Employees are by far your most valuable asset and retaining them can lead to greater profitability. In fact, research has shown that by focusing on engagement, a business can see over 20% higher profitability. But there are several challenges that small business owners face, such as:
- Lack of flexibility
- Unclear career development
- Not feeling recognized
- Double-duty employees – these are employees who care for others, like children or elderly parents.
Fortunately, there are several actions that you can take to help improve your employee engagement.
Career conversations – Oftentimes, these are limited to annual reviews. Instead, explore having more ad hoc discussions throughout the year.
Transparency – Generously share and often. This is especially useful when the company experiences missteps and all too often holds back on offering details, which can create a culture that breeds a lack of transparency. Use this as an opportunity to engage employees as they may have solutions that you had not even considered because you are too emotionally immersed in the issues at hand.
Professional development – The 2022 LinkedIn Global Talent Trends Report found that employees believe professional development is the number-one way to improve company culture. Deloitte found that organizations with a strong learning culture are 92% more likely to develop novel products and processes, 52% more productive, 56% more likely to be the first to market with their products and services, and 17% more profitable than their peers. Their engagement and retention rates are also 30–50% higher.
Continuing Education – Tuition reimbursement programs, on-the-job collaborative learning, access to external courses are all ways to not only help retain your employees by investing in their learning, but also can yield ideas for new products and services or operational efficiencies.
Student-Loan Assistance – Professionals in their 20s, 30s and 40s need help paying down their student loan debt, so an alternative to continuing education could be helping to pay off a portion of their loans. A nice perk for the business owner is a tax exemption up to $5,250 for 2023.
Progress updates – Examples include sharing that you’re ahead of your sales plan or that you are having difficulty collecting overdue balances and welcome ideas.
Recognition – Simply, make your employees feel valued. Talk to them frequently and tell them that you appreciate them.
Embrace flexible work schedule– The pandemic gave employees a taste of remote work and many have rethought their ideal employment situation. Accommodating these employees through remote, or hybrid arrangement can be the difference in keeping them from jumping ship.
Employee events – Small businesses have a unique culture as every employee knows one another, so having time out of the workplace can be especially beneficial to building interpersonal relationships. Events allow employees to feel more inclusive and have something fun to look forward to several times throughout the year.
Employee ownership – Offering equity can be a particularly potent way of retaining your top employees. For small businesses, this can be done in a variety of ways including buying company stock, stock appreciation rights (SARs), profit-sharing, and equity bonuses. Regardless of which option you choose, a shareholder agreement is recommended.