Maximize Your Employee Retention and Save Big

By Thom Tracy

2 min read

Hiring and firing employees are two of the most difficult and expensive decisions small business owners must make. With a big dollar investment at stake, it’s imperative that you make every effort to [recruit employees] (https://www.thebalance.com/the-hiring-process-hiring-employees-in-canada-2948196) who are willing to make a long-term commitment to the organization. Retaining key employees not only saves money, but also shows prospective workers that your company is a desirable place to be. On the other end of the spectrum, terminating individuals repetitively has the opposite effect. A revolving door points to an inherent flaw in the organization, from both internal and external perspectives. As well, high employee turnover can be costly. To recruit and train a replacement worker, a company could spend up to twice the salary of the previous employee. Thus, consider the following strategies to hire and keep the right people on staff.

Recruiting

If you hire the ideal candidate up front, you’ll spend less time and money trying to get it right on the next try. The key to making the right hire unsurprisingly falls to the search and interview process. Education, skills, and experience matter greatly when it comes to hiring skilled labor. Your recruit’s background must fit the position, making a resume is an objective measure of ability.

Character matters and reliability is a strong indicator of this trait. It’s a good idea to look for candidates who haven’t continuously job-hopped, or who have held down a position while attending university or trade school. Whether you’re searching for skilled or unskilled employees, it is crucial to gauge how well a potential employee fits in with your existing employees. Skill and commitment do not guarantee that a new employee won’t be disruptive to co-workers and your business.

Benefits

Next to a competitive salary, employee benefit packages figure prominently into the recruiting equation. Things like group medical, dental, and vision insurance help attract and retain key personnel. The ability to think creatively and offer a comprehensive benefits package sets your business above the competition. Not only do insurances appeal to employees, ancillary benefits such as vacation time and tuition reimbursement help keep turnover low.

For example, one of the more popular arrangements offered by employers is a telecommuting option, where your employees can work from home for a day per week. The flexibility and freedom that comes with this schedule can help build employee morale. While benefits require a substantial financial outlay, the reward may outweigh the cost when you’re devoting time to business development and not constantly scrambling to hire.

Reviews

Annual employee reviews present opportunity for both employers and employees. This practice allows employees to have candid discussions with management regarding progress and opens the door for potential salary increases. Without any constructive feedback, your worker could likely become bored, complacent, and unproductive. Thus, make it a priority to schedule annual employee assessments to set goals, create expectations, and offer a little praise.

References & Resources

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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