How to Retain Great Employees in Your Small Business

Your small business relies on engaged, self-directed, creative employees. As you enter new marketplaces and build out your products, how do you retain that superb workforce talent? Your competitors are looking for the perfect hires too—you need to engage with employees, build an open and nurturing culture, and ensure everyone feels valued.

We’ve got you. The right approach will build strong workforce relationships, create a trusted environment, and help your people to love their work. 

Let’s get into it.

You Need to Do More than Just Pay Employees Well

The starting point for attracting great talent is, of course, salary and benefits. Employees need to feel they’re properly rewarded for the effort they put in, and the paycheck, 401(K) match, and health insurance all factor into their decisions. But, the reasons employees stay with a small business is as much about the “intangibles” as a healthy bank balance.

Employees want to feel valued, that their opinions matter, and that they can share ideas in a welcoming environment. Your employee retention approach needs to tie into who you are as a business. Develop an HR strategy and employer brand that matches and strengthens your business values. 

Retention shouldn’t be reactive or an afterthought because employees are leaving—instead, it should be built into the DNA of your business and be demonstrated through shared values and workforce relationships.

“Employee job satisfaction and engagement factors are key ingredients of employee retention programs. The importance of addressing these factors is obvious, but actually doing so takes time and these tasks are often left for another day. However, the payoff of focusing on employee retention—in terms of increased performance, productivity, employee morale and quality of work, plus a reduction in both turnover and employee-related problems—is well worth the time and financial investment.” SHRM, Managing for Employee Retention

Build a Sense of Connection with Small Business Employees

When we’re talking about the intangible benefits of your workplace, we’re really discussing “connection” and “culture.” It’s important these aren’t just conceptual buzzwords—instead, they need to be part of the working environment, and touch on every aspect of “How we do things around here.” 

Retain Employees by Tying Their Job Roles and Objectives Directly to Business Success

Your small business has goals it needs to meet, and a strategy for getting there. Help employees contribute to business success by showing how their everyday actions move the business forward.

  • Turn your business strategy and goals into clear, measurable initiatives that you review and update on a regular basis.
  • Review what’s expected of every part of every job role in your small business.
  • Align each of those objectives with overall business initiatives, and make employee objectives measurable.
  • Ensure managers and supervisors review objectives and outcomes in regular meetings with employees, including how they’re helping the business as a whole.
  • Incentivize employees by creating bonus and reward schemes for meeting and exceeding their objectives.
  • Encourage and celebrate employees who are active contributors to business success. 

Retain Employees Through an Open, Listening Environment Where Feedback is Encouraged

Positive connections and culture are strengthened by listening and creating a collaborative environment that encourages open discussion. 

  • Hire managers who show they’re willing to hear and act on employee feedback.
  • Emphasize the importance of an interactive, open, friendly environment with your supervisors and employees.
  • Encourage management approaches and styles centered on collaboration between managers and their teams.
  • Create a “no blame” culture, where employees are encouraged to speak up and share concerns and ideas without fear.

Retain Employees By Demonstrating Their Opinions Matter and Taking Action

Ensuring employees are heard is only the first step in creating stronger connections—you then need to act on that feedback. 

  • Make managers accountable for collecting and reviewing feedback from employees to identify the most important ideas and issues. 
  • Give supervisors the resources and support they need to act on feedback and make changes to improve business processes and interactions.
  • Demonstrate to employees how you’re making business changes based on their feedback to encourage more openness and discussion.

Retain Employees by Providing Excellent “Quality of Life” Benefits

Employee objectives, culture, and connection are the intangibles that create a sense of belonging. A welcoming workplace also provides other flexible benefits and support for employees.

  • Encourage remote working and telecommuting, with an established approach, best practices, and technology for working from home.
  • Train employees on software so they’re familiar and comfortable with your tools. 
  • Let employees be autonomous and to plan their activities to reach objectives without being overly prescriptive.
  • Build flexible working practices that can adapt to different approaches and employee needs.
  • Offer benefits like 401(K) matching, dental and medical care, employee wellness, and profit share or stock options.

All of these benefits should be within reason and support your business goals. For example, allowing employees to be autonomous gives them a sense of control, but some members of your workforce may need more direction or coaching. It’s important to look at each employee individually, and to provide the right level of support for their strengths and weaknesses.

Retain Employees by Investing in Their Future

You’ve spent time and effort on attracting, hiring, and coaching some of the best talent out there. Keep that talent in your business by supporting their future development.

  • Create a budget for external training and encourage outside learning to help employees develop their skills and earn qualifications in important areas.
  • Identify promising employees early and give them opportunities for more responsibility through mentoring, acting up, and secondments.
  • Allow employees to take on extra responsibilities and to guide their career steps.
  • Provide a clear roadmap for how a career with your business provides financial success, professional development, fulfilling relationships, and career advancement.

Ultimately, employee retention starts with your business and HR strategy, is realized through the concrete actions you take, and is demonstrated in open feedback loops and a friendly, collaborative culture. It’s never too early to start focusing on employee retention, and to build a business workplace that you and your employees will be proud of.

Webinar: Writing a Business Plan

If you are applying for financing, a solid roadmap becomes especially important as it is the best way for a lender to get a feel for you and your business.

Disclaimer:  the information provided on this page is meant for general informational purposes only and may not reflect the most current resources and recommendations available. Please consult with your financial, tax, legal, and other relevant advisors when making decisions about your small business.