Affordable Ways for Small Businesses to Retain Employees

Small businesses face unique challenges that larger organizations are often immune to due to working with limited resources and budgets. One such problem is retaining employees. Constant turnover is bad for any company, but it is particularly detrimental to small businesses because of the cost associated with replacing employees. It’s been reported that hiring a replacement can cost an employer 33 percent of the annual salary for the position. With that in mind, it’s not unreasonable to say employee retention is even more critical for small businesses. But how can you limit turnover without the funds to outbid larger companies for talent? Consider the following key points.

Hire the right cultural fits – The easiest way to ensure employees stay with your company is to hire the right people in the first place. When screening potential job candidates, don’t make the mistake of just looking for those that are highly qualified. In addition to them being qualified, you must hire people who are a good fit for your company and its work environment. Hiring cultural fits will help reduce employee turnover. Define what type of persona would be your ideal hire (say, an ambitious, easygoing extrovert) to help determine which candidate fits the bill during interviews.

Provide opportunities to grow – Few employees want to remain in the same role for the rest of their careers. Younger professionals, in particular, tend to have ambitious long-term goals and a burning desire to grow professionally. Not affording your employees the ability to do so will stifle these desires and cause them to become bored in their roles, which will lead to them moving on to somewhere they can flourish. Prevent this from happening by providing workers opportunities to learn new skills and grow within your company. Cross-training, helping employees learn new skills, and promoting from within are great ways to facilitate this.

Offer flexibility – Something particularly common in younger employees is a desire for flexibility. Clinging to the old-fashioned approach of working from the office for a solid eight hours is shortsighted and counter to how millennials want to spend their careers. To make your workplace more desirable to younger employees and increase retention, don’t be so restrictive when it comes to strict working hours or telecommuting. Trust your employees to manage their schedules and workloads, and let them prove you wrong.

Don’t ignore traditional perks – Companies sometimes think so far outside the box when it comes to what they offer employees that they overlook what is perhaps most important of all to them. While modern employees have different priorities than previous generations, traditional perks, such as a competitive salary, quality but affordable health insurance, and a retirement plan, are still a big deal to them. These perks may not necessarily be ‘affordable,’ but they’re cheaper in the long run than the cost of constantly recruiting, hiring, and training new employees to replace those you lose because you don’t offer these basic, yet essential, perks.

To reduce employee turnover, employers need to take into consideration who would be a good fit for their workplace and what is important to the modern professional. Armed with this understanding, you’ll be better positioned to hire people who will thrive working for you and remain a part of the team for years to come.