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Steven Dengler, CEO and co-founder of XE.com, works out at the company gym in Newmarket, Ont. (Sarah Dea for The Globe and Mail/Sarah Dea for The Globe and Mail)
Steven Dengler, CEO and co-founder of XE.com, works out at the company gym in Newmarket, Ont. (Sarah Dea for The Globe and Mail/Sarah Dea for The Globe and Mail)

In the race to hire the best, small firms pick up speed Add to ...

Looking at the list of employee perks at XE.com, it's easy to mistake the Toronto-based provider of online foreign exchange tools and services for a large technology firm.

On-site gym with high-end equipment, change rooms and showers? Check. A games room where employees can play table tennis, air hockey and foosball? Check. Comprehensive medical and dental benefits, RRSP matching contributions, and maternity benefit top-up to 95 per cent of salary? Check, check, check.

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Generous salaries? Yup, got that too.

But for all its bells and whistles, not to mention its tremendous growth trajectory since it launched in 1993, XE.com is a small business with 25 employees working out of its 12,000-square-foot headquarters in Newmarket, just northeast of Toronto.

"We're a small company that's growing," says Steven Dengler, XE.com's co-founder and CEO. "We began with two people in 1993, we've grown to a team of about 25 people, and now we're looking to bring that number up to 30."

In the race to be an employer of choice in what is expected to be a tight labour market, many small companies like XE.com are going the extra mile. They have to: While some workers seek out the coziness and entrepreneurial atmosphere of a small company, many still prefer the prestige and generally higher salaries offered by large employers.

For small companies to be seen as the place to work, they have to work hard to overcome a number of challenges peculiar to small enterprise - from a limited ability to promote employees to a fishbowl environment that can easily give rise to micromanagement and personality conflicts.

"The main challenge is getting the word out that you're a good place to work for," Mr. Dengler says. "A lot of people assume that because you're a smaller company you won't have a lot of the things that are typically found in larger companies - like a gym, flex hours or maternity leave top-up."

Even when a company offers generous employee benefits, some workers shy away because they're worried there won't be enough room for career advancement.

Gary Gannage, president and CEO of the Association of Management, Administrative and Professional Crown Employees of Ontario, or AMAPCEO, says that's a reality he and his hiring managers don't hide from prospective employees.

AMAPCEO, a union representing Ontario government and agency employees, has eight types of jobs within its hierarchy, Mr. Gannage says. Workers hoping to climb the corporate ladder will find themselves limited to only a few rungs.

But despite this, AMAPCEO enjoys low employee turnover, Mr. Gannage adds. "Part of the reason people are staying is we do exciting work," he says. "There are opportunities within their current role."

Mr. Dengler says ambitious workers may find larger opportunities in small companies, especially one that's rapidly growing. At XE.com, more than 35 per cent of employees have had "significant career advancement" since they joined the company, he says.

"So, for example, a woman who started off answering phones as a customer service representative is now our marketing and SEO manager, while our customer service manager started out doing customer support," Mr. Dengler says. "And the third person who joined our company in 2000 as someone who did a little bit of everything is now executive vice president."

With so much emphasis these days on corporate culture, small companies need to be extra careful about hiring people with compatible working styles and personalities.

It's not unusual in large companies for employees to work in isolation in their offices or walled-in cubicles. But in small companies, "there's nowhere to hide," Mr. Dengler says.

"We just can't say to people who are not getting along, 'Deal with it' and then go on with our work like they might do in a large company," he says. "When you've got such a small team of people and you've got one hire who's just not working out, it can easily upset the whole dynamic and make life difficult for everyone."

To reduce the risk of hiring someone who doesn't fit, XE.com arranges prospective employees to meet with some of the people they'll be working with, if they get the job. This way, both sides get a chance to ask questions, discuss possible work scenarios and get a feel for each other's personalities.

But even with this process, XE.com has had a few workers struggle to fit over the years. In such cases, Mr. Dengler says it's important for managers to act quickly before the problem gets too big - a risk that's magnified in a small enterprise.

"We've had situations where it wasn't working out so we moved the person in another area of the company where they would not be working directly with the person they were having conflicts with," he says. "But you can imagine that, in a small company, it isn't always possible to do this and in a couple of cases, the only solution was to transition the person out of the company."

Another challenge for small companies is the perception among some workers that they can't offer job stability. Mr. Gannage at AMAPCEO says while he's never heard prospective employees ask about job security, he's aware many workers are concerned about it.

AMAPCEO can't guarantee jobs for life, Mr. Gannage says, so it introduced a severance policy that calls for six months of notice and pays two weeks worth of salary for every year of service.

"We don't lay people off but that doesn't mean it won't happen in the future, so the severance is more of an insurance policy," he says.

Since small companies don't usually have the luxury of moving under-used employees to another position, AMAPCEO has been careful not to expand its workforce too quickly, Mr. Gannage adds.

"When you're small, you have to be more precise and careful in your decisions because, when it doesn't work out, the impact is felt throughout the organization," he says.

Another challenge is that, with small companies typically occupying smaller office spaces, some employees may feel the boss is always looking over their shoulder. Even the most casual and friendliest of managers can cause a moment of nervousness as they stride past employees' desks, Mr. Gannage says.

For this reason, it's important for leaders at small companies to avoid micro-managing employees and give them a level of autonomy, he says.

"It's really just a matter of building a culture of respect," he says. "And in that regard, a small company isn't really any different from a large company."

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