High turnover of employees often presents a serious problem for many small businesses. Limited budgets generally cannot provide the financial incentives needed to recruit and retain high achievers. As a small business owner, how can you compete for qualified employees when money is an object?
Flexibility and creativity are the keys. As many small companies are discovering, retention strategies can be effective without being costly. Employees are often not motivated solely by money. They typically have a variety of personal and professional needs, goals, and interests that can be used to help attain—and retain—valuable employees.
For instance, high achievers often value intangibles, such as recognition of their value, potential for professional growth, and flexible work schedules as much as, or even more than, financial rewards. As a small business owner, you may find you have the flexibility to tailor creative approaches to meet the needs of your top performers. Here are five low-cost or no-cost retention strategies that earn high marks from employees:
Recognize Performance. With many employees, simply being recognized for their efforts goes a long way. As they say, “It’s the thought that counts.” Plaques and awards show hard workers you value their contributions. Or, for a relatively small cost, you can reward dedicated employees with such things as gift certificates to popular restaurants, tickets to the theater or sporting events, or small cash bonuses.
Provide Opportunities for Professional Growth. High achievers often need the opportunity for professional growth to maintain job satisfaction. Question key employees about their career goals. Then, try to find ways to help them further develop their skills. Perhaps you can assign an employee with management aspirations to head a project team or mentor less experienced employees. Or, you can provide on-the-job training for employees who want to expand their skills into new areas.
Offer Flexible Work Schedules. Work/life conflicts are at the root of much employee turnover. Employees with child or elder care responsibilities may be forced to seek employment elsewhere if you cannot accommodate their needs. For many companies, an easy and inexpensive solution is to offer flexible work arrangements, such as part-time or flexible schedules, or opportunities to work remote.
Expand Retirement Savings Options. Many employees, concerned about their financial futures, increasingly value company retirement savings plans. There are now more choices than ever before for selecting an employee retirement plan. Profit-sharing, Savings Incentive Match Plans for Employees (SIMPLE), and Simplified Employee Pension (SEP) plans are options that can fit a small company budget and also meet employees’ needs. By instituting a plan that vests over several years, you also create an incentive for employees to remain with your company for the long term.
Enhance Medical Benefits. Health insurance is one of the most highly valued employee benefits. Unfortunately, this is also one of the most expensive benefits for small employers to offer. If you are unable to subsidize all, or a portion, of your employees’ health insurance costs, consider offering Health Savings Accounts (HSAs) or Flexible Spending Accounts (FSAs). These mechanisms allow your employees to use tax-deductible dollars to fund their future health care expenses. However, keep in mind that both HSAs and FSAs have strict rules and restrictions that should be explored with a qualified professional.
Cultivating Your Small Business “Edge”
When it comes to developing effective retention strategies, why not optimize your small business “edge”? Small companies often have the flexibility to develop creative approaches that are tailor-made for their employees. To discover what motivates your workforce, consider conducting an informal survey. Gaining insight into your employees’ needs and preferences can help you reduce turnover and compete effectively for top talent.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any insurance product or individual security. To determine which insurance product(s) or investment(s) may be appropriate for you, consult your financial professional prior to purchasing or investing.
This article was prepared by Liberty Publishing, Inc.
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