Retaining your employees takes creativity and problem-solving in the best of times. This is even truer for small businesses who may not have the financial position to offer higher pay. When your employees are weighing their options, watching job boards or responding to eager recruiters, the promise of making more money can be enough for them to risk a job change. So how do you retain employees when you don’t have the financial flexibility to keep up with the competition? What could you offer your people that might matter more than money?
The first step to answering this question is much more straightforward—and much more important—than you might think. If you want to know what your employees care about, ask them.
Good communication is the best defense
The employer-employee relationship is just that—a relationship. And the backbone of any healthy relationship is good communication.
Building a strong relationship with your employees will make them feel welcomed and appreciated in your business. When members of your team are imagining leaving for other opportunities, they’ll be less inclined to leave a place where they feel seen and heard. One way you can foster strong communication is by asking your team what matters to them.
What kind of workplace culture do they value?
What benefits do they have or want that will keep them invested and committed?
Is working from home important to them? Flexible schedules? Professional development?
Don’t make assumptions about what’s going to keep your people happy—let them tell you.
Communication is about both listening and talking. So talk to your employees. Be transparent about your business’s financial status so they can understand that you’re making decisions about payroll with the company’s health and security in mind.
You may be naturally resistant to sharing details about your financial position—I understand. But transparency will prevent your employees from creating their own stories about why you may be withholding a raise that they feel they’ve earned and deserve. So decide how much you’re comfortable sharing, and be prepared to answer questions. Take care to deliver the information with an emphasis on what you’re working toward—you don’t want to give the sense that the company is doomed. But be open. Your employees will be more receptive to salary freezes or modest increases when they understand the reasons driving them.
Time can be as valuable as money
You may not have a lot of wiggle room when it comes to pay. But you do have another currency at your disposal: time. For most employees, time will rank nearly as highly as money when you ask what they value most.
If you’re currently adhering to a strict nine-to-five schedule for your entire team, ask yourself if that’s necessary.
Can work be performed asynchronously so they can complete their tasks on a schedule that works for them?
Do they need to be physically present, or can they work from home for some or all of the week?
Can you offer a four-day workweek so your team can have Fridays off?
Can you consolidate or eliminate unnecessary meetings?
Any time that you can give back to your employees without disrupting the business will be seen as a major benefit, and it may just be enough to keep them from considering other offers.
Get creative with fringe benefits
Keeping your employees’ feedback in mind, take a good look at the benefits you offer and come up with creative new ways to make your business a standout place to work. What you can offer will depend somewhat on the type of business you run. If you own a restaurant, are you feeding your employees or allowing them to take home what’s left at the end of their shift? If you make a product your people value, can you offer them a substantial discount?
Another idea is to explore financial incentives that may entice employees while offering tax advantages to the company, like education assistance. Your investment in their professional development will help to mature them in their role while strengthening your relationship. Some incentives have the added benefit of driving performance, like profit sharing and employee stock options. When employees’ earnings are directly tied to profits, they’ll feel a sense of ownership, which the quality of their work will reflect. They’ll be able to make more money—without that money coming out of your cash reserves.
No matter how healthy your business’s books are, you should always view employment as a two-way street. So open up the lines of communication. Give your people the space to tell you what they want, and then ask yourself how you can give it to them. If you’re looking for more ideas to retain employees, reach out to us—we’re here to help.