Editor’s Note: This is a guest post by Jill Phillips – a freelance writer hailing from Buffalo. Her opinions are her own.
Small businesses often feel as though their size limits their success, especially regarding their employees. In your business, you might become frustrated as your existing employees quit to take jobs with larger companies. Compounding the problem, you might feel as though you cannot offer competitive wages and benefits.
Employee turnover, however, can cost you more than offering higher pay with perks, so you should make a high priority of having an experienced loyal team. The following tips will help you get started.
Recruiting, hiring and training employees costs small businesses a lot in terms of time and money. After working for your firm, your employees gain knowledge and experience that makes them more efficient and effective while doing their job. When employees leave, you lose that expertise and then incur additional expenses as you hire and train replacements.
Poorly managed firms fail to recognize the importance of retaining top-performing workers and, therefore, incur an expensive cycle as employees come, gain experience, and then get lured away by big companies that have more to offer. As a result, some firms experience a constant cycle of hiring, training and replacing employees. Such a pattern, however, gnaws at profitability and stability costing more than the same company would spend on increased compensation.
If you manage your small business well, you can build a stable and productive team that gives you a vital competitive edge in your industry and market. Doing so also ensures that you can continuously offer improved products and services while attracting a steady stream of desirable talent as your company grows.
Rather than accepting the high cost of employee turnover, you can act now to build a stable labor force that contributes to your goals. The best available applicants might accept wage concessions as part of working for a small company, but you still need to offer salaries that are as competitive as possible. Also, job seekers and employees alike expect to have access to health and life insurance plans as well as the opportunity to participate in a retirement savings plan.
Although you might think that such benefits are off-limits to your firm because of their cost, they can actually reduce your operating expenses by increasing your employee retention rate. Simple measures such as offering custom benefit packages can help you further control the cost of employee benefits while making them more valuable to each worker.
Employees aren’t all about money, and benefits aren’t the only way you can keep your workers satisfied and loyal. The following strategies can create a fantastic work environment so that you can stay competitive and profitable. In many cases, improving your employee retention rates can be a surprisingly affordable and fulfilling experience.
1. Encourage communication and feedback
Create an environment where everyone on your team feels comfortable sharing ideas and providing feedback with you and their co-workers. Demonstrate the high priority that you plan on communication by scheduling and conducting periodic employee reviews. In between reviews, make sure that you routinely supply your staff with constructive feedback.
Set well-defined goals for your company and share them with your employees, so they understand what you want to achieve. Also, clearly describe your expectations to each team member, so they know what you expect from them and how to earn wage increases and promotions. An emphasis on communications makes employees feel important and inspires them to advance their common interests.
When you conduct one-on-one performance evaluations, find out what makes your employees happy as well as how they feel about your business. Ask them what they like and dislike about you and your company and take notes. Make sure you make each person on your team feels comfortable about reporting problems and suggesting improvements. Also, conduct routine company meetings to keep everyone informed and build a spirit of camaraderie. Use the feedback that you receive to improve your workplace and you will earn the loyalty of your team.
2. Engage your employees
Satisfied employees are usually employees that are engaged in their work and identify with their employer’s mission. Make everyone who works for your firm feel as though they are a vital to daily operations as well as to your long-term objectives. Rather than keeping your hopes, dreams and obstacles to yourself, make sure you share them with your employees, so they understand what they need to do to support their employee and prepare their future. Set a promotion policy within your company and your employees will do their jobs with an eye for the future. You should also make working interesting by occasionally giving your workers new challenges that keep their mind and spirit fresh.
3. Be flexible
You can compensate for the small size of your business by offering flexible work options such as telecommuting and flex-time. Telecommuting supplies your employees with benefits such as less time spent commuting and an improved balance between their personal and professional lives. People who work remotely enjoy reduced stress levels and eliminate some of the cost associated with working as an employee. Also, telecommuting can reduce your operating overhead while demonstrating your personal interest in the welfare of your employees.
4. Foster development
Keep your employees productive and engaged by providing them with a training and development program that maintains their skills for their present roles and prepares them for future opportunities within your firm. Through on-the-job, classroom and online training, you can equip your staff with the skills they need to excel in their roles. Employee development can also involve tuition reimbursement and other assistance for workers who pursue higher education.
Get your managers involved with coaching employees and use them to help match them to future positions. Employees who do not embrace training and development can become a drag, so do what you can to either motivate them to participate or encourage them to leave. As you do more to encourage personal and professional development within your firm, you will see employee retention increase along with morale.
5. Hire a HR professional
As your company grows, you will probably have difficulty managing your human resources without sacrificing the attention you give to other parts of your business. Boost employee retention in your organization by hiring a professional HR manager that can give employee compensation, benefits and development added attention.
A HR professional can create and oversee your company’s internal structure and processes and make sure that you comply with relevant legal and regulatory requirements. Such a person can also help you keep your firm in line with hiring trends and implement management tactics and HR strategies that you might never discover by yourself.
Small businesses often lose when they compete for a limited supply of qualified workers. In many cases, such firms believe that offering employee benefits is beyond their reach and submit to an endless and expensive hiring cycle that destroys profitability and stunts growth. Use the five tips on small business employee retention listed above to make your firm different.
Offer personalized benefit packages to attract top talent to your firm while controlling costs and then use free and open communication channels to create a low-stress and engaging workplace. Meanwhile, use the size of your firm to your advantage by giving your employees flexible work options that enhance the quality of their life. Offer your team members training, development and opportunities and promote from within to keep them personally invested in your success. Finally, as your company grows, bring a professional on board to make your company a fantastic place to work. Your retention efforts will reward you with a successful and profitable future.