How to keep your best employees from leaving

High employee turnover is one of the insidious problems plaguing small businesses all over the world. Replacing employees is a very time-consuming and costly activity. Think about the direct costs of recruiting and training new staff, the opportunity cost as a key position remains open, and how it hurts the morale and productivity of the remaining employees. According to a 2019 research from Gallup, replacing just one individual can cost one-half to two times the employee’s annual salary.

There are various reasons why employees voluntarily leave their jobs. These range from desiring higher compensation, looking for career advancement, not feeling valued, inflexible work schedules, burnout from being overworked, and lack of clear direction from management.

Focusing on employee retention is, therefore, important for any successful business. High employee retention rates usually translate to increased performance and productivity, better employee morale, and improved quality of work. Through focusing on employee retention, businesses retain talented and motivated employees who truly want to be part of the company and are focused on contributing to its overall success.

All these beg the question, how can you increase employee retention rates in your business? Here are some of the most effective strategies:

It starts with recruitment

Right from when you interview and recruit new team members, you should be thinking about employee retention. Start by identifying aspects of your company culture and strategy that you want to emphasise and seek candidates that are best suited for those aspects.

While sifting through resumes, look out for candidates who have had longevity at their previous jobs. Having worked at a company for many years, through ups and downs, speaks of the individual’s loyalty, perseverance and engagement. Additionally, take a look at their hobbies and volunteer activities. People who play team sports or consistently give their time and skills to charity have the mindset to commit to something they care about.

But that doesn’t mean you should completely dismiss candidates who appear to be job-hoppers. If you ask the right questions during the interview process, you will be able to determine if they’re a good fit for your company. Some might just be looking for the right place to land. Make sure that the candidate is interested in growing with your company, rather than getting the experience to take somewhere else.

Provide clear growth opportunities

One of the top reasons why employees quit their jobs is lack of a clear path of career advancement and growth within the company. Growth opportunities include promotions and investing in employee training and education advancement.

Promoting from within gives employees a clear path of advancement and opens up the opportunity for greater responsibilities and compensation. It also communicates to employees that they are valued, their contributions are recognised, and they play an important part in the company’s success.

Don’t forget that promotions should go hand-in-hand with employee development and education. This may mean offering corporate training to equip staff with new skills or update their existing skills, or offering partial of full tuition reimbursement for external courses. As a company that is focused on employee advancement, you don’t have to wait for periodic learning events of workshops to train employees. Instead, you should integrate learning in every project or task. Encourage your employees to learn through doing and asking questions when they have a challenge.

While employee education is expensive, it is definitely worth it for your company. Other than improving your retention rates, the employees will use their skills to be more effective in their roles – which ultimately translates to higher work quality and profits for your business.

Pay well and offer benefits

In today’s competitive labour market, it is important to offer attractive compensation packages. Research what the standard rates for certain positions in your industry are and consider what you can afford to pay. During the interview process, ask the candidates about their previous salary and current salary expectations to figure out compensation that is satisfactory.

Don’t forget that part of offering a competitive compensation package is giving employees extra employment benefits. Work benefits such as health insurance, paid sick leave, flexible work schedules, and health club memberships are attractive incentives that might convince employees to remain loyal to your company. 

Small business owners might feel that they don’t have enough resources to offer attractive employee benefits. But bear in mind that incentives don’t have to be financial in nature. Simply letting your employees have more flexible work schedules and ability to work from home might boost employee morale and retention significantly.

Many quit because of bad bosses

Research has shown that many people quit their jobs because of bad bosses. Therefore, don’t take yourself too seriously or employ individuals who are too aggressive and bossy in managerial roles. To have a good idea of your work environment and employee satisfaction, make time to connect with your employees whenever you can. You don’t have to wait for the annual performance review to offer employees performance feedback and give them guidance on how they can be more effective in their roles. Toxic work environment is a big reason that you might lose key employees. Focus on creating a safe, inclusive, and positive work environment where each employee feels secure and happy. This starts with creating open communication between employees and management. This opens channels for feedback and sharing ideas and concerns. Your employees should also feel confident that they will be listened to and that you will take appropriate action to make for a better working environment.