Owning a small business is precarious. There are so many factors that contribute towards your success, and retaining your best employees in one of the most important.
Employee turnover can be devastating for a small business. It can cost anywhere between 6 - 9 months’ worth of salary every time an employee leaves. Luckily though, there are ways you can encourage your employees to stick around longer.
It goes beyond paying well and paying on time. Making your employees feel valued and engaged is key. If an employee is valued and appreciated, not only will they be more likely to stay, but they will be more productive too.
Reasons for High Turnover
To understand how to best keep your employees, it’s important to understand why they leave in the first place. Some things can’t be prevented; moving away or changes in personal commitments, for example. These things happen. However, there are other factors that can be better managed.
For instance, one of the main reasons people leave is if there are very small, or no, increases in wages over time. Essentially, if you don’t pay a competitive wage, people will leave. It's as simple as that.
Issues with management is a big factor too. That can mean any number of things, from disrespectful speech and actions to being unsupportive or being ineffective communicators. As the owner, these are things you will need to work on. If you struggle with managing people, there are courses you can take to improve.
Other common causes include issues with coworkers and being overworked. Making sure you have the right team is vital for retention. If your group does not get along then you will see it in your turnover numbers. Burnout is very real, and it is usually the result of unrealistic workloads being placed on workers. Make sure that you are always taking stock of the workload you place on your team.
What You Can Do
Now that you know the most common reasons employees leave, you can now work on keeping them. Of course, with a small business, you may have a smaller budget to work with to achieve some of these things. However, small business owners are known for their ingenuity, and it’s important to remember that it is an investment in your success.
- Make sure that your team are always motivated. This is about more than speeches and platitudes about working together and achieving goals. It could just be simple things like free lunch prizes, going home early on certain days as a surprise, and having theme outfit days. Making the workplace more enjoyable and comfortable will keep your team better motivated and keep them working for you.
- Benefits are important as well. Make sure that if you offer a benefits package it has lots of choices so that your employees can choose one that works best for them. Those benefits can include formal medical and other traditional benefits, but they can also include perks. Good perks are things like helping with tuition for education and providing a lot of training opportunities to learn new skills.
- Promote from within to give your employees something to strive for. If they feel that they have no opportunities to advance, then many will move on. Ongoing and effective communication may be the most important factor. If your employees always know what is expected of them and where they stand, they will be much more comfortable at work. Express your expectations and the goals of your business regularly.
- Communication can go both ways. Keep an open-door policy and encourage feedback. You never know when an employee will have an amazing idea or suggestion that can take your business to new heights. Different points of view and ways of thinking are extremely valuable.
Develop Your Strategy
It’s a good idea to keep track of your retention rate. In general, you want your rate to be at least 85%. Tracking your rate will allow you to better develop a strategy to improve it. To develop that strategy, first, evaluate your performance on some of the points discussed above. Talk to your staff and ask them questions about their goals and expectations of you. Are you meeting them? Where might you improve?
The fact is, your business will benefit from having an engaged, energetic, and committed team working towards a common goal. By working on the factors that boost retention, you will not only keep them, but you will also keep them happy and motivated.