Employee Retention: 7 Strategies for Small Business Owners

Peninsula Team

October 28 2020

Finding the right person for the job is not easy. When you do succeed in getting employees who are the right fit for the role and your office culture, it is important that you take steps to hold on to them.

Employee turnovers are costly irrespective of the size of your business. Besides losing a talented employee to competition, you also spend your time, money and resources recruiting, training and onboarding their replacement.

Here are 7 employee retention strategies we recommend you follow:

Offer competitive salary and benefits

The top reason why people change jobs is for better pay. Make sure you are not under-paying your staff. Offer salary and benefits at par with industry standards. In the long term, it will be cheaper to offer a competitive pay package to retain talent than to keep recruiting and training new staff due to a high employee turnover.

Ensure transparency in hiring

Invest in the recruiting process to look for candidates with the right skills and temperament for the job. Make your expectations and job duties clear during the interview itself. Candidates most suited to the role are also more likely to stay longer. A poor hiring decision or lack of proper communication during recruitment may cost you more when the employee quits, or you have to let them go.

If this happens too frequently, it can also affect the morale of other employees.

Create a healthy work environment

While salary does matters, the working environment is also a major reason why people leave or stay with a company. A workplace where employees are treated fairly and with respect will attract workers who enjoy their work and value their employer. Here are some ways you can create a positive working atmosphere:

  • Encourage a work-life balance
    Be realistic about the workload and deadlines that you set for your staff. They should not be neglecting their health or personal life due to work. Overworked employees are at a greater risk of burning out, being stressed and being less productive. They are also more likely to view their work and workplace negatively.
  • Train managers on soft skills
    People don't quit jobs, they quit bosses. The often-quoted saying is true. Bad supervisors can create low morale and demotivate the best of workers. At times it is not even a temperament issue but rather one of not having acquired the necessary people management skills. You will benefit by training your managers in crisis management, stress and conflict management, and how to be effective leaders.
  • Don’t indulge in favouritism
    Create a merit-based reward system and set the same rules for everyone. While it is natural that you may get along better with some people than others, it is unprofessional to play favourites at work. Nothing creates more bitterness and resentment in a team than when some workers get preferential treatment.   

Conduct annual performance reviews

While it is good to check-in with your staff on a regular basis, annual performance reviews are very important. Use the annual appraisals to get feedback from your staff, discuss their goals and future with the company. This may help you offer them opportunities for growth and training in line with their goals. Employees are more likely to stay with a company that is invested in their career.

Provide opportunities for growth

Opportunities for career advancement, or the lack of it, is also a reason why employees may look to switch jobs or feel demotivated. Through workshops, trainings or flexible work hours (to make part-time studies possible), you can help your staff improve and update their skills.  

You could also mentor your employees to take on new roles within the company and promote from within when looking to fill vacancies.

Recognize and reward good work

Make your employees feel appreciated by acknowledging their hard work. Mentor them through constructive feedback and give them ownership of their projects. You could provide performance-based incentives, such as bonuses, flexible work hours and — for those who may need it — the option of working from home. Organizing work socials and holding contests around holidays with rewards, such as gift cards, is another way to keep employees motivated at work.

Get professional HR support for your small business

Irrespective of whether you manage a staff of five or 50, professional HR support will bring structure to your workplace and make employee management easier.

You could either hire an internal HR team for this purpose or get a lawyer to draft your contracts and policies. But both these options are going to be expensive.

When you outsource your HR management to an advisor like Peninsula, our experts take care of all your HR issues and documentation. We have a team of HR consultants available 24/7 to answer all your queries.   

We will help you streamline your processes, update policies and ensure you are compliant with labour laws and protected from litigation.

Our low-cost membership plan makes our services affordable for businesses of any size. You can access Peninsula’s support at a fraction of the cost of hiring an internal HR team or employment lawyer.

Do you need help with HR management?

For advice on HR and health and safety policies, call an expert at 1 (888) 247-3652.

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