
Pay Market Value — In order to attract and retain outstanding employees, the non-family employees must be compensated properly. Morale issues and business problems can be serious if family members are paid more than non-family members in similar jobs, especially if education and experience do not warrant a high salary.
Reward Equity — Consider giving key non-family members stock and make them shareholders. One way to keep them satisfied is to issue phantom stock or stock appreciation rights. This method allows employees to share in the company’s growth without investing and without permanent ownership. Another suggestion is the use of Employee Stock Ownership Plans (ESOP’s). ESOP’s are used to keep valued employees and save on taxes for the owner.
If you have specific questions on how to keep key non family employees happy or other family business issues feel free to contact us.
