All SMEs should aim to keep staff turnover to a minimum to avoid losing key personnel and the expense of replacing them.
Does your company lose more employees than it should? If so, the problem should be addressed as elevated staff turnover can very quickly erode the value and competitiveness of your business.
For one thing, the cost of hiring new employees can be very high as firms need to account for the headline costs of recruitment, such as advertising and administration, but also takes into consideration a lower level of productivity in the short term from the new hire.
The latest findings from the Close Brothers Business Barometer reveal that over two fifths of all SMEs are worried about skills shortages. 34% said they were concerned about a lack of skilled personnel in their industry or sector, while a further 11% said there was a lack of expertise in their region. Given these difficulties, it makes sense to focus instead on staff retention. Consider the following five strategies to reduce churn:
Offer a competitive benefits package
You should be aware of what a competitive salary looks like for your employees by talking to recruitment agencies, industry associations and other bodies.
However, pay is rarely the be-all-and-end-all for employees. One recent study showed that a host of other benefits will also be crucial to retaining staff. These include everything from wellness offerings such as retirement planning or providing gym access, to other workplace perks such as occasional catered lunches or free snacks. But, crucially, working life is part of the package too; people are increasingly keen to work flexibly, with hours and locations that suit their home lives. If you can fulfil those wishes, your staff tenure may increase.
Communicate your business’s mission
The CIPD, the professional body for HR professionals, argues there is a clear link between employee engagement and higher staff retention levels. Employees who understand what their company is trying to achieve - and feel part of the mission - are less likely to leave. Make sure your staff know how they are supporting the business in meeting its aims and goals in order to develop a collaborative culture.
Invest in training and development
Given that skills shortages are such a problem, bringing your own staff’s skills up to the right level makes more sense than recruiting replacements. Results from the Close Brothers Business Barometer suggest two fifths of companies have invested in training over the past year in attempt to close the skills gap in their own organisations.
Investing in your workforce in this way will also boost engagement levels. It will help, too, if you’re able to promote from within wherever possible – that way, staff will recognise that you are investing in their personal development and they have a long-term future at your business.
Find out what your employees think
Research suggests many companies now conduct surveys to gauge staff sentiment, but they’re more common at larger companies than SMEs. Seeking feedback from your personnel will enable you to identify any issues before they become serious. Equally, when people do leave, exit interviews are an excellent way to find out how further departures could be avoided.
Hire an HR professional
As your company grows, consider taking on a human resources professional. With one person in charge of all employee-related matters, the rest of the management team will be able to focus on their responsibilities to drive the business forward. At the same time, professional HR managers will be more up to date on employment laws and trends, and will also bring specialist knowledge and experience to get the best out of your workforce.
*These statistics have been updated and are correct as of August 2020.
