Your Small Business Guide to Effective Team Management

Hiring and managing a quality team is a small business manager’s highest priority. In a uniquely people-driven environment, small organizations and startups rely on employees to impact everything from profits to company culture and morale. To grow a successful business, you must be thoughtful and deliberate about each hire and have a plan for effective team management in place.

Losing one team member because of a lack of a cultural fit or from being burned out creates a vacuum that is expensive to fill and can potentially grind business to a halt. Small business managers and owners are accountable for assembling teams and leading those teams to their best performances. Your decisions must foster a sense of commitment and loyalty in your team.

None of us is as smart as all of us.– Ken Blanchard

How to Manage a Team Efficiently

What is team management? Effective team management requires skilled workplace leaders who know their employees’ individual strengths and can help them work efficiently as part of a team. It takes patience and strong communication skills.

Before you can manage a team effectively, you need to find the right people. The wrong group of employees can make or break a business, even under strong management. It’s important to know the right way to go about the process.

High turnover rate can have negative effects on a business, like harming morale and decreasing workflow Hiring the wrong person is costly and can damage morale and the business’s reputation. These tips may help make the hiring process more effective:

Start with personal recommendations

It’s always good to have the opinion of someone you trust. Employees who are referrals are excellent contributors, stay with the company longer, and are four times more likely to be hired in the first place.

Sam Altman, CEO of OpenAI, said that “most great tech companies have been built by referrals, at least for the first 100 employees.” Describe the opening to employees and frequent business contacts and ask if they know of anyone suited to the position.

Connect with colleges, career centers, and trade school

Entry-level positions are fantastic opportunities for students and graduates to get started in the workforce. It can be a valuable opportunity for you too, because you’ll network with promising new talent.

The average turnover rate in the U.S. is about 3.4 percent annually.

Contact professors at local colleges and universities, and don’t forget about counselors at these institutions’ career centers. Build relationships with these professionals. Professors will have a good idea who their top students are and can pass along a recommendation on either side. Counselors can make recommendations and post open positions at the institution.

In addition to hiring students or recent graduates to open positions, consider an internship program. It can be paid or unpaid, and you can work with schools that offer internship credit so that it’s advantageous on both sides. Nearly 53 percent of interns go on to become full-time hires, according to the National Association of Colleges and Employers. Invest the time, trust and resources into the right intern, and that person could become a part of your team permanently.

One executive at a PR firm in Boston said that the agency has a rigorous paid internship that targets some of the most talented individuals in the area. It’s a great way for the firm to get a taste of a potential employee’s abilities.

Keep workplace culture in mind

Workplace culture is important to a business, and when hiring new employees, it’s smart to look for people who would fit in with the culture. By utilizing referrals from current employees, you’re more likely to find like-minded people who will enjoy working with those around them. Having passionate employees who share similar values will boost productivity and make everyone’s jobs easier.

Scan social media

Social media can be a window into a potential employee’s values and personality. You can tell a lot about candidates by how they live their online lives. For better or worse, their social media posts can help you make decisions about who to hire.

According to a survey by CareerBuilder, 70 percent of employers are using social media to this effect. Employers are searching for a few key items when researching candidates via social networking sites as good signs to hire:

• Information that supports their qualifications for the job (61 percent)
• If the candidate has a professional online persona at all (50 percent)
• What other people are posting about the candidates (37 percent)
• For any reason at all not to hire a candidate (24 percent)

More than half of the employers surveyed said they found information online that caused them not to hire a prospective employee. The reasons they cited for not making that hire included:

• Candidate posted provocative or inappropriate photographs, videos or information: 39 percent
• Candidates posted information about them drinking or using drugs: 38 percent
• Candidates had discriminatory comments related to race, gender or religion: 32 percent
• Candidate bad-mouthed their previous company or fellow employee: 30 percent
• Candidate lied about qualifications: 27 percent
• The candidate had poor communication skills: 27 percent
• The candidate was linked to criminal behavior: 26 percent

The good news is that the CareerBuilder survey found that more than 44 percent of employers have found content on a social networking site that caused them to hire the candidate. Employers cited applicants’ communication skills, professional image and professional or volunteer qualifications as social media content that swayed them in a positive direction.

Never stop networking

The right fit may come from an unlikely place. Join professional organizations, volunteer at events and get out into the community. Stay in touch with people who are interesting and a potential good fit for the team, even if there isn’t a place for them immediately.

Networking doesn’t have to mean handshakes and nametags. There are many opportunities to network online. Hang out where the talent that you’re looking for hangs out, whether that’s professional message boards, Twitter or LinkedIn.

Making a hiring mistake can be costly

According to a survey by CareerBuilder, a bad hire can easily cost a company as much as $17,000. This can be due to factors like training costs, hiring costs, interim replacement job coverage and more.

The Society for Human Resource Management proposes the costs incurred from a bad hire:

• Recruitment advertising fees and staff time
• Relocation and training fees for replacement hires
• The negative impact on team performance
• The disruption to incomplete projects
• Lost customers
• Outplacement services
• Weakened employer brand
• Litigation fees

CareerBuilder’s findings emphasized the importance of conducting thorough background checks and not rushing to hire too quickly. They found that while 72 percent of employers said they do perform background checks, 28 percent said they don’t have any kind of background checks at all.

Avoiding hiring the wrong people will help reduce costs and ensure you don’t have any disruption to your workflow. While it may seem to slow down the process, effective background checks will save you time, money and headaches.

Benefits of an Effective Team

There are solid benefits to a business when it has an effective team. Your wise hiring decisions could yield these advantages:

1. TEAMWORK: How can teamwork benefit individuals, organizations and businesses? When employees work together, each of their skills can be put to best use resulting in maximum efficiency and timely completion of work.
2. PRODUCTIVITY: A well-managed team has clear responsibilities and deliverables. Effective teamwork allows the members to cooperate with each other. Even if individuals fall behind with deadlines, the rest of the team can step in.
3. TRUST: The more organized and well-managed a team is, the more the team members will put their trust in their manager and each other. A team that trusts each other projects a good image to clients.
4. HARMONY: Workplace conflict can arise when people are unsure of their roles or their responsibilities. Good management means good communication that fosters harmony in the team.
5. INNOVATION: Effective team management frees up team members’ time and alleviates concerns, which gives them the opportunity to think creatively about their jobs and the business. Innovation can spawn growth in the business and pride in the team.

Wise hiring decisions alone won’t necessarily translate to having an effective team. How you manage them is the other piece of the puzzle of creating a great team.

Getting the Most Out of Your Team

Hiring one bad employee can have a drastic effect on the overall team, and in turn, the company. This is especially true for startups that don’t always have the same resources as bigger corporations. That’s why it’s vital to make sure the people you hire are a good fit.

Because each member of a small team has a huge impact on the business, it is critical that employers prioritize keeping the team together. After investing so much time and thought into hiring the right person, you can redirect that energy into fostering a company culture and creating employee benefits that make it easy for employees to stay enthusiastic, productive and on-board.

Foster a strong company culture

A strong culture can mean anything from providing competitive benefits to fostering a comfortable workspace. Failing to acknowledge a job well done can lead to resentment and a lack of willingness for the team to continue to give their all.

When then-CEO John Replogle took natural personal-care company Burt’s Bees global by adding 19 countries to its distribution, his team of managers became swamped and stressed. Replogle knew that he had to mitigate that environment. According to the Harvard Business Review, “Each day, he’d send out an e-mail praising a team member for work related to the global rollout. He’d interrupt his own presentations on the launch to remind his managers to talk with their teams about the company’s values.”

Replogle also hired a professional to facilitate a three-hour session on happiness for his managers. Senior team members told the Harvard Business Review that Replogle’s emphasis on fostering positive leadership kept his managers engaged and cohesive as they successfully made the transition to a global company. The efforts that he made were small ones, but their impact was significant.

Never stop training

You want your team to continue to develop their skills and grow in their jobs, both for your business’s sake and for theirs. Send them to trainings and conferences. Some companies give their employees a monthly budget to buy industry-specific books or other professional development material; others even pay their employees to read or otherwise learn new skills for several hours each week.

According to Society Insurance, providing continuing education to employees can help businesses create a highly skilled workforce, improve productivity and proficiency and boost employee retention.

Learning new things can boost an employee’s morale even if they have been in their position for a long time. Knowing that their company is investing in their improvement instills loyalty and a sense of security in an employee.

Support the team’s work-life balance

Encourage the team to have flourishing lives outside of work. As Fast Company said, “If you always run them at 110 percent, you will burn them out just when you need them to be on top of their game.”

91percent of respondents in a recent Deloitte survey said that having high levels of stress negatively impacts their work. Factors like stress and frustration with work can ultimately be a major cause of turnover.

Hiring more people and spreading out the work to prevent burnout may not be an option for a small business or startup, but there are other ways to prevent burnout.

A survey of 2,000 job seekers revealed that the most desirable job benefits to them involved time and flexibility. “More flexible hours” ranked first followed by “more vacation time,” “a work-from-home option,” and “unlimited vacations.”

Restrict the number of hours employees must work and limit take-home work. Make sure clients respect employees’ boundaries. After-hours phone calls and emails are not acceptable; likewise, no business during an employee’s vacation or time off.

If employees can and wish to work remotely, you should allow it. If the company can allow for flexible scheduling, it should be an option. For example, instead of having a workweek that is five days long, employees could work four 10-hour shifts. This schedule enables employees to have three days off each week instead of the typical two-day weekend.

Take Advantage of the Benefits of Remote Work

Over the past few years, remote work has become more common and acceptable. According to data from the Bureau of Labor Statistics (BLS), a year later, the top four detailed industries from 2021 still had over 46 percent of their employees working remotely. While some companies have shifted entirely to remote work, many others offer hybrid work models where employees spend part of their time in the office and part of their time at home.

When managing a remote team, it’s important to establish efficient communication channels, either through video calls or message services like Microsoft Teams. Digital Oceans suggests setting clear expectations, creating accountability and providing the right tools as some of the ways to keep remote teams working efficiently.

Know the work

To allow the business to flow organically and naturally, employers need to understand the specific skill set of each worker. To learn about each worker’s skills, you need to spend

Most Desirable Job Benefits:

• More flexible hours
• More vacation time,
• A work-from-home option
• Unlimited vacations

time with them, observe their work and their working style and inquire about what they like and dislike about their job. Have them share what areas they need to work on and what areas they excel at.

Observation can be a valuable part of workplace efficiency because it allows you to spot bottlenecks and redundancies and find ways to relieve them.

Set clear expectations

Employees should have goals – daily, weekly and long-term. Allowing employees to set their own short-term goals helps them to be more productive because they understand how they work best. A strong, clear and well-communicated command structure helps employees know who they are accountable to.

An article in the Harvard Business Review said, “For goals to be meaningful and effective in motivating employees, they must be tied to larger organizational ambitions. Employees who don’t understand the roles they play in company success are more likely to become disengaged.”

Employees should draft their own goals and then meet with their manager who will review and approve or amend the goals. Follow-up on a regular basis is critical. “Don’t wait for review time or the end of a project to check in,” the article explained. “Review both long-term and short-term goals on a weekly basis. Even your high-performing employees need ongoing feedback and coaching.”

Provide perks

Forbes interviewed entrepreneur Amelia Wilcox, founder and CEO of Incorporate Massage, a company that provides in-house massages to employees. That may seem like an over-the-top perk but, at least one company reported a 25 percent decrease in time off for workplace injuries and a $200,000 decrease in compensation claims when it implemented a corporate massage program.

Big-name and big-money companies can offer attractive perks to help boost employee satisfaction. For example, Apple offers their employees a 25 percent discount on devices, along with competitive benefits. Other companies like Airbnb make it a point to offer generous parental leaves.

Small company and startup managers may not be at a point where they are able to offer a competitive full benefits package, let alone luxury perks, but small and inexpensive benefits can go a long way for employee morale. Gym memberships, remote work flexibility and yes, monthly massages, are not as expensive as full benefits but still show employees that you care about their well-being.

Don’t overmanage

Sometimes you just need to know when to step aside. Micro-managing and overmanaging take away employees’ sense of autonomy and empowerment. Team members need to know you trust them.

According to Monster, 73 percent of workers listed micromanagement as the biggest red flag about a company. While some level of managerial oversight is always necessary, treating your employers like adults and trusting them as skilled workers will help workplace morale.

Traits of Effective Team Managers

Great leaders and managers have several traits in common. They inspire their team to perform to their best ability

1. THEY ARE CHEERLEADERS: Motivational managers inspire the company culture and encourage their teams. This kind of attitude can be contagious.
2. THEY ARE EMPATHETIC: Everyone goes through professional and personal struggles that can affect their work. The best managers are emotionally intelligent; they lead their employees and guide them with understanding.
3. THEY ARE HONEST: Good managers tell the truth to their team, even when it’s hard. They can be depended upon to not obfuscate.
4. THEY ARE ACCOUNTABLE: By taking ownership of their own goals, managers can foster a culture of accountability and empower team members to take responsibility for their actions.
5. THEY ARE DECISIVE: Effective managers can make well-informed decisions in a short amount of time to get the best results from their team.
6. THEY ARE GOOD COMMUNICATORS: It’s very important that managers can share goals, directions and expectations with the team.
7. THEY ARE SUPPORTIVE: If a manager assigns a task but fails to offer necessary support or training, the employee will feel abandoned. A few words of encouragement can go a long way.

There’s More to Managing a Small Business than Hiring and Managing a Team

According to the Small Business Association, about two-thirds of businesses with employees survive at least two years, and about half survive at least five years. Effective team management might be one of the most important skills an employer can learn, but there’s so much more to managing a small business or startup. You can learn the ins and outs of running your business or startup in the fully online, convenient Bachelor of Business Administration program from the University of West Alabama. The online BBA program has concentrations in accounting, business administration, management, marketing and more.

Download our Small Business Guide to Effective Team Management as a PDF.