You’ve followed our steps on how to properly set up your new business. The next step is ensuring you have the manpower to take your business from an idea to a successful venture. And not just any type of manpower, but loyal, hard-working employees who ‘get’ your vision and work alongside you to bring it to execution.
For many start ups, attracting and retaining employees can be a challenge, regardless of your industry. Implementing strategies to help reduce turnover, protect intellectual property, and improve your company’s economic performance is critical. Consider these proactive measures to encourage loyalty and retention and to minimize the risks of unfair competition. As a bonus, these tips can also help minimize the potential need for litigation down the road over trade secret and other unfair competition claims.
1. Hire Effectively
Quite often, an applicant’s resume speaks louder than words. Has the prospective employee moved around a lot? Has he or she worked in similar capacities? Effective retention of employees begins with effective hiring.
2. Create a Culture of Engagement
Employees, especially high-level ones, are more likely to stay when the company they work for respects their contributions, pays them fairly, and creates an environment where growth and development is not only encouraged, but rewarded. If large salaries aren’t an option for you in the beginning, consider awards for good performance and bonuses for exceptional performance or results.
3. Adopt Economic Incentives for Retention
Tagging along onto #2, consider economic incentives. For example, consider awarding performance bonuses based on continued employment through a specified date. Therefore, if the employee leaves before that mutually agreed upon date, s/he would not be eligible for the bonus. Other options include deferred compensation arrangements and stock option plans which are structured so that employees contribute money to a plan over time or are awarded stock options, with amounts vesting over time. Learn more about what to be careful with when it comes to stock options here.
4. Put Things in Writing
California is notorious for its dislike of non-compete agreements. However, that does not mean an employer cannot protect its intellectual property. Confidentiality agreements are one option to help ensure that employees do not divulge trade secrets and other proprietary information. Discuss effective ways to protect your intellectual property with an experienced business lawyer.
5. Conduct Exit Interviews
These exit interviews serve two purposes: 1) they allow you, the employer, to learn about potential areas for change within the company culture and 2) they are an opportunity for you to enforce your company’s rights. Collect all documents containing potentially confidential information, including computers, zip files, cell phones, or other electronic devices belonging to the company.
While not exhaustive, this list is a great start to ensure that you are hiring the right employees for your new venture. To discuss these, or additional considerations, in further detail, contact business lawyer Drew E. Pomerance today.