Staff retention: six ways to make people want to stay
Employees are an SME’s most valuable asset – and happy staff are more productive and stay with companies for longer. We explore the tried-and-tested ways to build a business people love to work for.
When it comes to factors that affect the day-to-day running of a business, one in four senior decision makers are most concerned about staff loyalty, according to a survey of over 500 chief executives, managing directors and senior managers by AXA PPP. The survey also revealed that staff retention was the biggest worry for 29% of decision makers – nearly double the proportion that was most concerned about long-term sickness.
Finding ways to make employees want to stay in your company is good business sense, not least because it costs on average £28,436 to replace an employee. So here are six practical steps SME owners can take to improve staff retention.
1. Have an onboarding strategy
It’s estimated that one third of new hires leave their role within six months of joining, usually because they feel unsupported and unwelcome. Alison King, founder and director of Bespoke HR, often hears this complaint when conducting exit interviews on behalf of clients.
“Having an onboarding strategy is essential if you want your staff to feel motivated from their very first day,” says King. “Little gestures, like treating them to lunch, are a nice way to welcome a new starter and can give them a chance to get to know their colleagues in an informal setting.”
2. Communicate your vision from the outset
Working at an early-stage start-up or SME can be exciting but intense. Employees may find themselves putting in long hours for no extra pay and limited benefits. Staff turnover can be high as a result.
“Start-ups are usually led by visionary entrepreneurs who have a clear mission and a relentless drive to achieve their goals. This creates a culture that’s unlike most companies. It can end up being a challenging environment for even the most talented and experienced people,” says Nicholas Sherratt, co-founder and MD of fintech start-up Mojo Mortgages.
Sherratt says it’s crucial business owners communicate their vision from the outset, so employees know whether they’re a good cultural fit.
“Also, trust your employees to deliver. If allowed to work with autonomy, they will feel empowered,” he adds. “This allows the business to be agile and you to make quick decisions – two fundamental aspects for start-up growth.”
3. Show respect
Beanbags, breakout areas and free snacks can be par for the course at new and young companies. However, while they’re nice perks to have, they don’t guarantee that employees are going to stick around.
“Trust your employees to deliver. If allowed to work with autonomy, they will feel empowered”
Nicholas Sherratt, co-founder and MD, Mojo Mortgages
“Employees want to be respected as much as they are rewarded,” says King. “Sit down with them, find out what drives them, what type of work they want to do in the future, and be sure to demonstrate how they can advance in your company. Defined career paths are a great retention tool.”
4. Invest in personal development
Employees want to feel significant, according to Mark Loftus, founder and CEO of management consultancy CharacterScope. They also want to feel like their contribution is making a difference and that they are competent.
In order for employees to feel this, Loftus says, their personal development needs to be actively invested in. This could be through upskilling or sending them on training courses – so, for example, they become certified in using certain software and are given more responsibilities.
“If they don’t feel valued or are treated only as a means to an end, they’re going to vote with their feet and search for a new place to work – somewhere with a higher chance of them feeling significant,” he adds.
5. Use your gut instinct to make HR decisions
Thanks to technology, businesses can now make better-educated and informed HR decisions. They’re able to give feedback to employees based on a whole range of metrics and mathematical analyses.
Despite this, it’s important that businesses don’t become too reliant on data, says Colin Dulson, MD of Berrison, a business development company, which helps SMEs with their employee engagement.
“Effective employee feedback is crucial in fast-changing workplace cultures. Businesses need to ensure their appraisal systems are up to date,” he adds. “But employees, especially the young generation, don’t always want to be dictated by number-crunching.”
They want trust, training and autonomy, he says, and this comes from having conversations and using gut instincts.
6. Offer flexible benefits
You may assume that employees are more inclined to stick around if they’re paid more, but this is not always the case. Dulson says younger workers, in particular, are known to be less concerned with financial gain and instead seek rewards that complement new styles of working that their generation is used to.
King says that if businesses are going to offer a benefits package, flexible benefits are an attractive proposition.
“Offering flexible working hours and the chance to work from home appeals to a lot of employees, as they are perks that fit their lifestyle,” says King. “Allowing flexibility creates happier employees, who will be more dedicated and will want to stay in their job.”