The pandemic redefined the workplace. Employees dubbed this time the Great Awakening, a chance to reset priorities and to make decisions about their careers. Employers, on the other hand, called it the Great Resignation, an unprecedented attrition phenomenon that caused them to reevaluate their strategies for managing their workforce.
Whatever the angle, an effective strategy for retention requires an understanding of the motivators that fueled the surge of resignations. According to Strengthening Workplace Culture: A Tool for Retaining and Empowering Employees Globally, a 2022 workplace culture report from the Society for Human Resource Management, “Most workers who have thought about leaving their current organization work in organizations with poor cultures. Nine out of 10 workers (90%) who rate their culture as poor have thought about quitting, compared with 72% of workers who rate their organizational culture as average and 32% who rate their culture as good.”
For small businesses concerned that employees might be lured away by higher salaries, this suggests that there are other motivators that budget-conscious managers can address without entering a bidding war they can’t win. By examining some of these motivators and building a culture that encourages retention and inclusion, small businesses can remain competitive.
LACK OF TRAINING AND TRANSPARENCY
In small companies, loyal employees who excel are often rewarded with promotions, though they sometimes lack the leadership skills needed to perform in their new role. There are many economical career development training options available through professional organizations and local universities that can address any deficiencies. When considered as part of a comprehensive employee retention strategy, this can be a relatively inexpensive means to boost retention.
In addition to improving communication skills, regular and intentional communication is also important. Transparent and consistent communication feels inclusive and helps employees collaborate while also ensuring that everyone is strategically aligned and working together toward common goals.
In small business, employees are often called upon to fill several roles. This can lead to employees feeling as though they’re constantly stretched too thin, without an acknowledgment or reward for this additional effort. When there is frequent turnover or other types of short-staffing issues, it can seem as though there’s never a light at the end of the tunnel and employees begin to feel exhausted and resentful.
The solution within small businesses may look very different than it might in a large company, which may have an entire department dedicated to finding creative ways to promote employee well-being and resources to manage the workload when there’s a vacancy or absence.
Within smaller organizations, cross-training is essential to help balance workloads and create support for coworkers who are away from the workplace. This may require that any segregation of duties that’s in place be put on hold in the interest of maintaining operations during an absence or vacancy.
This may raise a potential risk temporarily, but small companies are often forced to choose between internal controls and continuing operations. Balancing these risks and providing appropriate cross-training is essential to small business continuity. As a bonus, cross-training presents opportunities for employees to develop new skills and identify undiscovered interests and talent.
LACK OF CAREER GROWTH OPPORTUNITIES
Sometimes it’s difficult for managers to envision career pathways and growth opportunities within a small company because the business is focused on the immediate tasks that need to be completed and managers may have little energy left for anything else.
According to human resources expert Sheree Knowles, “Most companies think about career growth in a traditional sense. They believe that the only way to achieve career growth is through promoting employees to a higher position. In small companies, there aren’t many opportunities for promotions.”
Knowles advises small companies to shift from a traditional “career ladder” point of view to a “career lattice” perspective where employees can grow their careers by taking lateral positions, shadowing others, and receiving stretch assignments.
Small businesses have a superpower that large companies don’t have: They’re agile and nimble. They can move quickly and adapt to this new competitive landscape. There are several solutions that small companies can implement that don’t require a big budget.
Set clear performance expectations by providing regular and consistent performance reviews that include areas of opportunity for training and development. Schedule at least one separate career pathway conversation with employees to help them consider what may be available within your company. Remember, it doesn’t always have to result in a promotion.
Develop compensation and benefit packages to serve a multicultural and multigenerational workforce. Small companies that can’t compete on salary alone can compete based upon their knowledge of their employees by customizing an overall package that resonates with their employees. For some employees, flexibility to balance personal commitments can be an important benefit that inspires retention. For others, it might mean active mentorship for younger professionals who value recognition and encouragement.
The important thing to understand is that there isn’t a one-size-fits-all approach to this, and one of the benefits a small company can bring to its employees is a customized package that considers their needs rather than offering a plethora of benefits that aren’t needed or valued by its employees. Keep this simple. Ask them what’s important to them and look for ways to offer benefits they’ll value.
RECOGNITION AND INCLUSION
A strong culture of employee recognition can go a long way toward helping companies retain employees, according to a new survey of more than 7,600 U.S. adults who were employed full-time or part-time (Gallup and Workhuman, Unleashing the Human Element at Work: Transforming Workplaces Through Recognition, 2022). Leaders who take the time to understand what motivates their employees and how they prefer to receive feedback do well with this. Leadership training can provide tools that will help.
Diversity, equity, belonging, and inclusion are important for companies of all sizes, but the impact within a small company can be even greater. Diversity of thought inspires innovation, which brings a motivating energy to the environment. Small businesses have demonstrated tremendous resiliency in recent years, but the uncertainty we continue to face will require continued innovation and a commitment to a sustainable strategy.