Click the image for details. Research on internal management of private enterprises/Pan Wenfu
- Bosses hire new employees to give themselves a new hope;
- Bosses manage employees to turn their hopes into actual value;
- Bosses fire employees because they discover the employee is actually worthless;
- Bosses retain old employees to continuously leverage their value;
All relationships in business revolve around the word "profit." Whether employees stay or leave, and whether bosses like or dislike them, all stems from this. In other words, as long as an employee can make money for the boss, it doesn't matter if they're ugly; if they only lose money for the boss, even if they're as handsome as Pan An, the boss will still find them annoying.
In current distributor companies, the reality is that excellent employees can't be retained, while useless employees refuse to leave. So-called excellent employees are those whose qualities and abilities stand out from the average, whose performance ranks at the top, who can solve market problems better than average employees, and even better than the boss. Furthermore, they are the ones who can create more value and profit for the boss. Naturally, these are the employees to retain. But retaining employees isn't just a matter of the boss wanting to keep them; often, the boss tries every means and spares no expense, yet the old employee doesn't appreciate it and leaves anyway.
Actually, the boss doesn't retain people just for the sake of retaining them, but to keep the abilities and skills in the old employee's head, such as experience, techniques, methods, materials, and customer relationships. These abilities are tools that help the boss do business and improve performance and revenue. These abilities are stored in the old employee, so to keep these abilities, the carrier of these abilities—the person—must be retained. Of course, not every employee has these abilities; only a few excellent old employees do, and these are the ones the boss wants to keep.
If every employee had these abilities, there would be no need to retain specific individuals. So, how can we both retain people and ensure everyone has a certain level of ability?
Let people go!
What does "letting people go" mean? It means the distributor boss proactively recommends his subordinates to upstream manufacturers or larger peer companies. If done properly, it can greatly alleviate the pressure on the boss in retaining people, and also universally improve the abilities of all employees.
So, why let people go? How to let people go? What effects will it achieve? Let's analyze these one by one.
Why let people go?
This is because retaining people is not that easy. Distributors, as small companies, have low social status and cannot provide employees with enough security and support. Water flows downhill, people strive for higher positions. Facing the call of big companies, they naturally cannot be retained. Moreover, the comprehensive cost of retaining people is not low. To attract employees, personnel costs must increase. At the same time, the boss's methods to retain old employees will cause dissatisfaction among other employees. Most importantly, old employees will think they are more important in the company and will demand more in terms of treatment, position, and rights. If they don't get what they want, they will still leave.
How to let people go?
As a distributor, there are naturally many external partners or contacts, including upstream manufacturers, downstream retail outlets, and even local peers. Naturally, they can find out about various job recruitment information. Then the boss proactively contacts and follows up, recommending employees who have always wanted to change jobs or think they are highly capable to other companies. Of course, it's just a recommendation; whether it succeeds or not doesn't matter. What matters is that employees see that you are proactively recommending them to other companies (especially big companies), not retaining them but sending them out.
Why do this?
The reasons are simple:
Let some employees who think highly of themselves calm down. Don't always think the company can't do without me, the boss can't do without me. Now the boss can even help you contact a new company, showing that the company definitely won't stop turning without you.
After contacting new companies, especially large ones (like upstream manufacturers), these old employees who think they are capable will find that their so-called strong abilities are only within a small scope inside a distributor company. Once they come into contact with big companies, they will naturally discover that these big companies have quite high requirements for employee quality and ability, often exceeding their current actual situation. In other words, their current skills are not enough to enter a big company yet.
Some employees have always had the idea of changing jobs, such as jumping to a larger company or to a manufacturer, but lacked the opportunity. Now, the boss proactively creates this opportunity for them. Whether successful or not, at least it shows the boss is not a narrow-minded person. Such a boss is worth associating with. If the recommendation succeeds, then the boss is even a benefactor.
As employees of a small company, wanting to jump to a big company is a normal development desire. As a boss, there is no need to avoid or suppress employees' development desires, but to face them, and further, to utilize employees' desires.
Whether retaining or letting go, the ultimate goal is for the company's performance and the boss's wallet. So, between letting go and retaining, what other work does the boss need to do?
Reposition the value of old employees and excellent employees. The value of old employees is not just doing the work better, but teaching other employees to do the work better. That is, old employees should have an internal training function; improving the work ability of all employees is the fundamental goal, not just the improvement of individual employees.
Retaining people is actually because of the knowledge, experience, skills, customer relationships, etc., in old employees. Actually, there is no need to retain these things by retaining the person; they can be retained through other forms. For example, arrange internal training sessions where old employees act as teachers to train new employees, and this training should be regular, every week. Or whenever old employees make new progress or learn something new, immediately arrange such training sessions to dig out the contents of old employees' minds in time and copy them to all employees. That is, people can leave, it doesn't matter, but these things (knowledge, experience, skills, customer relationships) must stay. In this way, even if old employees leave, it won't affect the company much.
3. Establish an internal knowledge system. Currently, most distributor companies do not have an internal knowledge system. Over the years of operation, the accumulated experience and skills are scattered in the minds of the boss and many employees, without a systematic tool for collection and integration. Three systems can be designed as integration tools to organize and improve the company's knowledge system. One system is the job description manual, which clearly explains what each position in the company does, how it should be done, and the specific actions and processes. It should never be left in individual minds but concentrated and collected in the form of a job description manual, organized by categories. Second, establish a business handling manual, which writes out all problems that have occurred in business work, as well as related solutions or preventive measures. That is, dig out the rich work experience of old employees in written form. Third, establish a customer file management system, where all customers are registered in tables by type. The file forms must be detailed enough to include the customer's birthday, temperament, and chronic diseases. Also, any changes in customer information should be promptly supplemented and updated.
By implementing these measures (which don't cost much), the capital in old employees' minds (knowledge, experience, skills, customer relationships) can be dug out one by one through lectures, manuals, and files, and copied as much as possible. After all, what old employees have mastered was paid for by the boss, allowing them to learn through wear and tear in the market. Since the boss paid the tuition, it's only natural for them to hand over their learning results to the boss. Furthermore, people have legs, and with legs they can run away; the boss can't stop them. So, it's essential to retain the most precious things from employees—knowledge, experience, skills, customer relationships, etc. By then, even if old employees leave, the impact on company operations will be minimal. However, once old employees sense that their capital has been mostly dug out and other colleagues have mastered it, and they have also been in contact with big companies (knowing what their skills are worth), they often don't want to leave. At the same time, if the boss has the courage to let people go, employees naturally won't be so arrogant.
Many distributors try every means to retain people, partly influenced by the manufacturer's personnel management system. However, there are many differences between manufacturers and distributors. Take this matter of letting go or managing people: the situations for manufacturers and distributors are completely different. Let me use an analogy to explain this simply. Manufacturers manage employees like raising sons, while distributors manage employees like raising daughters. When raising a son, you absolutely cannot let him go out. If you painstakingly raise your son to adulthood, and he is recruited by a girl's family as a live-in son-in-law, and the children take the woman's surname, then you've lost big. So, sons must never be let out, and you should also bring daughters-in-law in. Distributor companies are different. Distributors manage employees like raising daughters. It's best to find a good husband for your daughter when she's around 23 or 24 and marry her off. The daughter will be grateful to you for life and will try to bring things from her husband's family to her natal family. If you keep your daughter at home and don't let her marry even when she's over 30, she will surely cause a big fuss at home. Actually, retaining employees is similar to retaining a daughter.
As a boss, the ultimate goal is to achieve profit. Whether to let go or retain is just a choice of method.
Born into a private business owner family, I have managed a family distributor company for many years, and during that time, I also served as a business manager and trainer in several production enterprises. My research direction is the internal management of small and medium-sized private enterprises, with main topics including personnel management, cost control, management backend construction, and the integration of retired military personnel into private enterprises. I have continuously broken down over 400 topics related to internal management of private enterprises and kept updating material collection and solution development.