5 Ways Your Business Can Keep Your Best Employees from Bolting for Bigger Companies
Losing your best employees is one of the most frustrating experiences for small and mid-size business owners.
Your invest time and energy training them. Then, they do everything right – beyond what you expected. They perform well. They treat people well. They show up. They deliver results.
And then, they leave.
When you have a well-functioning company that people love working for, the main reason your best employees leave is because of salary and benefits. But those aren’t the only reasons. And you actually have more influence on your wayward all-stars than you might realize.
Here are five ways to keep your best employees around longer.
1. Give Them More Ownership and Power
If your best employees are as great as you believe, then look for ways to demonstrate to them how much you value their presence in your business.
Put them in charge of more things. Give them decision-making power over selected tasks or departments. Let them run a meeting. Give them a project to run all on their own. Top employees usually want to be challenged. They want to do new things, learn new skills, take risks, and test their abilities.
Make them want to stay for more reasons than just money.
However, one thing to watch out for here is overloading them with too much. If you do decide to challenge your best people and use their strengths and talent in new ways, be sure not to overwork them, or you risk driving them to the exits. Remove some of their previous tasks, either temporarily or permanently, as you give them new responsibilities. Help them keep their work/life balance healthy.
2. Give Career Advancement Opportunities
If your best employees respond well when you give them new challenges, it’s time to do more than just increase their responsibilities. Give them a new job title. Show them ways they can move up in your company.
One goal nearly every business owner can aspire to is to remove themselves from the day to day tasks of running their business. The more you can focus on bigger picture strategies, organizational structures and improvements, customer or patient service operations, and things of this sort, the more your business will grow in profits. And, it will be an even better place to work than it already is.
Putting your best employees in charge, and increasing their pay as appropriate, can free you up to pursue some of these higher level goals that you’ve been wanting to work on for years but never seem to have the time for.
For newer employees, you can make it clear up front that there are advancement opportunities in your business. Be absolutely clear about those, and you will motivate your best employees to work toward a specific goal.
3. Salary Incentives for Longevity
For some businesses, career advancement opportunities are limited. But you can offer stepped up salary increases for employees who stick around. Your business math supports this.
Suppose you have a position that pays $85,000 per year. Suppose, after 2 years, you decide to increase that to $95,000. That’s an 11.7% increase – pretty steep. And pretty motivating. And what if, when they hit five years, it goes to $105,000?
Will this inflation-surpassing wage increase hurt your bottom line?
Right now, your bottom line is suffering from repeated turnover. Suppose you’re losing top employees on average once per year. If that’s you, you’re in a state of constant hiring, which is miserable, costly, and wasteful.
What if you could increase your average tenure to three years, by offering higher salaries to employees who stay longer?
In this hypothetical example, you would be paying employees $10,000 more for one year, on average, and for more years if they stick around beyond the three-year average.
Now, how much does it cost you to hire and train new employees?
That cost must be calculated in money, but also in time and resources. The time you spend hiring and training is time you can’t spend growing your business. Your profits suffer when you have to hire repeatedly.
If you’re hiring once per year, and can improve that average to once every three years, you will save thousands of dollars in costs, and increase your profits because of all the time and resources you’ll save.
In other words, by paying them more, you can actually make more money.
Yes, these are all hypothetical examples. The details matter. But the idea of tying salary to loyalty is something you should strongly consider exploring.
4. Increase Your Benefits
Besides salary, offering better benefits is the other carrot most commonly dangled by bigger companies trying to lure away your best people. Maybe you can do something about it.
Begin with office perks. Look for ways to make it more fun to be at work. Have staff parties. Give free snacks or drinks now and then (or permanently). Do catered lunches.
Next, offer employment perks. Give free gym memberships, transit stipends, or child care stipends. Some of these cost more than others. But even small benefits – when they substantially increase quality of life – play a big role in shaping a person’s preferences for where they want to work.
A Career Builder survey found that perks really matter to people and that they increase employee retention. Some of the perks employees reported wanting are really simple, like half-day Fridays and the ability to wear jeans. That doesn’t cost you a thing!
Finally, show them the money, in the form of a retirement benefits program.
If you don’t offer retirement benefits, maybe now is the time to start.
The IRS allows small businesses to set up pension plans that fit their type and size of business. These are called Simplified Employee Pensions. You can also offer SIMPLE, which is an employee match program, or Qualified plans. Learn more about these in IRS publication 560.
Another option has recently been made available with the passage of the SECURE Act, which stands for Setting Every Community Up for Retirement Enhancement.
The idea here is that small businesses don’t have the time or resources to set up 401(k) or pension plans, which are complex to initiate and manage. But if they could combine their resources with other similarly-sized businesses, the barriers would be lower.
The SECURE Act lets small and mid-size businesses pool their resources into a Multiple Employer Plan (MEP) so they can offer 401(k) and other retirement plans. This approach spreads out the risks and reduces the time you have to invest in managing the plan for your employees. These plans will be available starting 2021.
Also, regarding the SEP and SIMPLE plans mentioned earlier, the new law gives businesses up to a $5000 tax credit for setting up a qualified retirement plan.
5. Hire the Best Possible Employees – for Your Business
Some people actually want to work for smaller companies. They don’t want to work for huge corporations or massive hospitals. They like the smaller setting.
If you could just find those people, and if they became your all-star employees too, you would solve your turnover problem.
With a hiring process that specializes in finding the exact type of person you’re looking for, you can find these sorts of people by enlisting PainLess Hire as your hiring consultant.
Our hiring process can help you find the most highly qualified employees for your desired skillsets and workplace culture. And, they will also be much less likely to leave for more money elsewhere, because they don’t want to work for huge corporations. Money is not their number one motivation.
Remember, if you could stretch your average employee tenure two times, three times, or five times what it is now simply by using a more specialized and scientific hiring process, would you do it? It all depends on how desperate you are to stop losing your best and hardest-to-replace people.
PainLess Hire uses an innovative approach that is unlike anything used by traditional recruiters.
Our approach centers on skill evaluations, personality assessments, and other pre-tests that can be customized to fit the kind of people you’re looking for. Most recruiters just match keywords on resumes to job descriptions.
Plus, with our approach, you avoid all the headaches and hassles of hiring.
We handle the initial phone interviews. We place the job ads. We sort the resumes. And after studying the data from the pre-tests and interviews, we narrow down your hiring candidate list to a few top candidates – all of whom will be highly qualified. All you have to do is conduct one round of interviews. We even do the reference checks on your chosen candidate.
If you’re looking for particular personalities, work ethic, intelligence, someone who fits in your workplace culture, AND someone who wants to work for small and mid-size businesses, we can find those people for you.
Next Steps – Find Your Needle in the Haystack
By combining the intensely customized hiring process of PainLess Hire with some of the other strategies on this list, you can greatly increase the longevity of your best employees.
Your best step is to schedule a free consultation with PainLess Hire, and see how we can help you find your perfect needle in the haystack.
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