With small-business employment growing faster than mid- and large-sized companies' workforces, business owners will have to meet the challenge of not only recruiting more workers, but also retaining their top talent. Addressing the rise in employee turnover has become the biggest priority for many small businesses because of the risk of losing their best workers to an increasingly competitive job market.
The job market for the small business sector is consistently growing, which not only changes the number of people on payroll, but also companies' compensation management strategies and other operations. In February 2015 alone, small businesses added 94,000 jobs out of the 212,000 total jobs generated in the nation, according to the ADP small business report.
Here are ways to develop a small business retention program:
As small businesses grow, they will have to find the right balance of sufficiently paying their employees and putting enough money back into the business. For their small business retention programs, business owners will have to consider whether workers' pay levels are enough to keep staff satisfied in the midst of greater job market competition. A 2013 study by the Society of Human Resource Management found compensation is the No. 1 factor for employee job satisfaction, surpassing other factors like job security and opportunities to use skills and abilities. Companies should consider the value their employees bring to the company and their competitors' pay levels for staff's similar experience and skills.
Offer Recognition and Rewards
One of the reasons why small-business workers may leave a company is lack of recognition for their accomplishments. When workers feel they are not valued, they may choose to apply to new jobs. Small businesses should have a recognition and reward plan as part of their retention program that allows them to celebrate employees' achievements. This is essential to raising employee job satisfaction and reducing turnover. Since small businesses may have fewer resources for reward and recognition programs, they could still offer small or noncash incentives for a job well done, including highlighting workers in a company-wide email or giving them a gift card to their favorite store, according to Inc. magazine.
Provide Training and Learning Opportunities
Another way to show employees the company cares about them is through developing their skills and abilities via training and learning opportunities. The SHRM survey revealed 40 percent of workers believed job-specific training was very important for job satisfaction. By encouraging employees to meet their professional goals, companies can not only increase staff job satisfaction but also improve their workers' skills to help sustain business growth for the long run.
Improve Manager-Worker Relationships and Feedback
Since small-business workers spend a large amount of their time at work, positive relationships with their management could enhance their engagement with the job and the company. Owners could look into cultivating good relationships between workers and their managers through giving employees consistent and frequent feedback that aims to address their weaknesses and play up their strengths.