Every year, in its September issue, Inc. magazine publishes its “Inc. 5000” annual ranking of the fastest-growing private companies in America. Two years ago, when the Inc. 5000 list for 2015 came out, we extracted some of the highlights in an attempt to learn what characteristics all these entrepreneurs have in common that make them successful. We will attempt to do the same thing here with the Inc. 5000 list for 2017, but with a focus on the people side of the equation. So, if you’d like to learn how these top entrepreneurs hire and retain the best people, please continue reading below.
Inc. magazine’s 5000 fastest-growing private companies in the U.S. (revisited)
Inc. surveyed the companies on the Inc. 5000 list. Of the companies that responded to that survey, 62% said that hiring and retaining good people was the biggest obstacle to their growth. That’s almost double the number of respondents who cited other obstacles to growth. So what do these respondents say they are doing to keep their rosters full of quality people?
While there are a variety of benefits the surveyed companies offer to attract and hold good employees, a number of those benefits are aimed at giving employees a degree of autonomy or self-direction. For instance:
- 70% of respondents allow employees to work remotely.
- 31% offer unlimited vacation.
- 44% offer educational stipends.
Among the surveyed companies, 66% said they actively work at achieving a work/life balance while only 34% said work/life balance is “a nice fantasy.”
And then there were a few survey questions about pay. Almost half reported that the wage gap between their highest and lowest paid fulltime employees was in excess of $100,000. When asked, “Who is the highest paid employee at your company?”, 28% responded “Not me.” The top vote-getters for highest paid employee were tied at 20% . . . Head of Operations and Head of Sales.
To build and keep an innovative workforce, one respondent advised, “Hire great talent and listen to them. Unfortunately, most companies fail here.” Others recommended building a great company culture. One cautioned, “When you’re growing like mad and hiring fast, it’s easy to ignore red flags and bring in someone who’s not a good fit. Do so too often, and you can alter your company’s DNA irreparably.” Another said, “When we have a bad culture fit, no matter how good the person is, we fire that person. I fired my top sales guy. His ego grew too large and he abused relationships, and we fired him.”
Respondents were asked to choose three qualities they believe are responsible for their success. Not surprisingly, “Determination” was on top with 65% of the vote, followed by “Risk-Taking” at 57%, and “Vision” at 47%. Strangely, “Likeability,” at only 13%, barely made it onto the list. Yet we know customers do business with people they know, like, and trust. We also know that employees will stay longer at a company when their boss is someone they know, like, and trust. So you’d think “Likeability” would have fared better than a lowly 13%. But it didn’t. Still, not all of the respondents were quite so hard-hearted. Asked “What is the best thing about being a founder?”, one respondent said, “Being able to provide opportunities to my employees that allow them to live the life they would like to.” Another answered, “Being a job creator. There is satisfaction in giving people a career.” However, on the flip side of that, many founders agree with this one who said, “The hardest thing about being a founder is knowing that I’m responsible for the livelihood of my employees.”
Here are some other noteworthy, people-centric quotes from the respondents to Inc.’s survey:
“Focus on growing other people, not just yourself.”
“When we see somebody we like, I say, ‘Holy cow. I don’t care if we have a job for them or not.’ We hire them.”
“Structure trumps strategy. Work super hard on the structure of whatever business you’re in so you can scale that business.” His point being, strategies will change over time, but if you have the right structure in place, your organization will be able to adopt to those changes in strategy.
There you have it. Bits of wisdom from Inc. magazine’s 5000 fastest-growing companies list. We’ve tried to focus here on what these successful entrepreneurs do with the people side of their businesses . . . how they attract and keep the best. But there’s more, much more, to learn about the challenges entrepreneurs face when their companies are experiencing very rapid growth . . . strains on their organizations that you might not guess unless you’ve been through it before. If your company is in a fast-growth mode, or may be soon, the September 2017 issue of Inc. will be a useful primer to tell you what to expect and what to prepare for