In a competitive marketplace, companies should follow these five rules to acquire, and keep, talented employees.
No matter how strong your value proposition for customers, the primary driver for your business' long-term growth will always be your people. Smart people create great products and provide top-notch service to clients, which can generate strong profits for your company.
But recruiting and holding on to talent is not easy. Good employees are scarce in number but high in demand, which makes it necessary for companies to structure their business around talent and provide an environment that enables those employees to thrive.
Here are five ways in which businesses can accomplish this:
Allow employees to "play."
Companies like Apple (AAPL) and Google (GOOG) are well known for hiring smart people and then allowing them to express their creativity, experiment with new ideas, and (to some extent) define their own roles. This keeps the pipeline of these companies filled with cutting-edge products and helps maintain their lead in the market.
More importantly, this principle can be applied in other sectors as well. Retail, food, health care, and even financial services businesses can benefit from encouraging their employees to think outside the box instead of regimenting them. This not only aligns talents with business models but gives employees a true sense of ownership in the enterprise and keeps companies evolving.
Look for mavericks, not drones.
Businesses should ask themselves whether it's more important to have mavericks who challenge their company to improve or drones who add little value beyond simple execution. The most talented employees will sometimes defy the status quo, but that is essential in a competitive marketplace where disruption is commonplace and business models can become obsolete overnight. Those mavericks might annoy you occasionally and be hard to control, but they may also save your business and help it reach great heights.
There are, of course, basic administrative tasks that need to be performed in a strict framework, but other aspects of a business, such as product development, marketing, customer acquisition, and even senior management, can benefit from throwing away the rulebook and tapping into the unique strengths and insights of contrarian employees.
Pay employees above market.
The problem with market pay scales is that they are based on the average pay for any given function instead of for the highest performers. Yet these outliers are exactly the people you want to hire. So if you pay people according to the market, you're unlikely to attract those outliers who expect (and deserve) more than their peers. Market rates may be appropriate for lower-level jobs that involve little specialized knowledge or skill, but above that level it is advisable to pay well above market in order to attract the best talent.
This might seem obvious, but the temptation to secure talent as cheaply as possible is strong and can easily lead to pay inertia, and by extension, performance inertia, at companies. If businesses really want to outperform, they first need to compensate their people appropriately.
Embrace your employees' personalities.
Today's workforce, comprised primarily of millennials, is nothing if not individual and quirky. A one-size-fits-all culture in a company will produce one-size-fits-all results. Outlier employees often require, and even demand, an outlier culture and freedom. Companies that allow employees to express their natural personality are more likely to attract and retain talent and obtain the best work product from them.
This can range from simple things like flexible work schedules and allowing employees to design their own workspace, whether it be a private office or a cubicle, to more complex aspects like work styles. For example, some people are great at problem solving or communicating ideas over email (or generally in writing) but falter when forced to do it in person. Smart businesses will recognize this quirk in such employees and, rather than penalize them for it, adapt their own expectations to achieve performance.
Respect personal privacy.
In an era of declining personal privacy, businesses can stand out by refusing to pry into their employees' private lives, especially on social media. Don't "friend" your employees on Facebook or follow them on Twitter. It's perfectly reasonable to have a company policy that requires employees to be responsible in their social media posts, but following them actively could turn off (and turn away) the most promising candidates.
Also, by allowing workers to lead their private lives the way they want to, you are supporting their personal happiness, which inspires loyalty and can promote productivity in their work lives as well. This relates to the point above that the more talented a person, the greater their need for independence in order to realize their potential.
This post originally appeared on TIME.com.
Sanjay Sanghoee is a business commentator. He has worked at investment banks Lazard Freres and Dresdner Kleinwort Wasserstein and at hedge fund Ramius Capital and has an MBA from Columbia Business School.