Retaining valuable employees

Retaining key employees can be a difficult task for small businesses, as more often than not they lose valuable staff to larger companies that can afford to pay them a higher salary. The idea of employee retention is also largely overlooked by many SME owners, but the truth is that if you want to generate sales and grow your company, you will need to have effective and motivated employees. According to Small Business NSW, there is a strong link between retention and company performance - happy employees are motivated, remain loyal and employees reap the rewards.

At the heart of this is having a good internal engagement and recognition program, as your business is only as good as those that work there. Here are three ways to retaining valuable employees.

 

Career progression plan

Once employees have been in their job for a few years, they want to know if there is a chance of career progression within the firm. If you don't offer new roles or increased responsibility after a staff member has been with the firm for some time, they will stop feeling challenged or motivated to do their current job. While this isn't true for everyone, for most people - particularly graduates - this is usually the point when they start looking elsewhere or are headhunted.

What you should be doing is to communicate clearly to your staff that there is a clear and logical career pathway that is adding value and responsibilities at each stage. According to employment agency Hays, career development does not necessarily mean promotions - although it can - it's as much about the job itself and the employee's ability to see a path of progress and know what they need to do to achieve it.

"For less ambitious staff, it may be relevant that they are given an opportunity to work more flexible hours for studying or be given the encouragement to take on more or different responsibilities," suggests Hays.

Small businesses shouldn't feel pressured to give their staff pay rises, but when giving credit where credit is due, SME owners can consider staggering out promotions or offering non-monetary benefits to alleviate some of the financial burden.

Rewards and recognition program

This brings us to a rewards and recognition program. Most companies have this in place but if you feel yours needs updating, perhaps it's time to introduce some new rewards for high-performing employees. This doesn't only have to include those that are meeting targets - this could be a good way to reward those who are extremely helpful, enthusiastic or exhibit positive behaviour in the workplace.

Some examples of monetary rewards are:

  • Sales commission
  • End of financial year trip for the top 5 or 10 employees
  • Gift or restaurant vouchers
  • Movie passes

If you don't have a lot of funds, you can consider these non-monetary options:

  • Personalised letter of recognition
  • Recognition in company newsletter
  • Commemorative plaque

The most important thing to ensure is that all employees get an equal chance of qualifying for the reward and that you clearly communicate this program to the whole company. Choose the winner(s) based on their performance merits and not on voting or other subjective criteria.

Workplace benefits

Workplace benefits are also important for boosting employee morale and keeping staff on board, and the good thing is that it doesn't have to cost your business too much. It can be as simple as having an 'open-door policy' where employees can approach you with company-related problems or providing a communal fruit bowl every morning. Other employers opt to be more flexible with study, personal or family leave; or buying lunch for staff at the end of each month.

Other workplace benefits that range in price and complexity include:

  • Discounted gym membership
  • Free breakfast
  • Development or information seminars
  • Subsidisation of a course or conference
  • Work from home options
  • Mentoring program
  • Casual Fridays
  • Annual leave on their birthday

It's up to you which combination of programs and incentives you want to put together, but having an equitable and attractive plan in place will definitely go a long way in building loyalty and retaining employees.

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