Quick look: Employee turnover is expensive—a cost with a big impact on small- and medium-sized businesses (SMBs). With attention to a few key areas of the business, SMB employers can respond to employee needs and build stronger teams who stick around longer.
As what some are calling the “Great Resignation” continues, an estimated 55% of workers are likely to look for a new job over the next year. According to Glassdoor, the average cost to hire a new employee in the U.S. is $4,000 and takes around 52 days. Add in the loss of productivity during the transition and time needed to bring new employees up to speed and the takeaway becomes clear: employee turnover is costly.
Small- and medium-sized businesses (SMBs) will feel this squeeze more acutely. Tighter budgets, smaller staff, and more competition from bigger businesses mean SMBs must be extremely careful about retaining great staff members.
As a leading PEO company dedicated to serving the needs of SMBs, we’ve helped hundreds of businesses strengthen their approach to employee retention. Here are some proven tips from our HR experts to control turnover and protect your business from expensive workforce disruptions.
Tip: Make sure employees feel supported
From recruiting to training, onboarding, and throughout the course of employment with your company, employees want to know you’re looking out for them. Provide ample opportunities for staff to submit feedback about whether they have everything they need to perform at their best. Education and training, company mentorship, work supplies, scheduling, and sufficient check-ins with HR are areas where employees may need more resources or attention.
Tip: Promote from within
Employees who can’t see a trajectory with your company are likely to start looking elsewhere as their professional goals evolve. Does your company have a clearly articulated process for internal promotions and employee development? If not, it’s time to create one. Start thinking about your company goals in the next two to five years. Where might you utilize today’s top performers in new roles?
Tip: Use employee feedback to guide decisions
SMB employers can gain deep insight into what employees want—all they have to do is ask. Unfortunately, communication at many businesses flows in one direction (from the top down) and employees never get the chance to contribute ideas in a meaningful way. Use one-on-one check-ins, employee surveys, or anonymous suggestion boxes to ask employees to share feelings and preferences on everything from their professional satisfaction to the benefits they desire most. Employee input should weigh heavily in your HR decision-making.
Tip: Conduct stay interviews
Recruiting interviews and exit interviews are par for the course, but not enough SMBs conduct stay interviews. “Stay interviews” are exactly what they sound like: interviewing employees to learn what makes them stay with the company. Learnings here help SMB leaders understand what the company is doing well and uncover areas where they can better serve employees.
Tip: Update your benefits
Larger businesses may be able to offer higher salaries, but employee benefits are one area where SMBs can stand out. Though often limited by budgetary constraints, small- and medium-sized organizations can design benefit packages based on current employee needs. It’s time to get creative. Here are five benefits trending right now: childcare and family benefits, home office expenses, mental health support, remote work and flexible schedules, and employee resource groups.
Partnering with a PEO company is another way SMBs can gain access to Fortune-500-level staff benefits. Coming under the PEOs co-employment umbrella provides access to large group bargaining power smaller businesses may not otherwise be able to achieve.
Tip: Proactively recognize employees
Staff at all levels want to be acknowledged for their contributions. Recognition for a job well done is consistently ranked one of the top factors in whether an employee stays with a company. SMB employers can demonstrate appreciation via one-on-one check-ins, annual reviews, performance bonuses, pay raises, “employee spotlight” articles, during staff meetings, and more. Recognition should feel genuine and personalized. Work with your HR department or PEO company to brainstorm a proactive process to show employees how much they matter.
Tip: Evolve your company culture
Thinking of company culture as something happening “in the background of the business” disregards the important role culture plays in employee productivity. Per O.C. Tanner’s 2020 Global Cultural Report, 87% of employees report being satisfied at companies with a thriving culture. Businesses with great company culture and a positive employee experience can be six times more likely to have a positive Net Promoter Score (NPS). In sum, great company culture pays off.
Culture touches all aspects of the business, including work/life balance, diversity, equity and inclusion (DEI), education and training, and whether employees feel supported. If you have never closely evaluated your company’s culture, now is the time to get a clearer picture. Your broker, PEO company, or HR department leader can help shape employee feedback surveys to gain an accurate assessment of what aspects of your culture are working well and where you’re falling short.
Tip: Seek advice from HR experts
Limiting turnover in an organization can be tough because it requires adjusting multiple areas of the business and the results may not be immediately evident. Working with HR experts at a PEO company can advance your efforts immediately.
PEO companies like ExtensisHR are dedicated to helping SMBs become better employers. With a full staff of HR specialists dedicated to HR management and compliance, partnering with a PEO enables your business to gain traction on day-to-day HR management duties as well as strategize on how to improve employee satisfaction and strengthen your workforce. With the help of advanced HRIS technology and deep industry expertise, HR experts can help you see the true cost of turnover, recruit better-fitting employees, and keep existing staff engaged and excited.
Invest more in your most important asset: your employees. Our HR experts will show you how.