Getting The Most Business Value out of your Employees

By Scott Juetten

Every business owner should be concerned with achieving the highest value possible for their business. After all, as a business owner the plan is at some point in the future to sell the business. Whether that happens 2 years from now or 40 years from now, it always pays to spend some time working on increasing the end value of the business before the time to sell arrives.

A big portion of maintaining and increasing the value of any business is getting maximum value out of the company’s most important resource… its employees.

Five Ways to Get the Most Business Value out of your Employees

1. Make your firm an attractive place to work.

  • Provide quality working conditions.
  • Offer competitive wages.

2. Strengthen your staff through recruitment and training.

  • Recruit experienced directors who make creating value a priority.
  • Recruit managers with transferable skills to manage growth.
  • Recruit and build employees who help you achieve your goals.

3. Make sure employees want to increase the value of the business.

  • Communicate your strategy and get employees to buy in to it.
  • Provide incentive pay to align remuneration with creating value

4. Set up systems to minimize the risk of employees 'owning' value.

  • For example, sales people may own customer relationships, expert employees may own important company skills or knowledge and managers may own their entire team.
  • They could use this ownership to negotiate an increased share of the value of the business. Or you could lose it altogether if they leave.
  • You may want to include clauses in your employment contracts to prevent former staff from competing with you. See Employment contracts.
  • Systems that make sure knowledge is shared, encourage teamwork and make employees easy to replace are vital.

5. Retain key employees.

  • The individuals who have created a valuable business will themselves be an important part of that value.
  • A key employee's value is sometimes explicitly recognized by buying 'key man' insurance.
  • Provide opportunities for career progression within the company.
  • Allow them an appropriate share of the value they create.