Unable to offer expansive benefits packages, small businesses are disproportionately affected by high turnover rates. Up your employee retention this year.
It’s no surprise to small business owners that there are special challenges they face that larger or more established companies don’t. But did you know that small businesses face greater employee retention issues than bigger businesses?
Employers with fewer than 1,000 employees tend to see a significantly higher turnover rate than even those with 1,000-5,000 employees. The same goes when compared to businesses with 5,000 or more employees, largely because small businesses simply can’t match the hefty salaries and robust benefits that larger, more established companies can offer.
As an example of this disparity, we have some quitting stats below. According to the Bureau of Labor Statistics, between January and August of 2018:
- Small businesses (10-50 employees) lost an average of 2.8% of their workforce
- Midsize businesses (1,000-5,000 employees) lost 2.1% of their workforce
- Large businesses (5,000+ employees) lost less than 1% of their workforce
As smart small business owners know, employee turnover comes with a cost. It’s cheaper to maintain the employees you have than it is to recruit, hire, and train new people. If you’re looking to get ahead of the curve and make your small business stand out as one where employees stay for the long haul, here are a few tips and tricks to follow to make you more successful in your employee retention pursuits.
Offer career development as an employee retention strategy
If you can’t offer the highest salary around or match your employees’ 401(k) contributions because of your company’s size, start to think outside of the box when it comes to what you can offer. Smaller salaries typically work for people in earlier stages of their careers and what are younger employees looking for most? Career development.
Offering career development can take many forms, from giving employees a budget to use for conferences or classes to building mentorship into your company culture. Online webinars are a great resource to point employees to—they offer all of the benefits of a conference without all of the travel costs that can make in-person conferences cost prohibitive.
Boost employee retention by giving candidates a personalized hiring experience
The hiring process is a new employee’s first glimpse into what working for your company will be like. If you’re focusing on treating your employees as well as possible, make sure that shines through in the hiring process. Any email that an employee sends should be promptly responded to. The hiring process should give candidates a chance to meet the team and manager they will actually be working with. If you can, take a candidate out for coffee during a late stage interview.
If you’re able to let your awesome company culture show from the very beginning, chances are candidates will already be hooked from the get-go, especially because younger generations (you remember, the ones who will likely be the most ok with lower salaries to start) care more about happiness at work than generations before.
Invest in human resources in the beginning
While HR is an element that many small businesses put off as long as possible, investing in it up front can make a major difference when it comes to employee retention. Not only can some HR help make sure that you follow laws throughout your hiring process, but having a resource dedicated to your employees shows candidates that you’re invested in the satisfaction of your employees.
Flexibility is an employee retention must
While larger, more established companies can often offer more money and benefits, there’s one thing that their size limits and that’s flexibility. Whether you’ve hired new parents who prioritize a flexible work environment or your company is located in a city that has horrendous rush hour traffic that a flexible schedule can alleviate, a little flexibility goes a long way. For some people—especially younger generations again—having the ability to work from home when necessary is more important than a higher salary, so why not offer it?