Sling is now Sling by Toast! Learn more

Sling is now Sling by Toast! Learn more

Woman working on a laptop

Employee Retention: How To Retain Employees For Small Businesses

Employee retention should be high on every manager’s priority list. If it’s not, you run the risk of your best employees leaving for greener pastures. That, in itself, is a huge problem because now you have to find a qualified replacement in addition to your normal daily responsibilities.

But an employee leaving doesn’t just impact you, the manager. It can also cause ripples throughout your business as a whole.

Some team members may wonder if their job is on the line. Some may even start searching for a position at another company. And then there’s the inevitable effect all that stress has on employee productivity and engagement.

You can avoid this negative impact by making employee retention a cornerstone of your business strategy. Here are some of the best ways to improve employee retention in your company.

Strategies To Improve Employee Retention

1) Seek Diversity

Diversity of workers

When you promote diversity in the workplace, it creates a sense of inclusivity and equality. That type of company culture will make your employees happier and more comfortable in their work environment.

When your employees feel happy and comfortable at work, they’ll be more productive and motivated — and less likely to look for opportunities elsewhere.

2) Find The Best Hires

The first step in boosting employee retention is hiring the right people. Don’t just focus on finding the right skills for the job. Think of the bigger picture.

A huge part of the employee-retention equation is determining whether or not a potential hire fits in with your company culture. Do they exhibit the same ethics that you prize in your business? Are they extroverted or introverted?

When you hire with skills, culture, and longevity in mind, your employee retention will drastically improve.

3) Prioritize Onboarding

Onboarding is a key component of welcoming a new employee to your business and making them feel like a part of your team.

So don’t just hire a new team member one day and turn them loose to work the next day. Onboard your employees the right way so they know what they’re doing and where they fit in.

4) Include Benefits

Competitive pay is certainly a significant part of what drives employee retention. But a high pay rate isn’t the only thing that keeps employees from looking for opportunities at other companies.

Things like health insurance, life insurance, a 401k, and other fringe benefits can help motivate your employees to stay with your business longer.

5) Promote Teamwork

Example of teamwork to improve employee retention

When you promote teamwork in your business, you make it easier for your employees to experience intangible benefits that aren’t found anywhere else, such as:

  • New ideas
  • Improved efficiency
  • High-quality work
  • Better morale
  • Group cohesion
  • A sense of accomplishment
  • Quicker innovation
  • Less managerial interference
  • Stronger working relationships
  • More opportunities to learn

In fact, a good sense of teamwork can be worth more than all your fringe benefits combined.

6) Provide A Comfortable Work Environment

You want your employees to look forward to their workday. But if their work environment is uncomfortable in some way, they’re going to start searching for ways to find relief. For some, that may mean looking for a job elsewhere.

You can avoid this problem by providing as comfortable a work environment as possible (within reason, of course). Talk to your current employees and ask questions of potential new-hires to discover ways to make your office more user-friendly.

7) Offer Training

If you want to improve employee retention, train your employees to advance within your company. No one likes to feel stuck and without any opportunity to learn new skills.

On-the-job (or even outside) training gives your team members the chance to develop as an employee and become more valuable to your business. This can translate into more loyalty and increased employee retention.

8) Communicate And Listen

Managers reviewing employee retention

If you communicate with and listen to your team, your employee retention will be high. If you don’t, your employee retention will be low. It’s as simple as that.

Talk to your employees on a regular basis, and make sure they feel comfortable coming to you with questions, ideas, and problems.

9) Conduct Regular Performance Reviews

Few people enjoy sitting through a performance review. But when you remove the anxiety and stress from the review process, it’s easier to show your employee how to improve and achieve success in your business.

Then, when they feel a sense of achievement in the work they do, they’re more likely to want to stay in that position rather than go somewhere else.

10) Celebrate Accomplishments

Coworkers celebrating

Whenever possible, celebrate the accomplishments of your employees. At the end of a project or when they finish a particularly difficult task, give them the commendation they deserve.

If you do this, all your employees will feel like a valued part of your team and will want to work hard for years to come to make your business a success.

11) Provide A Comprehensive Employee Handbook

An employee handbook defines the working relationship between you and your employees. The more comprehensive your employee handbook the better everyone will understand how they fit in with, contribute to, and interact with the business itself.

In addition to being a resource for common employee questions, the information your employee handbook contains can help all your employees feel more comfortable with their role in the company. That translates into improved employee retention.

At its most basic, an employee handbook tells your employees what you expect of them and what they can expect from you. But that simplicity belies an underlying complexity.

If you allow your employee handbook to get too large or too complicated, it can defeat the purpose it was intended to address.

Here are a few of the most essential sections to include:

  • All major employee responsibilities
  • All major employee procedures (e.g., clocking in)
  • All major employer responsibilities
  • Legal disclaimer
  • Company background
  • Time off policy
  • Cell phone policy
  • Discipline procedure

Keep your explanations as brief as possible so the employee handbook doesn’t get excessively long.

12) Improve Your Leadership Skills

employee retention starts with the manager

Retaining employees starts with you, the manager or business owner. If you are the best leader you can be for your team and your business, employees will want to work with and learn from you.

It’s imperative, then, to work on improving your leadership skills just as much as you work on improving your employees’ skills. That means developing your own management style specifically tailored to your business (and even tailored to different teams).

It means strengthening your people management skills so you can inspire your team to improve. And it means taking the lead to solve problems for the benefit of your business as a whole.

For more help perfecting your leadership skills, take a few minutes to read these informative articles:

13) Create An Organizational Strategy

Strategy — be it at the functional level, the business level, or the corporate level — gives your business direction and purpose. That same strategy gives your employees a sense of purpose and helps them establish goals for which to strive.

As a result, your team members will be inspired to continue working for your business instead of looking for a job that does inspire them.

If you haven’t yet established a strategy for your business, start small with a vision or mission statement. These simple declarations of fact can help guide your team and your business to the next stage of development.

For more resources on organizational strategy, click on the helpful links below:

14) Establish Employee Development Plans

It’s one thing to offer on-the-job training. It’s another thing entirely to show your team members how that training will help them advance in your business.

Establishing individualized employee development plans provides a road map of sorts that allows your team members to apply the training they receive and improve the way they work.

An effective employee development plan should address the before, the during, and the after so that individuals know what to expect from putting in the time and effort to learn new skills or improve current skills.

Offering a personalized development plan gives both new and long-time employees something to look forward to and a sense of personal accomplishment when they reach those milestones.

15) Promote Work/Life Balance

work-life balance can improve employee retention

Work/life balance is essential for employee retention in this fast-paced world. Without it, your employees are going to burn out and start looking for a job that offers them more flexibility.

Whenever possible, give your employees opportunities to find time outside of work for the activities they enjoy. Give them three days off in a row now and then. When they are out of the office, try not to interrupt their downtime unless absolutely necessary.

Another great way to promote work/life balance is to get your team together for a lunch away from the office. This is especially effective at the end of a long project when motivation is at its lowest.

Your employees have likely been focusing the majority of their time and energy on the project to the exclusion of their personal lives. Reward them and give them some time away to recharge and regroup.

And speaking of rewards, don’t neglect to show your appreciation whenever possible. A simple, “Well done!” goes a long way toward giving your employees a sense of work/life balance they can’t get anywhere else.

For more ways to show your appreciation and promote work/life balance, take a moment to read this article:

16) Calculate Your Employee Retention Rate

You can’t improve your employee retention rate if you don’t first measure it.

To calculate this metric for your own business — and to see where you stand in relation to other businesses — plug your numbers into a variation of the formula that the Bureau of Labor Statistics (BLS) uses to calculate the annual national turnover and attrition percentage.

The formula is:

Employee Turnover = (Number Of Departures / Average Number Of Employees) x 100

Note: They use “departures” (or “separations”) to refer to the total number of employees who have left or been fired.

Before you start plugging and chugging, though, it’s essential to understand what the results of this formula tell you. Notice the first two words: Employee Turnover.

This formula produces a number (a percentage) that essentially tells you how much of your workforce changes (or turns over) in a given time period.

But we want to calculate employee retention (the opposite of employee turnover). To that end, we’re going to modify the formula slightly so that it produces a number that tells you how much of your workforce stays the same in a given time period.

Here’s the modified formula:

Employee Retention = 100 – ((Number Of Departures / Average Number Of Employees) x 100)

So, for example, if you want to examine your employee retention rate for 2021, you’d first find the number of employees who left or were let go and the average number of employees for the year.

You discover that your business’s annual average number of employees was 27 in 2021, and three people left your business between January 01 and December 31.

With those numbers in mind, your employee retention rate would be:

Employee Retention = 100 – ((Number Of Departures / Average Number Of Employees) x 100)
Employee Retention = 100 – ((3 / 27) x 100)
Employee Retention = 100 – (0.11 x 100)
Employee Retention = 100 – 11
Employee Retention = 89%

The results tell you that 89% of your workforce stayed the same, while 11% of your workforce changed.

You can customize this formula even further to analyze employee retention for a variety of circumstances and time periods, including:

  • Annual retention
  • Monthly retention
  • Voluntary turnover (those who left of their own accord versus those who stayed)
  • Involuntary turnover (those who were let go versus those who stayed)

Armed with those numbers, you can then implement the strategies on this list to improve employee retention throughout your business.

17) Give Your Employees Autonomy

Woman working on employee retention

During their first few days and weeks at your company, employees expect that someone will be looking over their shoulder while they work.

But, as time goes on and they become more adept at their job, employees expect a bit more autonomy — they don’t want someone micromanaging their every move and second-guessing their decisions.

If employees don’t get the autonomy they need, they may begin to feel that you don’t trust them. Lack of trust can lead to lower morale, resentment, displeasure, and a whole host of other negative emotions.

These negative emotions can, eventually, lead a team member to look elsewhere for a job that offers them more independence. That’s not a good recipe for employee retention.

Try talking to each employee to see how much autonomy they’d like. Some will want nothing more than an assignment, a deadline, and to be left alone to complete the task.

Others, though, will want you to be a bit more involved in their workflow. It all depends on how they work and how comfortable they feel with the job.

When you find the right balance of autonomy for each team member, their job satisfaction will soar and your employee retention numbers along with it.

18) Improve Direct Oversight

While many factors affect morale within your business — and, thus, employee retention — one of the most influential is the relationship that each team member has with those in positions of direct oversight.

If a conflict develops between an employee and their manager, the employee may choose to stick it out for a while in the hopes that things get better.

Without some way of improving the situation, though, the employee’s performance may suffer, they may become difficult to work with, and you may have to let them go. Or the employee may just skip all of that and look for a job elsewhere.

However it manifests, conflicts between team members and those who manage them can be difficult for everyone involved.

The most direct way to prevent oversight conflicts is by training employees and managers alike in both job-specific skills and interpersonal skills.

Not only does that training improve the employee/manager relationship, but it also improves the employee/customer relationship as well.

For more information on employee and manager training, check out these articles from the Sling blog:

19) Equip Your Team With The Right Tools

Employees working on their computers

Imagine this scenario: You don’t have a phone, and you have to ask your coworker a question about the project you’re working on. However, she works 10 floors up or in another building.

You’re going to have to spend a lot of time walking back and forth to get the answers you need.

Now imagine you had to do that multiple times every day. How much more difficult and time-consuming would your job be?

Or, imagine you do have a phone, but you always have to fix it before you can make a call. And, even then, there’s no guarantee it will work. How much more frustrating would your workday be?

Your employees may be in much the same situation because they don’t have the tools they need to do their job productively and efficiently.

If they constantly have to spend time performing tasks that could be simplified with a simple tool — or they constantly have to spend time fixing the tools they do have — their job satisfaction will suffer and your employee retention will fall.

To prevent drops in job satisfaction and employee retention from affecting your business, do your best to equip your team with the right tools.

If you’re unsure what tools they need — or would like — ask them directly.

A relatively simple piece of software or equipment can go a long way toward improving the way your team works and helping you manage your employee retention numbers for the better.

20) Promote Inclusivity

We mentioned inclusivity back in the first strategy on this list, but what exactly is it?

Inclusivity is roughly defined as:

The practices and attitudes that ensure that everyone has equal access to the same resources and opportunities, that you treat everyone fairly and respectfully, and that each employee can participate fully in their own success, the team’s success, and the business’s success.

Yes, there is a lot wrapped up in that definition, but the fundamental principle of it is that all team members’ thoughts, ideas, and perspectives matter.

You can develop inclusivity in your business by making everyone feel like a valuable member of the team. Doing so contributes to the overall happiness of your team and helps improve employee retention in the long term.

21) Run An Efficient Work Environment

Computer screen with the words Do More on it.

As we’ve seen throughout this article, team happiness plays a big role in helping you maintain a healthy employee retention rate.

But if your employees work in a chaotic environment every day, their morale and happiness will suffer.

Yes, some jobs are just chaotic by nature, but that doesn’t mean that every aspect of the business has to follow suit. Running an efficient work environment is the best way to counteract the effects of so many things going on all at once.

Think of it as a cause-and-effect relationship. An efficient work environment means fewer problems. Fewer problems means less stress. And, less stress means that it’s easier for your team to maintain a good attitude — even amidst the hustle and bustle of a busy, demanding job.

For help building efficiency in your business, take a few minutes to read these articles from the Sling blog:

22) Stay Organized

The chaos we talked about in the previous strategy often manifests itself as disorganization.

When you or your managers have trouble staying organized, it can have a dramatic negative effect on both your attitude and the attitude of your team.

Yes, staying organized is difficult for some, but, with a little training, it does get easier.

Check out these articles from the Sling blog for tips to help you keep your work life as organized as possible:

Increase Employee Retention Through Scheduling

Sling's scheduling feature

One of the best ways to improve employee retention is through scheduling. Offering unique scheduling options gives your employees more control over their work/life balance and makes your business more attractive than other businesses that operate on a strict 9-to-5 schedule.

Examples of different work schedule types include:

Scheduling software like Sling simplifies even the most complicated shifts so that you can sit down, make your schedule, and move on to more pressing matters.

All of Sling’s cloud-based features — from schedule creation to time clock to payroll calculations — make it easy for you to create the best schedule possible, distribute it with ease, make changes, and juggle time-off requests.

Sling app

Sling even provides suggestions and warnings when you’ve double-booked a team member or created a conflict in another part of your schedule. All of this makes Sling the best choice for simplifying your shift work schedule.

So regardless of whether you choose the 9/80 work schedule or a compressed workweek, the best way to plan when your employees will work is with scheduling and time-tracking software like Sling.

For more free resources to help you manage your business better, organize and schedule your team, and track and calculate labor costs, visit GetSling.com today.

Get started today

Schedule faster, communicate better, get things done.