Family atmosphere profits small firms

October 2006 » Business Briefs
Small businesses profit by hiring workers who fit into their company culture, creating a "family-like atmosphere" where employees are trusted to manage themselves, according to a study by Christopher Collins, associate professor of human resource studies at Cornell's School of Industrial and Labor Relations. Collins found that small businesses that follow such strategies reap 22 percent more revenue growth, 23 percent more profit growth, and have 67 percent less employee turnover than companies that do not have such hiring criteria.

Small businesses profit by hiring workers who fit into their company culture, creating a "family-like atmosphere" where employees are trusted to manage themselves, according to a study by Christopher Collins, associate professor of human resource studies at Cornell's School of Industrial and Labor Relations. Collins found that small businesses that follow such strategies reap 22 percent more revenue growth, 23 percent more profit growth, and have 67 percent less employee turnover than companies that do not have such hiring criteria.

Successful hiring strategies include the following:

  • hiring employees to fit in with company culture, rather than just hiring solely on a job candidate's individual skills;
  • trusting employees to manage themselves, rather than enacting strict controls; and
  • creating a family-like environment, rather than trying to motivate employees solely through money.

The findings are based on surveys of owners, managers, and employees of 323 small businesses from across the country that employed between eight and 600 employees. The findings are the fourth installment on a two-year, multi-phase workplace study sponsored by the Gevity Institute, a human resources outsourcing and consulting company for small businesses that supports research at universities and businesses.


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