Great employees are the lifeblood of any small business. However, as the job market accelerates, even happy workers may be tempted to explore whether the grass is greener at another company.
Losing employees is a concern for most small businesses, not least because of the cost: a study from the Center for American Progress estimated that replacing an employee costs, on average, 20 percent of the employee’s annual salary. So if a worker making $50,000 a year quits, you’ll pay roughly $10,000 to cover the lost productivity costs and then recruit and train someone new.
“At a small business, everyone is that much more important; you’re a bigger piece of the pie,” says Dawn Fay, New York-based district president for staffing firm Robert Half. “There’s the cost of losing someone, but you also run the risk of losing other employees or burning people out as they carry a larger workload, which can affect your client service and product and ultimately impact your revenue.”
For small companies, keeping the right people in the right seats is paramount. Here are five ways to improve your employee retention and ensure your best and brightest stick around.
1. Hire well
Small business owners often have little background in staffing an operation, then one day they find themselves overwhelmed with work. They feel as if they are on a sinking ship and they’re ready to grab for any flotation device thrown their way.
Why not hire smart instead of fast? Start thinking early about writing job descriptions for your first hires. What kind of people would you be looking for? What would they do? Armed with that information, you’ll be able to make smart decisions and avoid costly and painful hiring mistakes. Maintain that same approach as you continue to add people to your team.
2. Stay competitive and get creative
Small business owners can’t toss money at candidates like a Google or Apple, however they can offer other incentives. By virtue of your smaller size you can be more flexible. You can adjust hours and allow for telecommuting to fit your employees’ lifestyle and family requirements.
Leveraging non-medical benefits such as dental, vision and life insurance can also make you an employer known for your ability to retain top talent. This kind of reputation, by the way, is extremely valuable when you need to recruit for key positions. Word will get around in your industry and community that you’re a great small business to work for.
3. Acknowledge achievements
Let’s be honest with each other, many of us aren’t the best at expressing our gratitude or acknowledging the contributions our employees make, and a once-a-year employee recognition dinner doesn’t cut it.
If you need to put “express gratitude” on your daily “to-do” list – do it! It will make a big difference in your team. You can turn good employees into brand evangelists. And here’s a little secret: you’ll feel better about yourself as well. Studies show that having a thankful attitude is one of the biggest contributors to a sense of well being.
4. Create connections
The days of faceless employees toiling on an unrelenting assembly line are gone in our society. Today, most businesses – big and small – are service providers. This means that employees need to work together in teams for the benefit of your clients.
These teams function much better when the individuals know one another and can relate on a personal level. It’s also helpful when they understand one another’s duties and responsibilities. If you have teams of people who get along and know what each other needs to accomplish, they become more efficient and they are able to take greater pleasure from what they accomplish.
5. Listen to your employees
In every setting – whether it’s social or professional – the primary reason relationships sour is a lack of communication. Unfortunately, most people think that when they’re talking they’re communicating. Honestly, when we talk too much it’s just like leaving the television on in a room with no one watching the program; people tune you out. The critical – and usually overlooked – part of communicating is tuning others in!
It’s often said that you have two ears and one mouth, so use them in that proportion. Further, understand that listening is an acquired skill. Most people don’t really listen while others are speaking, they’re already thinking about what they are going to say next. So slow down. Take time to actually hear and understand what your employees are telling you. If you don’t get it, ask questions and get your employees to explain.
Striving to understand the people who you’re in contact with may be the most powerful way to say that you care and value them. When those people work for you, it shows that you’re willing to invest in them.
I hope you’ve found some areas where you can improve as I’ve outlined these five secrets for retaining good employees. Look over your benefits package, review the way you approach hiring and then brush up on all the personal skills required to create loyalty, enthusiasm and efficiency among your employees.
Special Note: I know that this isn’t all there is to say on the subject. What questions do you have? Or do you secrets of your own that have helped you retain great employees? I’m doing a Podcast with MetLife in June 29 and your input would be great to have.