3 Ways to Improve Employee Retention in Your Small Business
Every small business faces the challenge of finding the right talent to fill a position and getting that individual up-to-speed and productive within a reasonable amount of time. Suffering with a low retention rate only compounds that challenge.
If your company’s retention rate is low, it could mean there is an underlying problem in one or more of the following areas:
- Recruiting and hiring process
- Compensation/benefits package
- Company culture
Evaluating and resolving every one of these is a large undertaking. Plenty of resources exist to help in these areas, including a number of past articles right here on Blogtrepeneur.com.
Fortunately, there are some simple strategies you can implement to improve employee retention in your small business, even as you begin working on those bigger fixes. Here are three tips to consider today:
1. Improving the new hire orientation process
While large corporations will generally have a set, documented process in place for new-hire orientation and training, smaller businesses often take a less formal approach.
That’s acceptable in theory, as small businesses have the luxury of being able to form tighter-knit teams where everyone has direct access to leadership and more experienced employees, and can often get one-on-one help as they learn their new responsibilities and acclimate to the company culture.
But taking the step to formalize and document the process, even if it’s very simple, can accomplish several valuable things:
- It will give a newly hired team member specific goals and expectations during a period when they are eager for guidance and a sense of achievement.
- It will give you and/or whoever in your company is tasked with the hiring and training process a set gauge against which to evaluate how each new employee is performing.
- It will provide a structure within which many different team members can be assigned to assist the new hire as a scheduled part of their responsibilities for a few weeks. This increases the whole team’s engagement with the new employee and ensures that taking the time to help them learn and succeed isn’t going to negatively impact everyone else’s workflow.
So, if you don’t yet have a documented and strategic new hire orientation and training process in place, that could be a great first step in boosting your company’s employee retention rate.
2. Enhance and advertise your compensation package
While a high pay rate and impressive benefits certainly factor into the ability of a company to recruit top talent and keep them around, it’s surprisingly not the most important factor. In fact, many studies over the years have shown that employees will accept a lower salary than they could get elsewhere if they strongly approve of their company’s culture, scheduling policies, and other components of their overall experience.
That being said, however, compensation and benefits must be considered if your retention rate is chronically low.
In a small business, it’s often not possible to offer the very highest salaries and benefits packages because of the economy of scale that comes into play in larger corporations. While your company should always make an effort to keep your base pay rates relatively competitive, there are other enhancements you can and should focus on that can offer high returns in terms of employee satisfaction and retention without endangering the company financially.
Here are some examples:
- Educate your employees about what’s available – Whatever level of benefits you’re able to offer your employees, make sure they’re fully aware of how to get the most out of them so they can appreciate the full value of what they have. In many cases, insurance programs can be very complicated and your employees may be failing to take advantage of aspects of their benefits simply because they don’t understand how to use them.
- Explore alternatives to company-offered benefits that can enhance the package – While it may not possible for the company to invest in a higher level of coverage or offer new riders on the current plans, there are many programs available from third-party vendors that can enhance your established benefits package and meet specific employee needs. For example, most small business benefits packages can’t include fully-covered dental insurance. However, educating your team on insurance alternatives like a discount dental program can help them obtain needed care for a reasonable cost.
- Entertain suggestions and make reasonable changes – Often, employees’ input regarding potential benefits and other company policies that affect their job satisfaction can bring to light ideas you’ve never considered before. As a small business, you will generally have more flexibility than your larger competitors when it comes to things like schedules, time off, and other perks that can help employees enhance their own work/life balance. These kinds of benefits make a difference – while costing you little or nothing to implement.
3. Capitalize on your small size
As already touched on, one of the key advantages a small business has over larger companies is their small size and the associated ability to change more quickly and to focus on drawing the team together more effectively.
Be creative and elicit your team’s input when determining what you can do to capitalize on this advantage for your employees. Some suggestions to help get the conversation going include:
- Discuss initiating or expanding telecommuting options for interested employees
- Institute a weekly or monthly social outing for the whole team to get to know each other outside of work. (This doesn’t need to be expensive or complicated. Just a happy hour on Friday evenings or a Monday morning Starbuck’s date.)
- Add small but fun perks to the office environment.
- Include the whole team in brainstorming sessions involving company strategy, major client decisions, and other large-scale conversations.
While it may not be possible for your small business to offer the highest level of pay to every employee, there are many other options available to help boost your employee retention rate. Be sure to keep the entire team involved and take full advantage of the benefits being a small, nimble business affords you.
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