One of the biggest goals of any small business owner is to hire talented, motivated employees and, perhaps even more importantly, keep them on board as the business grows. So, whether it’s one employee leaving – or it feels like a revolving door of employees these days – there are some strategies that can help retain your most valuable asset—your people.
Even losing just one employee a year is making a significant direct and indirect financial impact on your company. Replacing an employee in a mid-range position (earning between $30 – $50K) averages about 20 percent of their annual salary (so $6,000 to $10,000), according to a study by the Center for American Progress. Costs to replace someone who is more experienced or educated can cost more than double their annual salary, so an executive making $100,000 will cost you $213,000 to replace. There is also the impact on other employee’s morale that ripples through the company.
Here are five of the best strategies (besides begging) to help stop employees from jumping ship.
Are you paying your employees what they are truly worth? Would a raise do the trick to keep a key employee—everyone loves more money. Sometimes a change in title is enough.
If you want to keep your best workers, sometimes you have to put up a fight. The opponent? Other companies in your line of work that would be thrilled to poach an employee who already knows the industry and has inside knowledge of key companies that you have wooed in the past.
The best way to keep your employees is to, therefore, know, unequivocally, that the grass isn’t greener when it comes to your competitor’s compensation plans. The tricky part, however, is figuring out what they offer.
The HR professionals at a Professional Employer Organization (PEO) can do an assessment of your industry and your geographical location and compare it across the board to help you create a compensation package that is not only competitive for today but is structured in a way that it will grow with the employee to keep them engaged and interested for the long term.
Echoing those same sentiments regarding the compensation package, you cannot discount the effect that a competitive perks package can convey. When it comes to benefits such as health, dental, vision, and retirement investments, you cannot underestimate the importance of these offerings. Employees number one concern is caring for their families, making sure they are healthy with a secure financial future. If you can help them do this, it is a big deal to them.
As a business owner, it is much easier to offer a comprehensive plan that takes the financial burden off your employees than it is to be constantly on the hunt for your next employee because you lose someone to a competitor over benefits. Think of the time and money you’d save not constantly hiring and training—that makes the better plan worth it in the long run.
A PEO can get you a broader range of benefits at a price that you could never secure on your own, meaning that your employees will have access to the types of benefits that they’ve always dreamed of without you sacrificing your bottom line.
You can further sweeten the deal by being able to work in some of those non-monetary benefits, such as offering flex time and work from home opportunities, which are highly valued by employees but don’t require a big upfront investment from you.
Give Them Room to Grow
It may seem backward to say, but you’re more likely to retain an employee if you’re upfront from the very beginning about where and how fast they can move up the corporate ladder.
In doing this, folks stay motivated over the long run since they have a clearer idea of their career pathway and how they will contribute to the company as a whole.
Now, admittedly, it’s sometimes hard to know how someone’s role could evolve over time. But, if you’re hiring the employees that match your company’s core values and mission and not just to get a seat filled, it’s far easier to fill a need, no matter the job in question.
To accomplish this goal, you need to make sure that you are crafting the right type of job description to attract the kind of candidates that will help shape your business.
Another best practice is to do some strategizing on the back end in terms of how the career ladder at your company will work and how folks can climb the rungs to keep them engaged and motivated to stay because they can see a clear path for advancement.
Get on the Training Train
If you expect to promote from within – which will almost certainly keep folks engaged and motivated to do well – then you’ll need to provide the training necessary for these employees to be able to move up the ranks.
In providing training to employees, you show that you are invested in their future – you want them to learn new skills, to keep up with industry trends, and to be able to do their jobs more effectively and efficiently. Further, in challenging these employees, you stave off boredom and allow your workers to take on additional responsibilities, both of which boost retention.
What do you do to show your employees are appreciated? Simply remembering to say thank you can go a long way towards building rapport, but in order to reach everyone, you’ll need to alter your strategy accordingly. Some folks need it shouted from the rooftops, or at least mentioned in a staff newsletter or at the next meeting. Some workers want you to record it and base your annual review and salary bump accordingly, and others like instant gratification in the form of perks.
Appreciation can also be as simple as a pizza Friday, bagels and pastries once a month, or a random day where employees can leave a little early. These aren’t very costly, but the benefits last a long time and lets employees know you don’t take their efforts for granted.