There are many compelling reasons for small business owners to try to retain their current employees, for example:
- The cost for replacing an entry-level employee can be prohibitive/expensive.
- Ongoing employee turnover serves as a drain on a small business's time and productivity.
- Retaining high-performing employees is one of the best competitive advantages your business can have in today's workplace.
So what are some of the most effective ways to retain employees?
Seven strategies for small business owners:
1. Offer a competitive benefits package. It's generally considered a “must have”—you can hardly expect to hire and retain quality employees unless you offer a competitive benefits package that includes health insurance, life insurance and perhaps even some sort of retirement savings plan.
2. Provide attractive perks. Businesses that see successful employee retention may be those that acknowledge employees have lives outside the company. Theses employers provide significant workplace perks such as flexible work schedules, telecommuting options, reasonable sick leave policies, and vacation time. Smaller perks play can play a role in employee retention as well, including variations on "Free Bagel Friday" and an occasional all-staff lunch paid for by the company.
3. Share in the business's financial success. Since top-performing employees contribute to the business's overall success, shouldn't they be permitted to share in the financial rewards as well? Consider rewarding workers with an annual raise and also consider issuing stock options or similar rewards. This approach can encourage employee commitment to your revenue and profit objectives, as well as a financial incentive to "stick around" as the business grows.
4. Promote from within. A good employee generally wishes to advance his or her career within the company. Limited internal opportunities may discourage these employees from staying. Consider opportunities to promote from within in your efforts to inspire others on the team to work towards the same goal.
5. Give employees a meaningful work-related challenge. Doing the same things over and over again can be a workplace morale-buster. Your employees deserve the chance to try something new and more challenging as part of their responsibilities. Plus, your business may benefit from applying their knowledge and experience to new job duties. Look for opportunities to challenge your workers wherever you can.
6. Recognize high-performing employees. Everyone likes to be recognized for their contributions, but all too often small business owners fail to take the time to do so. It can start with a simple "thank you" for a job well done up to publicly acknowledging an employee's role in a successful business initiative. Also, consider sponsoring contests to help employees maintain focus and strive for greater productivity.
7. Learn why employees stay with your business. Most companies conduct "exit interviews" with departing employees. Why not occasionally talk with your most valued workers and find out why they choose to stay? The answers they provide—about management styles , working conditions, maybe even things they'd like to see improved—can help you refine a more effective employee retention strategy for the rest of the workforce.
Small businesses invest time and resources in technology, operations and other resources in order to grow. But small business success can be extremely difficult without a similar commitment to retaining the best of their employees. Learn more about combining tangible and intangible benefits for retaining top employees here.