From recent experience, the biggest companies in Silicon Valley can tell you that there is no legal way to completely stop your employees from going over to the competition. They already tried the illegal, no-poaching rout. After finally reaching a settlement everyone could live with, they had to come up with new ways to keep their employees from leaving. Instead of keeping them prisoner, they will have to try making them happy.
You can learn from their example by skipping the step of locking them in contract prisons, and go straight to the step of making them happy. To do that, one must employ creativity. It is not always about offering the most money. While great employees want to maximize their earning power, that is not the only thing that motivates them.
By considering the things that made you want to start a business in the first place, you will be better able to incentivize your workforce. You might be surprised at what makes the difference between a person sicking with you and leaving for greener pastures. Here are a few examples:
Reduce Payment Friction
Would you rather be paid $2,000 a month, or $1,900 a month in increments every Friday? There is a pretty good chance that a significant percentage of your workforce would go for payment every week, even though it is less overall. A financially stable person would rather have the larger amount of money. A person living from paycheck to paycheck will most certainly prefer more paychecks.
The point is not that you should offer less money. Rather, you should offer more options. Sometimes how a person is paid is as important as how much they are paid. According to ADP:
Wage payroll solutions including payroll cards, help increase electronic payroll adoption and reduce complexity.
One of the ways payroll cards help decrease complexity is by catering to the needs of the unbanked. In 2013, nearly 8% were unbanked while just over 20% were considered underbanked: having a bank account, but using alternative financial systems. Payment cards eliminate the friction between their preferred payment system, and the way they get paid. The more options you can provide a person for how they are paid, the happier you will make them.
Make Them Important
No one wants to be a stooge or errand boy. Everyone wants to feel like they are making a substantive contribution to the whole. You can help with that by giving the people who work for you more responsibility.
It is not about overworking and underpaying. It is about recognizing the value of each employee, and keeping them engaged at their highest level of capability. There are definitely some best practices for rewarding employees with more responsibility and money. But it is not always about a formalized promotion.
Underperforming employees might simply be bored from underutilization. Do not always assume the problem is a talent gap. It may well be an incentive gap.
Give Them a Roadmap
Have you ever bumped your head on a glass ceiling? That is possibly what put you on the road to entrepreneurship in the first place. No one wants to be in a dead-end job, even if it is a good job with decent pay. They need to know your company has a clear path to advancement.
One of the main reasons millennials leave a job is lack of a clear path to advancement. They are simply too young to envision themselves in that same job for the rest of their lives. The position for which you hired them is not the position they expect to have five years later. They will leave for the possibility of a promotion someplace else. Be sure you are the one who offers them the path to their next job.
Even if you could create some sort of contractual lock-in, you wouldn’t end up with a very happy or productive workforce. Offer them the kind, not just the amount of payment they need. Give them responsibility equal to their ability. And be the one that offers them a clear path to their next job.