A company’s employees are its greatest asset, so keeping workers happy and maximizing retention should be a priority for any business. Employee retention is a challenge for many small businesses, in part because workers today are constantly on the lookout for new career opportunities. According to the Harvard Business Review, 69% of workers are either actively looking for a job or are open to new career opportunities.
Employee turnover is a costly problem: in the case of highly skilled workers, turnover can cost a business 213% of that employee’s salary, according to a study by the Center for American Progress. To successfully retain employees, it’s important that you offer growth opportunities, reward good work, and ensure team members understand how their work contributes to your company’s goals.
How to Retain Employees
Building a positive work environment and offering perks that employees value can keep your workers happy and productive. Here are seven practical tips to help your company improve employee retention:
1. Hire the right people
A successful employee retention strategy starts with hiring the right people. Make sure you hire workers who have relevant job skills and the right personality to fit in with your company culture. It’s also crucial that your business has a proper employee on-boarding program, to ensure staff members are trained to perform their work safely and competently. Your team needs to have the right knowledge and skills to represent your business to its customers.
2. Offer more responsibility
Allowing an employee to take on more responsibility demonstrates that you trust them and value their contributions. Take the time to speak with each of your employees about their career goals, so that you can offer them opportunities for growth when they become available. Make a point of hiring from within, and offer promotions to workers when they’re earned.
3. Give recognition
Tell employees when they’ve done a good job on a project, and explain how their work contributes to the overall success of the business. A study from the University of Alberta found that employees who were able to see the meaning and purpose of their work showed a 60% drop in absenteeism, and a 75% reduction in turnover.
4. Provide training and guidance
Investing in your employees’ professional development benefits your workers and your business. Ongoing training also helps employees stay motivated and build skills that can help them in their career development. By providing ongoing training, you ensure employees are always learning new skills that can benefit your company and its customers. Consider informal training as well, such as a company mentorship program, or take the initiative to provide individual guidance to employees to help them grow.
5. Consider revenue sharing
While employee happiness isn’t completely tied to salary, offering your employees monetary incentives can help them feel valued. If it makes sense for your business, consider adopting a revenue-sharing model, where a portion of a worker’s earnings are tied to business performance. By doing so, your employees’ interests can align more closely with your business goals. Your workers will also be more motivated to stay with the company and help drive its growth.
6. Be flexible with time off
Employees value work-life balance, and offering them additional time off or allowing for flexibility in their schedules can be an in-demand perk that helps attract and retain talent. Offer extra vacation time if possible, and give sufficient time off for illness, medical appointments and more. Offering flexible work hours is also a great benefit for employees. If an employee responds to an emergency customer call at 8pm one night, allow them to start late or leave early another day.
7. Ask for employee feedback
Rather than guessing what motivates your employees, ask for their input. If you run a smaller business, talk to your employees one on one to see what your company can do to improve workplace morale and employee retention. If your business is large enough that individual conversations aren’t possible, send out a detailed employee survey soliciting feedback.
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