TOUGH CALL: Keeping Good People

By / 1 year ago
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Tough-Call---september-2015---keeping-good-peopleAs the housing market has gained steam over the past couple of years, you’ve had the right team of people in place to manage the growth in sales. From talking with LBM dealer friends from across the country, you realize how fortunate you really are. Then again, believing as you do that we make our own luck, it’s good to know that you’ve built a place that employees appreciate. And what’s not to like? You make sure your compensation and benefits are in line with others in your market. You understand that they work to live—they don’t live to work—and so you’re as flexible as possible when it comes to family and personal time. They have input on policies and decisions that affect them. You’ve worked hard to make sure they’re engaged and involved, and rewarded for their contributions. How else to explain your company’s very low turnover?

It’s for all of these reasons that the conversation you just had with James, a long-time employee, caught you off guard. James has been with you for years. He started with you part-time during the summers building loads and helping out in the yard. After graduating, he came to work full time in an entry-level warehouse position. A few years later, when you gave him a shot at inside sales, you quickly saw that sales is where he belongs. Now, as your top outside salesperson, James has developed relationships and friendships with some of the biggest accounts in your market…a fact that hasn’t gone unnoticed by your competition.

After witnessing how much business James generates for your company, they’ve set their sites on him. As James shared with you, they’ve been courting him pretty aggressively for the past few months. His answer with them was always thanks, but no thanks. “I told them that you’re the one who gave me my start in this industry, that you treat me well, and that it wouldn’t be right to take what you taught me and use it against you,” James explained. “They said they respected my decision…but then just kept upping the offer. Their last offer includes a sizable increase in pay, including a solid base and generous commission package. Plus, they’re offering a lot of perks. As much as I’d like to stay with you, I just don’t see how I can turn them down.”

James shared the offer letter with you, which spells out exactly what they’re offering. You’re tempted to match their offer, but you don’t see how they can pay him what they’re offering and still earn a profit. As good as James is, and as much as you’d hate to lose him, you’re not going to extend an offer that your company can’t afford. Unlike your company, which has deep roots in the community, the competitor courting James is part of a much larger national company that’s relatively new to your market—and their future as a local competitor is uncertain. It’s tough to say no to a big jump in pay…unless the long-term prospects aren’t there. “I trust you, and I value your opinion,” James said. “What should I do?”

1. Wish him well. Tell him that you can’t possibly match their offer, and don’t want to hold him back. Wish him all the best, and say goodbye.
2. Promote. Give him a modest bump in pay and perks, as well as a small stake in the company, along with a new title. Maybe VP of Sales?
3. Counter. While you can’t match their offer, you have some room to move. Negotiate an increase in pay or perks, and keep him on your team.
4. Hold steady. The last thing you want is a bidding war. Sit down with James, go over the pros and cons, and help him make the right decision (which is to stay with you).
What would you do?

Something else?
If you’d take a different plan of attack, email your suggested solution to

Rick Schumacher

Rick Schumacher is the editor and publisher of LBM Journal, and has more than 24 years experience covering the industry.