4 Ways To Keep Employee Retention High In The Age Of Low Unemployment
Author: Mike Kappel
The unemployment rate has been staggeringly low throughout the past year. And although this is excellent news for workers and our economy, it might not be the best news for your small business.
With such a low unemployment rate, workers have options. Employees can quickly bounce from job to job, raising your turnover rate and impacting your bottom line. How can you keep employee retention high during this time of unemployment (and beyond)?
4 Ways To Increase Employee Retention
I’ve talked about how to reduce employee turnoverbefore. But now that jobs are so readily available to workers, it’s time to up your game even more.
As you likely know, losing and replacing employees is expensive and time-consuming. Not to mention, the low unemployment rate means top talent is already employed, which can mean two things for your business:
- You might have trouble readily finding qualified applicants to replace terminated employees.
- When top talent is already employed, you have to worry about other businesses trying to recruit youremployees.
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Use these tips to create an employee retention strategy that resonates with your workers, improves engagement, and keeps them from seeking other positions.
1. Onboard New Hires
Onboarding is a make or break time for employees. Done well, onboarding can increase your employee retention rate. Done poorly, onboarding can result in employees quitting within six months of starting.
Your employer goals during the onboarding process should be to tell employees about your business, show them the ropes to successfully do their jobs, answer questions, and introduce them to your current staff.
If employees are significantly confused about how to do their jobs after onboarding, you could have problems down the road. They could become frustrated with the lack of communication, leading to disengagement.
2. Develop A Relationship Of Mutual Respect
What’s the number one reason employees move on to a new job? Although people heavily debate this question, some research suggests people quit their bosses, not the jobs themselves.
There are many reasons employees leave that have nothing to do with their bosses. But if you do not develop a relationship of mutual respect with your workers, you could be pushing them out the door.
At my company, Patriot Software, I work alongside my employees and stay late. I work in an office where my door is always open. When I hire employees, I train them, then give them authority over their responsibilities. I look at employees as my co-workers and family. I tell them “thank you” at the end of their shifts. With these seemingly simple acts and attitudes, I promote mutual respect.
Barking orders and yelling at employees when they mess up (or even if they do something differently than you would have) isn’t the way to show you respect them as talented workers. And, it certainly isn’t the way to gain their respect.
When employees respect you and know they have your respect, the likelihood of them leaving “because of their boss” decreases. And, mutual respect also increases employee loyalty toward your small business.
3. Engage Employees
People get bored. It’s human nature. And when they get bored, they might start looking at greener grass to reignite their engagement.
It’s not your job to be an entertainer to your employees. But with the right attitude, leadership, and strategy, you can create a naturally engaging culture.
Engage employees by pointing them in the right direction. Help them see that their work matters to your business and customers. The more an employee can connect their work with making a difference, the more engaged they’ll be.
How do you engage employees? Try setting business-wide and team goals. Not only will this give employees something to work toward, but it could boost camaraderie, which also increases engagement. At my company, I encourage teams to set and reach goals. My employees pull their weight when working on the projects, and they are excited to achieve their goals.
Another way to encourage employee engagement is to give them ownership over their jobs. That’s why I refuse to micromanage my employees. How can an employee genuinely engage with a job if you always tell them what to do and how to do it? Not only does micromanaging discourage engagement, but it also hinders innovation. If you micromanage your employees, they might start looking for a job with more freedom.
Lastly, engage employees by encouraging development. Regularly train employees, give them leadership roles, add new responsibilities, and offer educational assistance. When appropriate, promote employees. If you are unable to promote, you can try instituting a job rotation program, which lets employees make lateral moves into different positions.
4. Offer What Other Businesses Can’t
One of the biggest mistakes I see small businesses make is trying to be something they aren’t. I’m sure you’ve seen it, too. Or, maybe you’ve even made this mistake! Whether they try to grow too fast, add unrelated offerings, or get too far away from their roots, small businesses can dig themselves into a rut if they focus on keeping up with bigger firms.
The same is true with retaining employees. Sure, big corporations can likely afford to give higher salaries, bigger bonuses, and better insurance benefits. Although it’s crucial to offer a fair compensation package, you shouldn’t try to spend more than what you can afford. Instead, offer what other businesses can’t.
Benefits like job flexibility can be inexpensive to offer. At the same time, they are in high demand. If it works for your business, let employees work from home, work flexible hours, and take time off. But, offering job flexibility might not set you too far apart from other businesses.
According to the Bureau of Labor Statistics, 77% of employees receive paid vacation days, and 71% receive paid sick leave. And, 70% of employees worldwide work remotely at least once per week. So, what else can you offer that other businesses can’t?
Many working individuals prefer to be big fish in a little pond rather than little fish in a big pond—and your small business can deliver just that.
In your small business, you can give employees more leadership. According to one study, 86% of small business employees reported that their opinions were heard and listened to.
Lastly, if you want to keep retention high during this time of low unemployment, capitalize on what can truly set your small business apart—treat your employees like family. Thirty-two percent of small business employees said feeling like family was the best part of working for a small company.
Although I’m an entrepreneur and not an employee, I can attest that the familial feeling in my companies is one of the best parts of my job. And based on what some of my employees have told me, it’s one of the reasons they stick around in the age of low unemployment.