I’ve been in business 20+ years - starting alone for the first years. Built it up and now have 5 employees. Recently I have been talking to my employees about buying into the company as I am nearing retirement. I gave two of my employees raises one of them a percentage based on his production. after that I got total silence never a thank you or anything so that caused some concern right there. One of the employees was receiving over $1000 a month raise. Recently I got Covid-19’s bad and was out for 2 months. I I have cameras at work so me and my partner were reviewing the cameras and noticed they were talking a lot of shit about me and making plans to start their own business I’m presuming stealing all the high-end clients. The Reality is that is if you put employee in the responsibility of dealing with clients you have to deal with the prospect that he might steal them eventually. less people and less drama and possibly hiring subcontractors to handle the business that I pay these people a lot of the time to stand around and do nothing might be better. We have a established a business location and will probably be fine. previously I’ve been talking with my right hand man about my exit strategy but now I want to talk to him about his exit strategy, one of the employees is poison to the others I can hear him talking shit about me and the business. I’m sure a lot of you experience the same type of situation’s any advice on how you handled it and the outcomes thereof would be appreciated thanks guys
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@douche-bagle I would recommend you read the book: “How to grow your small business“ . I started my data consulting company 4 years ago and found lots of valuable insights from that book. You should also have your employees sign an NDA, and a non-circumvention agreement. I’ve used Rocket Lawyer before and they have tons of legal forms. Good luck.
The main thing is for you to decide what you want to do. Then stick to whatever decisions you make
Do you have your employees sign an agreement that they cannot poach clients?
As a freelancer I have a similar clause that states I cannot poach employees. You may want to think about including this going forward.
Once you fire them, all that goes out the window in right to work states. From a different perspective, it takes an employee a lot of gumption to step out on their own versus a safer bet as an employee. Usually their motivation is because they feel at a dead end and have been over promised and under delivered. It’s a balancing act, but I’d say these days that employees are mostly impacted by their expectations from the employer falling short - an obvious one is wages not keeping up with inflation, but the more significant reasons are generally their perception of whether they have a positive outlook in their existing role. Acknowledge top performers and reward them, at the same time, don’t let the clock punchers bleed you dry; they’re not going anywhere anyways…
Talking shit how? What was said?
Frankly, you sound super insecure. You’re nearing retirement and your employees are looking to start their own business. You’re butthurt that they won’t buy yours. They don’t owe you anything, as you seem to think they do (why would you have mentioned the recent raises if not?).
Your kind doesn’t deserve people who respect you. You’re a narcissist.
I would connect with some of your best clients and have frank discussions with them. Find out what contact your enployees have been making and explain your situation and work out solutions or alternatives. You don’t know what the employees have been actually plotting until you root it out. I’ve had similar situations where employees were poaching customers and found out when the customers (and vendors) actually came to me to tell me what had been happening. They wanted to me loyal to me and opening up the channels of communication really helped all around.
I have had this happen to me. In fact it was someone I was close to (family member). In fact (woman owned in a male dominated field) every man that I hired prior to bringing my husband on to run operations tried to start their own business and take clients from me. Non-competes are not valid where I live.
First, I would fire those two employees immediately and by surprise so that they no longer have access to the clients. What will happen is the clients will get a phone call from them in a few weeks to months stating that they have left and started their own business. It will take them this long to learn how to start a business and procure the equipment, material, and certifications that they need. For the clients, especially the loyal ones, this will throw up a red flag. Or it might not and that client will give them a try. They will most likely call you at which point you can express that they were caught on camera plotting to steal customers. To clients this is an automatic sign that they cannot be trusted.
The thing is, at least in our case, not only are we very very good at what we do, we are lower priced and we pay our employees very well. None of our competitors can keep up with us, and non of the former employees who have tried have been successful.
you can express that they were caught on camera plotting to steal customers
Except that’s not what happens. Op clearly stated that was a guess
Or don’t express that. But if a client is calling you, it’s safe to assume that is exactly what happened. It doesn’t take much to put 2 & 2 together.
That is what happened in my case. Clients called me and said “why is this guy calling me are you ok?” My ex employee (the family member) told them that we were no longer in business and that he was taking over our clients. Once word got around that he was literally lying to them before he was even hired, his endeavor stalled.
Non-competes are not valid where I live.
The real solution you’re looking for is Non-Solicitation & Protection of Confidential Data. Both of which are enforceable.
Simply put, sure – the employee go work anywhere he wants to. He’s just not allowed to use any of the data gained during employment here.
As it turns out non-solicitation is also not valid in the state I live.
Reality is, all employees think they can do better than the owner, they think they’re smarter and more capable than the owner. 90% of your employees will steal. Whether it’s a product, money or an idea. Your job is to proof your business so they won’t be able to. Given that in 20 years you couldn’t achieve that, that’s on you. People are shit.
A lot of owners overspend, and we found them cheaper ways to do things. We made them rich.
Our owner wasn’t hungry and always wanted to stay small.
Our owner gambled and played cards on his office computer.
We got hired by another owner and they pay us more.
I also looked into a commercial painting company that quoted us $40,000 to paint a large room. We ended up painting it ourselves. Another company said it was way beyond what they would do and didn’t give us an estimate. We did modifications on our space to keep us in business.
We find business all of the time, but the relevant people won’t go out and talk to them. We recommended one customer to our salesperson, and she went out and got business, but they won’t send her out to get more business again and nothing new comes in. They won’t talk to the customers we lost because they won’t service them.
Toxic employees are a cancer to a small business. You must get rid of them, otherwise they will poison the rest of the staff. As for employees considering stealing your clients, it’s important to get back on top of your relationships with high end clients. My field is somewhat relationship based so this isn’t a huge issue for me (I have to stay in touch to keep my business) but I can recognize what a rogue employee could do.
Have an action plan and don’t react with emotion. Mitigate risk, get back with your best clients, if you think an employee is poised to snatch them, get them off those accounts. You can very easily explain it away by saying you want to ensure you’re contributing to the success of the company and that it’s your way of keeping touch with the day to day and what your employees have to wrestle with.
Just a few comments:
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Another business taking clients from you is not “stealing”, and they are not “your” clients.
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Employees who are not doing a good job or who are not meeting your expectations should be let go. If you are not in a position to let them go it’s because you’ve failed as a business owner and manager.
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If you have put your employers in the position of holding or winning clients you should be treating them a effectively partners since that’s a closer description of your relationship.
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Agreed. So much involved that they don’t deal with. Thank you buddy
Decide what you want. Do you want to do battle or let the company die?
You can fire these guys, hire some new staff, and get on the phone with every client, customer, supplier, and relationship you have and close them again.
Or
You can have a frank conversation with your staff and let them buy you out. You may even be able to do seller financing, but that may be a bad idea if you don’t have faith in them or trust them.
The question is, what is your buissnes really worth? What is the breakdown of equipment and IP vs, just the client list?
Most talk about opening there own business but thats all they ever do is talk!! Wage slaves are to scared to take a risk. However, cancer creating employees need to go!! Be careful about what you say. Ensure no privacy violation with camera etc.
Better talk to your attorney. What state are you in? You very well could be facing a lawsuit for audio recording, even if you have a clause in your employee handbook.
Also sounds like your the ah. If you tagged your employees better you wouldn’t have this problem.
That’s why many companies have you sign a no compete contract.
Probably too late now? But I would include it for all future employees, and THOSE THAT WANT TO STAY.