7 ways to retain employees

Employees are the backbone of any successful business. Changing an employee can be a painful experience, especially for small businesses and entrepreneurs who have small teams. Employee turnover can result in the loss of valuable knowledge and experience, damage customer relationships, and cost thousands of dollars to find and train a replacement. The cost of hiring and training a mid-level manager is close to $30,000. Employee turnover costs American businesses about $1 trillion each year. Here are a few ways businesses can reduce turnover and improve employee retention.

1. Start with compensation and benefits

Employees expect to be well compensated for the work they do. Companies that fail to remain competitive will struggle to retain their best talent. While salary and bonuses are important factors in compensation, companies should also explore opportunities to improve other forms of compensation such as health insurance, life insurance, vacation policies and 401k contributions. Even non-monetary benefits, such as having an on-site gym or free time for volunteer activities, can increase employee satisfaction and retention.

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2. Recognition and praise of employees

Employees want to be recognized for their contributions. Business owners should take the time to reward and recognize their team members who give their best. Various forms of recognition are effective, from sending a personalized note thanking them for their work on a special project or giving a gift card to help another department. Public praise can also be effective, such as giving out awards at a company meeting.

3. Provide opportunities for career development

Career development is a critical part of employee retention. Employees who constantly feel challenged will be more likely to stay with the company. Find ways to give your top performers long stretches and raises. Training such as educational courses and mentoring programs can provide an opportunity to improve your existing staff while preparing them for their next opportunity.

Related: This is how to increase employee retention with lifelong learning

4. Provide the right resources and tools

Employers are responsible for ensuring that their employees have everything they need to be successful in their jobs. Skimping on these resources can leave employees feeling underappreciated, burned out, and frustrated. Resources come in many forms, from hiring the right number of employees to support operations to updating technology and improving processes.

5. Encourage a healthy work-life balance

Work-life balance is extremely important to most employees and can affect turnover. According to the Pew Research Center, 45% of employees quit because of insufficient flexibility in their work schedule, and 39% quit because they worked too many hours. Enabling employees to balance their work and home lives reduces stress and allows them to attend to personal issues that would otherwise distract them from work.

Businesses can help maintain a healthier work-life balance by allowing employees to work remotely (full-time or part-time), create flexible work schedules, and have more sick or personal time.

Related article: How to restore work-life balance

6. Hire the right people the first time

While this may seem like common sense, it’s easier said than done. Rapid changes in the economy and workforce can leave companies desperate to fill open positions. It can be tempting to just hire a semi-qualified candidate. Unfortunately, this can increase turnover for both new and existing employees. New hires may leave quickly when they are unable to cope with the demands of the job. Existing employees can also burn out from constantly training new employees over and over again.

Instead, try to pass on the best possible candidate for your vacancy. Also, clarifying expectations up front can help reduce the number of employees who accept the position only to leave soon after because the job isn’t what they expected.

Related article: How entrepreneurs can find great talent despite labor shortages

7. Get feedback from your team

Employees leave companies for a variety of reasons. One of the best ways to reduce turnover is by getting feedback directly from employees about how they feel about working for the company. Too many companies collect this type of information in exit interviews. Unfortunately, this does not help because the employee has already chosen to leave. Instead, conduct tenure interviews with top performers to find out what would prevent them from seeking new opportunities outside the company. Anonymous employee satisfaction surveys can also provide a wealth of information to help business owners make retention decisions.