For early founders, the people who join you are often betting on you before the business itself is stable. How you treat them when times get tough can define the company for years to come. We heard from Tommy Halvorson, Founder and CEO of The Fire Society, the company behind Foxtail Catering and Events, Radish, on why staying loyal to your team can be much more than just the right thing to do.
Playing the long game
When COVID hit, the events industry collapsed. Many companies let go of their entire teams. Tommy made the opposite call.
Tommy focused on keeping his team working. “We did this box program, which didn’t make us money as a company, but it provided work.”
Then after receiving support from the Restaurant Revitalization Fund (RRF), he used the income to thank the people who stayed. “I gave bonuses to all my management team for sticking around – $5,000 each.”
“So when business came back in 2022, I had the team while no one else did. We went almost back to 2019 revenue in nine months because we invested in our team.”
As Tommy experienced, keeping good people is almost always a better investment than replacing them. Training and growing the people you already have delivers far more value than the expense of recruiting and ramping up someone new.
In fact, it’s estimated that the cost to replace a single employee can be anywhere from six to nine months of that employee’s annual salary, and sometimes even higher for specialized roles. This includes not just recruitment and hiring expenses but also the hidden costs of lost productivity, reduced team morale, and the time it takes for a new hire to get up to speed.
“Sure I am a good person. I do care about our team members’ trajectory. But it’s also actually just smart from a business perspective.”
Loyalty that compounds
For Tommy, loyalty goes both ways. He points to Ally, who started part-time in social media in 2013 and is now a partner. “She built her career here. She’s not going anywhere. And the business benefits from that.”
His philosophy is clear, “I feel like I’m at the bottom of a pyramid pushing up. Some people think they’re at the top and everyone supports them. I think it’s the opposite.”
That kind of leadership builds trust and unlocks growth. LinkedIn’s research into over 32 million member profiles showed that found that employees who make internal career moves are far more likely to stick around long-term.
Questions to ask yourself when in crisis or looking to scale up
If you’re weighing hard choices about your team, consider:
- Will cutting roles now leave you unprepared when demand rebounds?
- What non-financial benefits or responsibilities can you offer to keep people engaged?
- Who on your team could grow into leadership if you invest in them now?
As Tommy says “Sure I am a good person. I do care about our team members’ trajectory. But it’s also actually just smart from a business perspective.”
In fact, Oxford and Harvard researchers found that companies with higher employee wellbeing consistently outperform peers on profit and valuation.
Focusing on your team’s wellbeing and staying loyal to them isn’t just the right thing to do. It can also become your sharpest competitive edge. It doesn’t only benefit productivity, but when the market turns, the team that stayed with you will be ready to carry the business much further than you could alone.
What exactly is your role?
If you are wondering what your role is to ensure that your team not only has the financial support but also the emotional and professional support they need to stay loyal through thick and thin…
- Invest in their knowledge and growth, do not shy away from a training opportunity.
- Provide regular feedback and allow it to go both ways.
- Allow space to make mistakes and learn from them. You will need the same grace from your team as you grow together.
- Don’t hide the scary stuff from your team. Keep them involved by tapping into their superpowers when you need them the most.
Tommy has built teams that not only enjoy the work they do, but understand that they are supported by a founder that truly values who they are as people, and what they contribute. Building that kind of trust and loyalty takes time – and by putting in time and effort now, you can build long term success, with a stellar team by your side.
Take inspiration from our network of Founders and become a part of a supportive and welcoming community by joining Follow the Founder. You can also find us on Instagram @followthefounder
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