What Makes a Great Employer?

I ask myself this question all the time, for a number of reasons. What makes a great employer?

Is it how well they pay? Vacation time? Benefits? Culture? Is there a magic answer to this question?

I’ve thought about it quite a bit, and I think the answer is…yes. There IS a magic answer, or at least a simple one.

At the end of the day, what makes an employer truly great is defined by how they see their employees, and consequently how they treat them.

But what exactly do I mean by “see” and “treat”? Let’s take a look at Zappos.

I’ve used them as an example many times, but I just can’t say enough good things about that company! You see, what Zappos understands, better than any other company I’ve ever studied, is that the employees are the heart and soul of a business. They know that if you treat employees like family, provide for their needs (and many of their wants), and more or less give them a home away from home, they will reward you with an incredibly zealous loyalty.

Happy employees lead to happy customers, which leads to happy business owners, investors, and share holders 🙂

That’s it, the great secret to being a great employer.

Toss the traditional corporate HR crap basket out the window! Enough of the lame, uptight corporate handbooks that few people read and even fewer follow. Try thinking outside the box, throwing stuffy tradition to the wind. Be different, be fun, and don’t create and run a company that feels like a prison (or even worse, a High School 🙁 .)

It really is that simple.

So, what are some things you can do to show your employees just how much you value them, and that you don’t see them as mindless cogs in a machine? Here’s a few examples:

1. Pay them well. If you want to attract and retain the best people, don’t just pay them “fairly”. Pay them as much as you can afford to pay them. If you’re looking for better profit margins, you should never look at reducing compensation as a means for improving those margins. Money matters, and if what an employee is being paid isn’t enough to provide for all of their needs and some of their wants, there will be discontent.
2. Understand that the traditional 9-to-5 is dead, and that where an employee does their work is less important than how well it is done. Offer remote working arrangements, or a results only work experience (ROWE.) Studies have shown that this increases productivity and morale immensely, and it saves you a ton of money on office space and supplies.
3. Don’t limit sick hours. If an employee is sick, pay them to stay home so they don’t spread it…period. Some employees may take advantage of this, but most will love you for it and respect it for the gift it is. You can always offer to let them work at home that day, so they get some rest and avoid spreading the illness, and you still get some work from them. Don’t EVER make an employee feel guilty for taking sick time.
4. Employees aren’t mindless machines. They work best with a bit of fun and entertainment sprinkled in throughout the day. Consider having ping pong tables, pool tables, a Nintendo Wii or an XBox, and let them take time throughout the day to de-stress, have fun, and grow closer to their co-workers.
5. Don’t make rules and regulations from the top down. Talk to your employees and make those decisions from the bottom up. HR is, unfortunately, an antiquated department, and should probably stick to managing paychecks and benefits.
6. Reward results over experience or education. Just because someone doesn’t have 10 years in a given field or doesn’t have a college degree doesn’t mean they wouldn’t be the most amazing VP of whatever, ever.
7. Hire slowly and fire quickly (but rarely). Avoid layoffs at all costs, since few things are worse for morale. If you absolute have to do layoffs, do it deep so it never has to happen again, and make that clear to your employees.
8. Provide benefits that are best for the employee, not your bottom line. Sick, miserable and stressed employees are not good employees, and great benefits go a LONG way towards avoiding that.
9. Don’t hire Type A people, especially not for management roles. Control freaks do not have a place in the workplace, and will usually make the lives of anyone they manage utterly miserable. Creative geniuses make much better managers 🙂
10. Don’t try to force a “company culture” on your employees. Culture develops naturally, and fake/forced always comes across as fake/forced.
11. Don’t spy on your employees. Studies have shown that most workers only work 3-5 hours of an 8 hour shift. Unfortunately, that’s life. The human brain needs breaks, especially from tedious tasks. It is important to understand that you aren’t hiring an employee for their time, but for the results they can produce in that time. If an employee can produce great results in 3 hours per day, trying to squeeze 2.66 times what you need out of them in a day isn’t going to produce good results. Speedy, quality results tend to follow a power law curve.
12. Let your employees use social media on company time. If you are an awesome employer, it could actually be to your benefit. Remember, results are more important than time spent getting those results.
13. Enough with the non-competes already. They are rarely enforceable anyways, and do nothing but contribute to unemployment later on. If what your company does is so unique and special, try protecting it with IP laws. Get a patent, copyright, trademark, etc. In almost every instance I can think of a good confidentiality agreement is more than sufficient for an employee. A non-compete is nothing but a slap in the face to an employee, a clear declaration that you don’t trust them at all, now or in the future.
14. Dress codes = super lame. What you wear REALLY doesn’t matter, unless you will be meeting with a client. Requiring a suit and tie, or even business casual, of everyone in the company is almost pointless at this point. Let your employees be comfortable, wear what they want to wear, and be themselves.

I’m sure there are many more points to address, but those are a few of the biggies. Old school business practices are dying at an astonishing rate, primarily because the barrier to entry in most fields is vanishing, and more and more people are deciding to work for themselves. Fewer employees = more contractors, and most contractors will cost you a hell of a lot more than a good employee.

So seriously, treat your employees like you would your best customers, because in a sense they are. You’ll never regret treating employees well, but you will almost always come to regret treating them poorly.