In Spring 2021, a big number of U.S. employees said goodbye to their employers in what is now called the Great Resignation. As a result, there has been an increase in employee demand and intense competition in the labor market.
Small businesses are especially affected as more employees leave their jobs for more flexible hours, career development, and better compensation than their employers can provide. For small businesses, high employee turnover is costly because of the expenses associated with hiring new employees.
In addition, any employees that leave the workplace can negatively impact the workplace operations and culture. While small business operators are often tasked with multitasking, there is no doubt that attracting and retaining the right employees has significant benefits.
In this article, we explore various attraction and retention methods that small businesses can use to prevent high employee turnover.
Enforcing a Positive Work Culture
Employees should enjoy coming to work. It boosts team morale and reflects in their customer service. A positive work culture also encourages employees to excel in their performance and not to be afraid of making mistakes.
Small business owners can create a positive work culture by clearly outlining employee expectations and giving consistent and fair feedback.
Offer the Going-Rates for The Job
While small businesses often have tight budgets compared to big corporations, it is important for employers to pay their employees fair wages. If, for instance, you operate a small restaurant and the average hourly rates for waiters in your location are $12.50 an hour, offering $8 an hour will not attract top talent.
Any employees you successfully employ at lower rates are also more likely to leave once they find better-paying jobs.
Matching the going rate ensures you have a chance to attract talented staff and retain them. If you are a small business owner looking for employees, consider visiting local job boards and checking similar jobs to compare current rates.
Employees in the modern labor market expect some benefits from their employers. As a small business owner, offering strong benefits programs increases your chances of hiring and retaining top talent.
The Bureau of Labor Statistics lists some common benefits that small business owners can offer their employees including:
- Health insurance
- Identity -theft protection
- Childcare benefits
- Financial planning resources
- Fitness and healthy lifestyle incentives
- Retirement benefits
- Student loan repayment benefits
- Home office incentives for employees working remotely
- Dental and vision insurance
- Life insurance
- Leave benefits
- Commuting assistance, and more.
If your small businesses cannot afford to offer most of these, consider offering benefits that would help your employees the most. Remember to include the benefits you can offer on the job descriptions before you send them out.
Focus on Employee Development
Many small businesses are facing the challenge of skill gaps. As a small business owner, you might have a difficult time hiring employees who can effectively utilize technology. These gaps can also extend to communication skills.
Most business owners solve this problem by hiring new staff with the desired skills overlooking existing staff who can be trained to bridge these gaps.
We recommend focusing on individualized learning by offering mentorship, microlearning workshops, paying for specific certifications, or even providing resources to guide employees on career planning.
Learning and development not only equip employees with valuable skills but also help employers retain their workers. Employees are also more likely to stay at a job if the organization continuously contributes to their career path.
Provide Flexible Schedules
As a result of the pandemic, more employees have found a balance between their work and home lives. More employers facilitated working from home which increased productivity as a result of employees avoiding the daily commute.
Businesses that adapt and recognize that employees now prefer flexible schedules that allow them to provide care to their kids and elderly are more likely to attract and retain their staff. Employees also make significant savings on childcare which makes them more likely to stay at your firm.
Depending on your business model, consider the degree of flexibility you can offer your employees and communicate your willingness to make reasonable accommodations. This attracts strong candidates who are committed to the organization.
Conduct Exit Interviews
If you notice a high turnover rate, consider implementing an exit interview to find the problem. Pay attention to any trends such as a supervisor’s behavior, lack of benefits, insufficient salaries, or negative work culture. Resolving the issue makes it easier for you to retain future employees.
Is Your Small Business Experiencing High Employee Turnover?
The Bureau of Labor Statistics projects that unemployment is currently at its lowest in 17 years. Jobseekers are now choosier reducing the pool of talent for small businesses to draw employees.
For small businesses, hiring employees is expensive and time-consuming. Most business owners do not even realize how big an expense it is because there is no single bill for turnover. However, there are costs associated with making job advertisements and the time it takes to recruit, interview, and train new employees.
Employee turnover is also disruptive to the work culture and can affect team spirit which translates to poor customer service and lower sales. We recommend encouraging regular feedback from your employees to open conversations that will be beneficial in resolving employee problems and reducing turnover.
As you implement the above methods to attract and retain top talent in your business, consider other factors such as employee burnout. Provide your workers with the resources and support they need such as access to counseling, mental health days, or even flexible hours.