May 8, 2021

Small Business Advice

Why it's important to have backup for each employee (including yourself)

| 6/10/2016

"Understand that most problems are a good sign. Problems indicate that progress is being made, wheels are turning, you are moving toward your goals. Beware when you have no problems. Then you've really got a problem... Problems are like landmarks of progress." ~ Scott Alexander

One problem with which some business owners or managers continually struggle is being held hostage by employees. This normally happens when the manager or owner feels an employee cannot be replaced either because of job skills or knowledge of the business.

I often hear entrepreneurs say, “I just do not know what I would do if this employee left,” and when I hear this, I know the employee could hold the organization hostage. From a strategic and tactical point of view, an employee should never become so valuable that you cannot afford to replace them.

One rather extreme example I have heard of happening over and over is when IT employees shut down the business by restricting access to computer data vital to the operation. One actually demanded a promotion and a $50,000 cash payment before opening the information back up.

There are much more subtle cases as well. For example, say an employee wants a salary increase, and the business owner feels she cannot do without the employee. That is enough of a threat that she gives the employee the raise, but not for the reason the employee asked for it. To the owner, this employee’s job is so critical to her business that she feels she just cannot afford to lose him or her.

Dealing with this problem involves first figuring out which employees are absolutely critical to the business. Evaluate which tasks must be done and if you have anyone else who can do them. In my experience, you normally find these employees in the IT and accounting areas, but others may be vulnerable as well.

Once you identify which employees could hold you hostage, the next step is to develop a plan for how you will handle a situation like this if it was to arise. Cross-training can ensure other employees are able take over critical responsibilities. Another option would be to identify potential employees you could hire to fill the position.

In the case of the IT example, you want to ensure no employee has the ability to lock you out of your computer system. Sometimes it is worth the money to hire an outside firm to come in and evaluate how secure --or vulnerable-- your computer systems are. A firm like this can make recommendations to help ensure no employee can hold you hostage.

The key here is that you need to be proactive and have a plan in place before a situation arises.

Now go out and develop a plan for dealing with employees who hold your organization hostage.

You can do this!

Dr. Osteryoung has directly has assisted over 3,000 firms. He is the Jim Moran Professor of Entrepreneurship (Emeritus) and Professor of Finance (Emeritus) at Florida State University. He was the founding Executive Director of The Jim Moran Institute and served in that position from 1995 through 2008. His newest book co-authored with Tim O'Brien, "If You Have Employees, You Really Need This Book," is a bestseller on Amazon.com. He can be reached by e-mail at jerry.osteryoung@gmail.com.

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