Business Credit
3 business scenarios that need money to make money
According to a recent study by Future Workplace and Kronos, 87% of employers said that improving employee retention is a top priority in 2017. Losing a team member can be costly to any business, but particularly so for small business owners whose teams are already pulling more than their weight. In addition to the more obvious costs of an employee's departure-time spent locating and training a replacement, for example-small businesses are more vulnerable to the hidden costs of employee attrition. A small staff is more likely to feel the added strain to its resources than is a larger one, and also tends to be more sensitive to fluctuations in morale. With that in mind, it's well worth it to take the time to proactively develop a thoughtful management strategy that encourages employee retention while also protecting your business against the fallout associated with a team member's departure.
Due to the size of their workforces, small business leaders have the opportunity to take a relatively "high touch approach in their management strategy. As Jasmin Donovan of Dick's Drive-In states, "Invest in your employees. It's the best investment you'll make." Seize on this advantage by thinking beyond a one-size-fits-all approach for your employees.
More often than not, small businesses don't have the capital to lavish their employees with extravagant salaries and benefits. Fortunately, pay is only one way to incentivize employees, and not necessarily the most effective one to improve employee retention. Instead, investing the time in understanding an employee's values and goals will reveal the wide variety of tools at your disposal for keeping them engaged. Dick's Drive-In offers benefits to its employees including scholarships to pursue any educational topic they'd like, as well as reimbursements for four hours of community service a month. Rather than assuming what your employees prioritize, ask them directly what is most important to them and consider what it is possible to accommodate.
Critically think beyond "benefits in the traditional sense, and probe at what's most important to your employees both in the short and long-term. That may include things like: the option for remote work, increased paid vacation time, upward mobility, increased responsibility, or the opportunity to acquire certain new experiences and skills on the job. Engaging employees in these conversations on an ongoing basis is an easy way to do a pulse-check with your staff, but also signals to your team that you're invested in and supportive of their goals.
It's no secret that "a great culture attracts great people-and keeps them around. Leaders wield significant power when it comes to creating culture, and that influence is outsize at a small business where leaders inevitably have higher visibility. It's easy to get stuck speaking about culture in platitudes, with buzzwords like "collaborative and "innovative. It's a missed opportunity, though, to skip thinking strategically about the way your company's culture shapes the behavior and attitudes of your workforce. Doing so is an important step for reframing your efforts at engaging and retaining employees.
Culture shapes how employees work together. As a leader, you can drive these norms through your own example. These behaviors can permeate quickly through your small business. Think closely about the norms you set in terms of communication and feedback, and in your openness to new ideas. Tap into your team to solicit feedback on their perceptions of the culture you create, and you'll achieve two worthy objectives: you'll gain valuable insights into their experiences, as well as begin to create a culture where soliciting feedback is not only normal, but encouraged.
As an added bonus, a strong culture can help to immunize small businesses from some of the adverse impacts that can occur when an employee leaves. In the absence of a company culture that they identify with, individuals may shape a culture amongst themselves. Subsequently, when someone leaves, it can have an outsized ripple effect through the organization.
Building a culture that encourages and rewards good management is particularly critical. Employees most often leave managers, not companies, yet most businesses fail to prioritize good management. From the employee's perspective, their direct manager is typically the individual who holds the greatest influence over their day-to-day experience at work. An effective manager can be an incredible source of motivation, career development support, feedback, and even mentorship.
Problematically, many managers are given the extra responsibility of people management in addition to their own work without a great deal of training to prepare them for the necessary adjustment in work style. Managers need to understand the importance of their role, as well as to feel accountable for executing their managerial duties as well as they do their other responsibilities. To create a culture of good management, it is incumbent upon small business leaders both to set a positive example by attentively managing your own direct reports, but also to recognize and reward good management amongst your team.
Just like cross-training in a variety of sports can improve the overall skill and agility of an athlete, giving your employees the opportunity to expand their breadth of knowledge and experience can be of great benefit to both the employee and employer.
In providing opportunities for employees to cross-train across different functions, you ensure that critical knowledge and skills are shared amongst your staff. In doing so you:
In any instance of cross-training, be sure to gain employee buy-in by engaging them in a dialogue and communicating what you hope the benefit to them will be. Be thoughtful to provide development opportunities wherever possible that align with the employee's own goals.
Remember that no matter what you do, there will always be turnover amongst your staff and difficulties with employee retention - and that's OK! Clinging onto employees whose goals no longer align with your own isn't productive for you as the employer, or for the employee. Loyalties, culture, and benefits aside, sometimes change is for the best. As a leader and manager, it's your job to act as a bulwark during these moments. By building an infrastructure that values individual difference and creates a culture of communication, effective management, and ongoing learning, you'll prepare yourself and your staff to move forward with confidence.
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