Studies have shown that salary isn’t the only perk that keeps employees satisfied with their jobs.
The numbers don’t lie: retaining a great employee is crucial for small businesses.
Employee turnover costs are estimated to be 33% of an employee’s annual salary. For example, if an employee makes $55,000 annually and leaves, it will cost about $18,150 to hire a replacement. That’s not including the expense of training and onboarding the new employee, plus the hidden costs of time, effort and the risk of being short-staffed while you look for a replacement.
Keeping your employees happy is profitable for your business and good for your bottom line. Happy workers mean happy customers, as well as better job performance and more sales. Here are some simple ways to keep your employees and your business thriving.
Provide good feedback
Feedback is critical to keeping your team engaged with their work. Research shows that “79% of people who quit their jobs cite ‘lack of appreciation’ as their reason for leaving.” At a small business where the day is often full of activity, taking the time to give feedback often falls through the cracks.
Of course, giving critical, constructive feedback is important if you’re offering training or trying to improve someone’s performance. But research also shows that positive feedback can go a long way; and it’s not just as straightforward as saying “good job!” once in a while. Give concrete, direct feedback when you see someone going above and beyond to do a great job. Make it timely, focused on effort, and personalized to that specific employee. Using compliments in this structure encourages your best employees to be happy and productive.
Lastly, feedback is a two-way street. Be open to listening to your employees’ thoughts and needs. “Employees that don’t feel comfortable giving upward feedback are 16% less likely to stay at their companies,” according to research by TINYpulse.
Small businesses may not be able to compete with bigger companies on salary, but there are plenty of other benefits to working for a small business.
Hire the right person from the get-go
When working for a small business, attitude is everything. Merchants ask their employees to wear many hats; from customer service to marketing and sales, employees at a small business have to be multi-talented and able to think on their feet. As a result, finding someone with the right soft skills who is up for the challenge is a good predictor of long-term success. Happy employees are those who are set up for success and capable of doing the job you ask them to do.
Offer the right combination of benefits and perks
Small businesses may not be able to compete with bigger companies on salary, but there are plenty of other benefits to working for a small business. Flexible hours, professional development and paid time off are just a few perks that some employees value more than a big paycheck.
[Read more: The Best Employee Benefits for Keeping Workers Happy]
“Employees who rate their work-life balance highly are 10% more likely to stay at their company,” say the experts at TINYPulse. Flexible hours and a good paid leave policy go a long way to improving worker morale, as well as managing employee burnout. If your team is too lean to offer time off, make sure you’re investing in your team’s careers. LinkedIn’s 2018 Workforce Learning report discovered that 93% of employees would stay with a company longer if it offered opportunities to further their careers.
Make the workday fun and rewarding
Gamification is one way to keep your employees engaged throughout the day, and is used by businesses large and small. Offering prizes, contests and other incentives for a job well done can help your employees feel more enthusiastic about interacting with customers, restocking inventory or cleaning up after a busy shift. Gamification works particularly well if you have onboarding or training you require your employees to complete regularly.