Whether you've started recruiting or have a team in place, finding ways to retain employees goes a long way toward maintaining smooth operations and boosting your bottom line.
Most of the time, you may look outward at strengthening customer relationships. But all professional relationships take effort, and understanding your employees' perspectives can provide valuable lessons on retaining employees and reducing employee turnover.
An experienced, loyal team conveys a strong message to potential hires and customers alike. It will also make your job easier when can count on others.
Missing the boat on retaining employees
Inherently, you understand the benefits of retaining good employees. However, it's easy to overlook some consequences if you fail to value and reward your employees.
For example, replacing those you've recruited and hired may be the easiest expense to grasp when an employee leaves. It's estimated that replacing an employee can cost one-half to two times the employee’s annual salary. That’s a lot for a small business to absorb.
On the not-so-obvious side, an aggrieved employee could take to social media and cook up some scathing reviews on what it's like to work at your organization. Aside from potentially chasing away future hires, that’s not the kind of social media advertising you want to create.
Why employee loyalty matters
We know from our own experience that we become more productive when engaged with our work. Same with your best employees: an engaged employee is likely a more productive employee.
Satisfied team members are more apt to build stronger customer relationships, leading to increased sales.
Yet, a recent Gallup poll revealed that only 36% of U.S. employees are engaged in their work and workplace. Engagement and loyalty matter because they can affect other organizational outcomes such as profitability, productivity, customer service, retention, safety and overall wellbeing.
Assuming everything is okay with your employees is a risky move. It's difficult to improve on perks, benefits or working conditions if you have no idea how your employees view them in the first place.
How to retain employees: 9 ways to cultivate loyalty
There are some tried-and-true methods when you're searching for ways to improve job satisfaction and improve employee retention rates. Here are some incentives for employees that help them stay in the fold.
1. Listen and take action
The first step to building loyalty and retaining workers — and maybe the most important one — is to listen to employee feedback.
According to Forbes, highly engaged employees are three times more likely to say they feel heard at their workplace (92%) than highly disengaged employees (just 30%).
But listening isn’t enough. If employees feel that their concerns are going in one ear and coming out the other, they won’t be satisfied.
Taking their feedback and implementing good ideas shows employees that they are valued. Even if you're unable to take action, being transparent and discussing why you cannot implement change demonstrates that you take their feedback seriously.
2. Lead by example
To lead by example means guiding others through your behavior. That is, your employees want to see you “walk the walk and talk.”
For example, if you want to build a company culture of encouragement and resilience, you have to model that to your employees by offering support and finding solutions instead of berating someone who’s made a mistake.
Leading by example can help boost employee morale, build trust, foster a positive work culture and increase productivity.
3. Allow employees to take ownership of their work
Part of retaining employees and improving employee engagement is having them feel proud of their hard work and accomplishments.
Give them appropriate responsibilities and challenges to solve. Including them in decision-making processes helps create ownership. This helps employees feel they have buy-in and a stake in their work, which adds value to the employee experience.
4. Offer competitive pay
While money isn’t everything, it’s a pretty big deal. With rising inflation hitting both you and your employees simultaneously, everyone is looking for ways to stretch their dollars and make a little more money.
Employees talk to others in their industry and probably have a good feel for what competitors pay in wages or salaries. Understanding market rates and offering them competitive wages will give you a leg up on enhancing loyalty.
Furthermore, annual reviews and the opportunity for raises, bonuses, wage adjustments and promotions will let employees know that this job offers growth opportunities.
5. Support through benefits and insurance
While you may not offer a comprehensive employee benefits package right now, as you grow, you may want to offer various benefits to help employees protect their financial and physical well-being.
Employee benefits can help you attract top talent and help keep cherished employees in their seats.
You can get creative with your benefits. While you may not offer full healthcare or dental insurance, you might offer monthly health stipends to use for gym memberships or fitness classes. You might also look into helping employees set up a flexible spending account (FSA).
Or you can think up ways to strengthen state requirements for parental leave by offering a meal stipend or partnering with local daycares for small discounts.
You should also consider getting workers’ compensation insurance, even if it isn’t required in your state. If your employee is injured while on the job, workers' comp acts as a safety net by helping cover medical expenses, wage replacements and other costs.
6. Create clean and safe work environments
The old saying “better safe than sorry” still rings true today. You can help retain employees by providing clean and safe working conditions, regardless of your industry.
Start by training your employees so they can work safely. For instance, if your industry requires using safety equipment like goggles or lifting belts, make sure employees use them. Or, if you work in environments with fires, chemicals or other safety hazards, make sure your employees know how to respond to accidents.
Even in less hazardous environments such as offices, you’ll want to ensure workspaces are well-lit, clear of clutter and that phone or computer cords are secured to prevent trip hazards. You might also help employees with an ergonomic desk setup to reduce neck or back pain.
Get more workplace safety tips here.
7. Support development opportunities
As a small business owner, you can work with your employees more closely than some managers at larger corporations. Talk to your employees about what they’re interested in and their aspirations.
Through these conversations, you may find opportunities for them to contribute that may be different from their daily responsibilities or provide mentorship opportunities. You could consider allowing them to work on tasks you typically handle or projects you don't have time to develop further.
You can also support their professional development by helping them pay for training or certification fees. For example, if someone in your restaurant is interested in getting their food handler license or becoming a certified food manager, you could consider helping them pay for the training and giving them flexible hours to study or take an exam.
By introducing new skills to your workers while allowing them to hone existing skills, you can support career development and even help them build a career path while reducing attrition.
8. Flexible working policies
Even pre-pandemic, nearly one-third of workers have sought a new job because their current workplace didn't offer flexible work opportunities. The demand for remote work and flexibility has only grown with more employers adjusting their policies.
Depending on your employees' type of work, you may want to help your team build work schedules that fit their lifestyles. This could mean using software and apps to make it easier to switch shifts or offering 4-day workweeks.
It’s also important to encourage a good work-life balance for employees as burnout factors majorly in high turnover.
9. Be generous with recognition
A big motivator for employees is being acknowledged and recognized for their work. According to SurveyMonkey, 63% of employees who feel recognized are unlikely to look for a new job, making employee recognition a large factor in employee satisfaction and turnover rates.
Recognition doesn’t have to be costly or big gestures. It can be a shoutout at a team meeting or a thank you and a word of encouragement when they're dealing with something difficult. It could be recognizing a milestone or work anniversaries, a bonus for meeting a goal or celebratory lunches and gifts.
Employee recognition can reinforce certain behaviors or activities that result in better performance and positive results. It can also help you build a stronger, more inclusive workplace culture when employees feel valued and appreciated.
NEXT Insurance can help you and your employees thrive
Building employee loyalty begins before a new employee ever sets foot in your door as a new hire. Keeping employees engaged begins as soon as a recruit says yes to an offer and hopefully ends many years down the road after a successful and satisfying career.
Small business insurance can help you protect your business and employees, whether they're just getting started or have been with you for years.
NEXT is 100% online. You can get a quote, review options, buy coverage and get instant access to your certificate of insurance in less than 10 minutes.