Employee turnover can be costly, not only in terms of money but in time. You invest all that effort into training a promising new employee only to have to start over when he or she leaves. The cycle of onboarding and retraining can distract you from other aspects of running your business. Employee turnover can present problems for any business, but the effect on your small business can be worse because you have fewer resources to draw from in the first place.
Employee retention takes some effort on your part but is much better for your long-term business goals. Here are some strategies for better retention that you can put to good use.
1. Seek Advice From Other Business Owners
Rather than trying to reinvent the wheel, you can look to the example of other entrepreneurs who have had success with employee retention strategies. Seek out small business advice from others who have had success in this regard, whether in your own industry or another one. If you feel uncomfortable asking for advice, then research what successful entrepreneurs have had to say about retention in newspapers and trade magazines, whether online or print.
2. Set Clear Expectations
Most employees want to do a good job, but if you do not communicate your expectations clearly to them, they have no benchmarks against which to measure their work. When employees do not have a clear set of expectations to work toward, they feel lost, self-conscious, and hesitant. They also feel frustrated because it seems like they have not been given the tools needed to complete the task set for them. Over time, this frustration and lack of confidence, both in themselves and the management, can cause these workers to seek new employment. You can prevent this by setting clear, attainable goals for employees and measurable benchmarks for success so that they know exactly where they stand at all times.
3. Reward Good Work
If your employees stay with you and perform good work on a consistent basis, you should show your appreciation by offering some type of reward. This can be something tangible, such as a prize or a bonus, or something intangible but no less desirable, such as time away from work or special privileges. You can offer this as an incentive so that employees will want to put in the time and effort to earn their reward. Remember that it doesn't have to be something large or elaborate, so choose something that will fit within your budget.
4. Show Appreciation
Many business owners, both large and small, make the mistake of assuming that a paycheck is sufficient motivation for employees to do their best. Nevertheless, research shows that most employees are more motivated by recognition of the effort that they put in. Simple praise for a good job or encouragement when you know your employees are working especially hard on a project costs you absolutely nothing but can save you money by increasing productivity and job satisfaction and potentially decreasing turnover. Employees are more likely to develop loyalty to and stay with a company that values the unique gifts that each has to offer.
5. Be Flexible
Another way to show that you appreciate your employees is to demonstrate an understanding that they have lives outside of work. Occasionally, everyone gets sick, has an unavoidable appointment, or experiences a family emergency. The more flexibility you can provide to employees in situations such as these, the more grateful they will be and the more willing to do their best upon coming back to work. Set reasonable, well-delineated boundaries for your flexibility so that employees do not take advantage of you. Whenever possible, be flexible in a way that also benefits you, e.g., allowing an employee to work from home when sick rather than taking the day off.
Filling a vacant role can take more than a month and cost more than $4,000. Given the investment of money and time required, it makes much more economic sense to devote your resources toward retaining the employees you have.