August 2023 - Striven

How to Retain Great Employees: Five Tips for Small Business Owners

Are you a small business owner trying to understand how to retain great employees? Well, it’s not a secret that bad employees may harm a company’s growth, while great workers often drive exceptional results and help businesses thrive.

Despite this fact being obvious, many business owners still face the same challenge of retaining and motivating the right talent. Besides impacting the bottom line directly, losing efficient workers has another crucial downside: the cost and time it takes to replace them. Hiring top-talented employees is already difficult enough, and letting them go because of inefficient business processes and culture shouldn’t be an option.

There are many ways to retain high-level talent, but you need to think outside the box and adapt to market changes. In this article, you’ll explore five steps that you should follow to retain talent and help your business grow with their assistance.

The Challenge of Retaining Talent

Looking in the reviewer mirror, movements like The Great Resignation and Quiet Quitting that emerged in the past few years have put pressure on employers.

As workers have reassessed working conditions and decided they want to get more out of their personal and professional lives, small businesses are trying to reinvent themselves to provide more flexible experiences, diverse workplaces, and ongoing opportunities for professional development to attract and retain great employees.

According to the research “The Megaphone of Main Street: Employee Engagement”, published by Score, the main challenge for 60.7% of respondents is hiring the right talent, while for 33% of them, the greatest difficulty is retaining and motivating employees.

For these small business owners who participated in the study, the primary reasons for disengaged professionals are wages and healthcare benefits. These respondents also said that unhappy and less engaged employees cause:

  • Loss of productivity, according to 41.7% of the respondents
  • Loss of new sales, according to 22.8% of the respondents
  • Loss of clients due to lack of service, according to 18.9% of the respondents

Over time, all these factors reflect on the business growth and morale.

It’s worth noting that increasing wages isn’t the only solution. Employees also want to work in environments that foster a positive work culture, offer professional development opportunities, and leverage flexible work options. These elements, in turn, have a positive impact on small businesses’ bottom line.

How to Retain Great Employees and Help Your Business Thrive

Some businesses are facing a talent shortage worldwide, and the low unemployment rates in the UK and US reflect why some workers are demanding higher wages and more benefits. On top of that, there is a broad skills gap in many areas, especially in the technology field, which requires offering training to professionals in order for them to update skills related to working with machines and AI. The scenario doesn’t seem promising.

However, if you want to know how to retain great employees and keep them motivated, you can start adopting some obvious and not-so-obvious options, such as:

  • Offering higher wages
  • Improving the work culture
  • Providing professional development and training
  • Sharing profits quarterly or annually
  • Offering bonuses based on certain criteria, such as overall performance
  • Implementing small perks, such as a day off on birthdays
  • Creating a career progression program
  • Elaborating DEI policies and programs

To optimize your efforts and results, you may talk directly to employees through a Stay Interview to gather feedback, understand their needs, and take action. Sometimes it won’t be feasible to meet all their needs, but improving something as a result of the feedback can get you started on this process and show them you’re committed to valuing their work.

Below, you’ll explore five tips to help you retain and motivate your staff.

1. Offer Flexibility

Providing flexibility allows employees to balance their personal and professional lives, which can boost productivity and improve results. When they have the freedom to attend medical appointments, go to the gym, and take care of their children at their own pace, for instance, the quality of work tends to improve, benefiting everyone involved, including you. In general, you can:

  • Offer flexible hours or flexible days
  • Implement a program in which employees can choose the hours they work
  • Test the 4-day workweek
  • Allow the staff to work remotely

Besides being appealing to workers in different industries, this flexibility often doesn’t cost much money, or anything at all. In some cases, remote work can even help businesses save money. Other advantages for you:

  • It increases employee satisfaction.
  • It helps the staff become more productive
  • It assists in saving money on space and furniture
  • It improves client satisfaction due to the improved work quality

In short, offering flexible work schedules and remote work options is a great ally in retaining talent. I mean, who likes to spend hours stuck in traffic?

2. Create a Career Pathing Plan

Visualizing one’s own career growth within the company is a great tool to motivate employees. The reason is simple: they know they have room to grow professionally and earn more.

Besides being great for retaining employees, having a career pathing plan in place helps businesses rely on a well-structured process that facilitates transitioning from one position to a higher one in the hierarchy or from one level to a higher one in the same job, in case you don’t have many management positions at your company.

In this scenario, you could promote workers based on skills, for instance, until they reach senior positions. If an employee holds a junior quality analyst position and develops new skills, they could simply be promoted to an intermediate position with better pay.

3. Nurture a Positive Corporate Culture

Part of your staff may be composed of Millennials and Generation Z workers. Understanding this is crucial for retaining talent. And why is this important?

Depending on different generations, your current corporate culture may be actually toxic instead of professional. Do you or the company’s managers yell at employees, point fingers when someone does something wrong, or lack an efficient communication system? These factors may discourage employees and make them feel like they’re being constantly attacked by their superiors.

Overall, nurturing a positive corporate culture encompasses many aspects of a business’s daily routine. Let’s see two examples below.

Creating efficient processes and working with efficient tools

If your employees can get things done faster with the help of software, for instance, you should commit to offering the best technologies they can use. In general, it’s possible to:

  • Implement a system that assists in managing the business, such as an ERP.
  • Provide software to manage client relationships, such as a CRM.
  • Use a system to simplify invoicing.
  • Utilize an email marketing software.

Embracing diversity, equity, and inclusion (DEI)

For some workers, an attractive workplace embraces diversity, equity, and inclusion through DEI policies and programs. Nowadays, employees don’t want to work in environments where coworkers feel free to make comments or behave in ways that disrespect groups of people.

Sexism, racism, homophobia, and xenophobia, among other issues, should have a zero-tolerance policy in your company. Besides the legal issues tied to them, they’re harmful and non-inclusive. Embracing and appreciating diversity, equity, and inclusion also helps you retain young talent and create a brand that truly respects all customers.

If this is a new topic for you and your business, talk to the Human Resources staff to develop a program to adjust the culture and foster a more positive workplace.

4. Develop an Attractive Employee Benefits Program

For small businesses, offering higher wages translates to higher costs, which may significantly impact their survival. While a company should always strive to recognize its employees’ efforts and reflect this in higher pay whenever possible, it must also consider the current resources available.

Before creating an employee benefits program, consider these elements:

  • Health
  • Finances
  • Wellness through work-life balance
  • Professional growth and development
  • Diversity, equity, and inclusion

The ideal benefits package should offer a combination of these categories. Of course, there are mandatory benefits that you must provide to employees, such as family and medical leave, health insurance, unemployment insurance, and workers’ compensation. However, the optional benefits are what actually matter when it comes to retaining great talent.

As mentioned in the previous topic, your current workforce may consist of Millennials and Generation Z employees. Overall, they may be interested in benefits that address college debts, for instance. In this case, the company could include in its benefits package the option of paying a percentage of this debt while workers are employed.

Offering time off is another benefit that may lead to higher retention rates and goes beyond higher wages and expensive incentives. As an example, you could offer one whole day off every two weeks or a day off on birthdays.

These benefits improve workers’ professional and personal lives by enhancing their health and well-being. In turn, employers benefit from the boost in workers’ productivity and job satisfaction.

5. Train the Management Staff

Last but not least, train your management staff. All the efforts discussed earlier could go to waste if the managers don’t treat people with respect or overwhelm them to the point where employee burnout becomes a reality in your company.

It’s crucial to provide proper training for company leaders to manage their teams successfully. Good managers not only help to retain great employees but also guide them toward effective leadership.

If managers demonstrate toxic behavior, chances are that the employee retention rate will never reach the desired results. To tackle this issue, consider providing training to current managers or replacing them if the efforts for improvement don’t work out as expected.

Reinforcing positive behaviors in the workplace is a task that small business owners should prioritize. By doing so, it becomes easier to handle conflict, respect individuals, and achieve results that enhance the company’s bottom line.

Now that you know how to retain great employees, you can work closely with the HR department to develop attractive solutions.