According to the U.S. Bureau of Labor Statistics, three million employees have chosen to leave their jobs each month since June 2017. In an increasingly competitive business world, top talent is in high demand.
This kind of employee turnover is expensive—especially for a small business. Think of every employee you hire as an investment in your business. Only when your employees are happy and engaged can you maximize your return on that investment.
Here are six ways to increase employee retention:
1. Build a great company culture
You don’t have to have a ping pong table in the break room to have an attractive company culture. Instead, think about how your culture can match the type of people you want to employ. It’s helpful to have clearly-defined values as a small business so you can build your company culture and hiring criteria around them.
Another key factor in an attractive company culture is creating an employment value proposition that goes beyond monetary compensation. Be transparent from the start about the experiences your employees will benefit from while working with your company—then be sure you deliver.
2. Hire the right employees
When running a small business, you may feel you don’t have time to be selective about hiring. But the truth is you can’t afford to not be particular. While you may be tempted to hire fast when you’re short staffed or overburdened, it’s critical to hire the right employee for the job to save time and money in the long run.
As you’re screening and interviewing candidates, pay attention to signs that they may be a job-hopper or not a great culture fit for your business and customers. Even a part-time employee should be a solid fit for your business from the get-go.
3. Identify your employees’ passions and strengths
In a small business, garnering employee loyalty starts with helping team members feel passionate about the company and their contributions. As a manager, you should also be supportive of your employees’ career goals and creating career advancement opportunities for them. Understand their past accomplishments, ask them about their aspirations, and work together to discover how those intersect with the goals of your business.
Taking the time to draw out passions and strengths your employees may not have listed on their resumes could be beneficial to the growth of your company. You may have a sales rep with a passion for web development or an accountant with a penchant for event planning, but you might not ever find out unless you ask. Create a career development plan for your employees that will combine their strengths and passions with the needs of your business.
4. Provide guidance without micromanaging
Your small business is your passion, and more often than not, running it takes up the majority of your time. It can be hard to step back, delegate, and let go, which is why you need to hire employees you trust. While it’s important to have clear communication and expectations as a leader, you also want to empower your employees. Give them room to take the lead in their individual roles and in the business without your constant oversight.
Of course, for this to be effective, your employees need regular feedback. Use feedback as a tool for growth and recognition, with specific recommendations for further improvement and development. Build in time to check in with your employees to make sure you’re also addressing their concerns, and to ensure they’re still feeling aligned with their career development plans.
5. Offer career growth and training incentives
In addition to paying your employees well, provide incentives for their career growth. This could be in the form of a small stipend they use for taking classes, buying books, or attending professional events.
Another effective way to foster growth is through empowering your employees to learn from each other. Think back to those individual passions and strengths. Ask one of your employees to teach an in-house workshop in their area of expertise. If you have employees who are taking classes or attending conferences, encourage them to share some key takeaways with their colleagues. All of these training opportunities will enhance the attractive company culture you’ve worked hard to build.
6. Recognize and reward good work
You want your employees to feel valued, so make sure you’re giving them the recognition they deserve. This doesn’t always have to be done with a bonus or salary increase. Recognizing a job well done individually and also company-wide can be rewarding enough for employees. Try recognizing their hard work in a company-wide email or letting them take the lead on a specific, high-profile project within the business.
When employees feel undervalued and unappreciated, they start looking for opportunities elsewhere. Small businesses must focus on superb company culture, smart hiring, growth and development opportunities, plenty of freedom and incentives, and rewards for a job well done. These methods of increasing employee retention will not only save on employee turnover costs, but most importantly, create an environment where talented people become integral parts of helping your small business grow in the long-term.