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Once you’ve established your business model, developed client or customer relationships, and filled in any gaps in your team, it’s time to scale your business, also known as the Build And Grow stage of a company’s life cycle. You may feel like everything is happening at once, with plenty of fires to put out. From new hires to streamlining day-to-day business processes, preparing financial documents for the scrutiny of potential investors, and lots of problem solving, these articles and tools will help you survive this challenging and exciting stage.
To be successful both day-to-day, and in the long term, it’s important for businesses to take measures to both attract top talent and retain those quality employees once they have them. But with fewer resources than larger companies, many small business owners may feel they are unable to compete with extensive perks and expensive benefits.
However, many of the things that employees most value—including work-life balance, transparency and appreciation for a job well done—are things that small companies are well-suited to offer. And when you keep your employees happy through good benefits and wages, they’re less likely to leave you for greener pastures, costing you substantial time and money on recruiting and training their replacements.
From employee recognition programs and bonus and raise strategies to tips for creating a flexible work environment, this blog offers our best advice for bringing in quality applicants, and keeping your dedicated employees engaged and committed. Let’s start by exploring how to draw in the highest quality applicant pool.
From Generation X to Generation Z, finding a company with a compelling culture and clear values is an essential part of the job hunt. Building your business’s brand to appeal to these sentiments, including authenticity for Generation X, transparency for Millennials, and taking a stand on important social and environmental issues for Generation Z, can help you attract a strong customer base. It can also draw in a larger pool of applicants—ones who will also be dedicated to your company’s message. How important is it to integrate these values into your messaging? Almost 63% of Gen Z feel it is “very or extremely important” to work for an employer that shares their values and 64% of Millennials take a company’s social and environmental commitments into consideration when deciding where to work, not taking a job if a company lacks “strong corporate social responsibility (CSR) values”.
Additionally, your company’s values should be reflected in the benefits that they offer and advertise. Top concerns are schedule flexibility, opportunities for remote work and a good work-life balance.
When recruiting candidates, you want to be sure that your job descriptions effectively communicate the job (being as transparent as possible) and relate the aspects of your work culture that will entice top talent. Here are a few key ways to achieve this:
Even the most transparent job listing won’t get you very far if you don’t have the company culture, values or benefits that bring in talent. While it can be difficult to balance the wants of employees with your company’s bottom line, keep in mind that not all perks are costly. Let’s take a look at some policies and strategies you can use to entice the right applicant pool.
While compensation may not be the only factor potential employees consider, having adequate pay that reflects the real cost of living (from wherever your best candidates are—even remote ones), is still essential for attracting highly-qualified individuals. Here are some ways you can be sure you are offering the right pay:
Valuing work-life balance by offering flexible scheduling, adequate vacation time and time off for other needs (including parental leave, illness, and caregiving) can be a major draw to potential hires—signifying that your company is one that cares about its employees. And benefits from these offerings extend to you, the employer, as well, in the form of increased worker engagement, productivity and loyalty.
As business research firm McKinsey & Company’s recent “Employer Health Benefits Survey” illustrates, “with record numbers of employees leaving their jobs, the ‘Great Attrition’ is putting pressure on employers and raising their awareness of the importance of employee health benefits.” In fact, 73% of jobseekers say good healthcare benefits are one of their top three priorities. Because providing healthcare can be one of your largest expenses, take the time to explore options that satisfy your employees while allowing you to manage costs. At the same time, remember that upfront savings can end up costing you more in the long run due to recruitment costs, trouble retaining employees, and increased employee illness due to unaffordable care.
Additionally, professional employees will consider an employee-sponsored retirement plan, with an employer match essential. But if you want to use retirement benefits to attract employees, don’t hold off on matching contributions. Applicants aren’t sure—yet—how long they will plan to stay with your company. If retirement matches don’t kick in (or are not vested) for a while, they might not even consider them as part of the benefits package when making their decision. To give an extra edge to your offerings, think about going above the average employer match or 4.5% (even by only 1 or 2%!) as a cost-effective way to make your benefits rise above the competition.
Beyond expected benefits like healthcare and retirement, also consider other perks that potential employees will appreciate—and whose appeal to them could outweigh the cost for you. These could include wellness programs or tuition or continuing education reimbursement.
Once you’ve got a quality employee, you will certainly invest a lot of time, money, and energy into training them for their job and incorporating them into your company culture. You want to be sure that, in addition to good benefits, you also create a workplace environment in which they will want to stay. Here are just a few small business employee retention strategies that can have a big impact.
Transparent communication in small business workplaces can build relationships, create opportunities for innovation, boost employee morale, and reduce lost time and energy on errors and oversights. So how do you maintain good communication at your company? According to Chron, it can be as simple as being responsive (to emails and messages), acknowledging employees' contributions, and “creating a culture where employees feel empowered to discuss the challenges they face at work.”
Transparency is an important part of good communication—being upfront about your expectations of employees, providing clear feedback on their performance, and following set, published parameters for promotions and raises. When employees understand what they need to do to succeed, they are less likely to become disengaged or disillusioned.
One way to ensure your employees remain engaged is to provide them with opportunities for growth through training and development programs. In fact, employers with professional development opportunities have 34% higher retention than those who do not. If your operation is too small to develop its own development programs, provide funding for continuing education, conferences, or even webinars, allowing them to use their work time to fulfill requirements. Additionally, you can take the time to train your employees one-on-one for greater responsibility within the organization.
When employees have opportunities for advancement within the company, they are less likely to seek new, better paying or more challenging jobs elsewhere. Because the cost of employee turnover is at least 1.5 to 2 times an employee’s annual salary, it can be cost effective to ensure that there are always advancement and professional development opportunities available for your small business employees.
Taking the time to recognize your staff for their contributions and accomplishments can make employees feel valued, appreciated, and like an integral part of your business—keys to retaining them for the long haul. Taking the time to regularly praise your employees' efforts is important. But formalizing it through a more official platform, like an employee recognition program where both employees and their managers participate in recognizing each other’s role in the success of the company, can make that recognition feel more meaningful (and can help you as an employer scout out employees who are ready for the next step in the career).
An essential part of recognizing your employee’s accomplishments is a real-world reward. Bonuses and raises are some of the most effective performance incentives, and the lack thereof is often the reason otherwise happy employees choose to leave their positions. As Pew Research points out, 63% of people cited low pay as a key reason they left a job in 2021.
Not sure where to start? Check out SHRM’s Managing Employee Recognition Programs for steps for implementing an effective system.
Offering flexible work schedule options for small business employees does wonders to attract employees. For the quality employees you already have, recognize that allowing them to maintain their work-life balance—even through promotions and increasing responsibility—can safeguard them from burnout and demonstrate to them the value of working with your company. A few ways you can do this include:
Most of these methods require little-to-no extra cost for you and can do wonders for both increasing productivity and maintaining employee longevity. Ultimately, remember that employee happiness results in employee dedication, which is a win for everyone.
There’s a lot that goes into making a business successful—but no company can prosper without the many individuals who contribute to making it happen. Small business owners may feel that they will struggle to attract and retain talented and dedicated employees, but there are many things that small businesses can do to compete with larger companies. Overall, larger corporations can never match the close-knit environment of a smaller establishment.
As you implement the key strategies discussed above, remember that your bank can play an important role in keeping your business nimble and providing financial tools to meet your employees’ needs. From Business Resources and Cash Management Services to Commercial Lending, at First Bank we have the services and products that can simplify your financial management and allow you to devote more time to your company’s mission and goals.
We look forward to serving your small business in Carmi, Evansville, and throughout Southeast Illinois and Southwest Indiana. Connect with us today to see how our experienced Relationship Managers can help Make Great Things Happen for your business.
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