By Rachel Stone, Head of People Management at Smith & Williamson
You’ve heard all the clichés – ‘people are the lifeblood of the business’, ‘the business is all about the people’, ‘people buy from people’. They are all, as clichés tend to be, true.
In this article Rachel Stone asks (and answers!) seven key questions about retaining the best people.
1. Why do you think that smaller enterprises in particular have problems holding onto their best employees?
Often small employers forget to review the overall reward package for people as the business grows. In a very small business, new staff don’t expect much more than basic salary and holiday. However, as a business expands, they expect to see more benefits and some chance to share in business success through a bonus scheme. They also look to the future to work out how they can progress to more interesting and senior work. Busy directors need to remember to paint a positive picture about the future and how that will be good for their employees if they want them to commit to staying in the business for the longer term.
2. Can incentives be effectively used to retain the best members of staff? If so, what are the most effective incentives to achieve this goal?
Many small employers operate bonus schemes for their staff. It’s important to consider whether you want to reward individual performance or allow all employees to share in the overall success of the business through a business wide bonus payment. Recent studies show that many employees place great value on flexibility and a good working culture (i.e. a workplace that makes them feel valued and welcome).
3. With a labour market that is in flux, is there a risk that employees and their demands become the driving force within a small company?
I don’t think so. Everyone knows that the job market is difficult, so a lot of employees are staying put. Employees become demanding when they don’t feel that anyone is listening to them, so good communication and a regular opportunity for everyone to talk about how to improve the way the business works can help to keep staff engaged.
4. Many employees feel that they don’t have a clear career path in the job. Is this still a major issue with staff retention?
It’s not as easy to ‘job hop’ as it used to be. You may not be able to offer promotion, but you probably can look for the chance to give someone a new task to do, or involve them in a wide range of work. Progression can be about new skills or knowledge as well as a specific move up the career ladder. However, if you don’t talk with staff about their development they are unlikely to appreciate the opportunities that your business can offer.
5. How can small business owner/managers develop loyalty within their companies? Why do some company employees feel an almost evangelical spirit towards their employers (Apple being a good example)?
Having a clear and compelling vision for the future of your business and making all employees feel part of achieving that vision has got to be at the heart of what you do. Apple is a good example of a business with huge enthusiasm at every level, led by someone who is passionate about technology. If it’s your business, you need to share your enthusiasm with your staff, and help them see how important they are to what you do for your customers.
6. If there were an equation for staff retention, what would that equation contain?
7. Is more flexible working the future of staff retention?
All the recent surveys on staff retention show that flexibility makes a big difference to employees at all levels. If you can help someone to balance all of their life responsibilities then you make it easier for them to come in and do their best for your business each day. There are lots of great examples of small businesses offering flexibility and the Sunday Times Top 100 Small Employers celebrates this each year.
For further information on how to retain your best people contact Rachel Stone on 0117 376 2066 or email firstname.lastname@example.org.
By necessity this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Article correct at time of writing.
Smith & Williamson LLP
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