Planning for staff turnover is critical to success for business owners

I was talking to an entrepreneur who was concerned about losing a skilled programmer. In this discussion, she was talking about all the things being done – flexible work schedule, time off – to make sure this employee stayed.

As part of the rationale for giving these perks, she noted several times about how much money this employee had helped bring to this business. This entrepreneur’s question to me: “This employee wants a large percentage of company stock. What amount should I give to keep him?”

This is a common occurrence, an entrepreneur being “held hostage” by an employee. All employees are valuable, but you never want an employee to become invaluable.

The minute an employee becomes indispensable, business owners and entrepreneurs often feel they’ve become a “victim.” All companies want to keep great employees, but that is different from an employee becoming indispensable.

Simply put, it is not good business to become too reliant on one employee.

Two things entrepreneurs can do to avoid this from happening:

First, cross-train others to do this critical employee’s job.

Second, make it this employee’s job to train a subordinate to be their replacement.

Succession planning – also known as replacement planning – not only for the entrepreneur but also for every critical employee should be mandatory for every organization.

Sometimes things don’t work out and the employee will leave if his or her demands are not met. While this might appear scary or overwhelming at times, all entrepreneurs have survived staff departures and will need to do so again moving forward. Additionally, the fear of the employee leaving is usually much worse than the effort it takes to replace him or her.

In this case, the entrepreneur would not agree to the terms sought by an office manager who had been on board since the inception of the business more than three years ago. When she left, the owner was surprised at how quickly he was able to find a replacement and how much better the organization soon was running.

No employee should ever become invaluable to a business. Remember, entrepreneurs can avoid being “held hostage” by cross training and succession planning.

This story was originally published June 8, 2017 at 11:04 AM with the headline "Planning for staff turnover is critical to success for business owners."