Key Employee Retention Strategies
It’s more important than ever to retain your key employees so that your business can continue to thrive. But how do you do that when there is so much competition for talent?
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Turnover happens, even to best-in-class organizations. But right now, companies of all sizes and industries are experiencing turnover like never before.
In April 2021, more than 4 million people quit their jobs. The next month, another 3 million-something did the same, and another 4 million left their jobs in July. Gallup research also shows that nearly half of all Americans are considering a job change.1 For small and medium businesses, this “Great Resignation” era poses an especially scary threat to their bottom lines — and the future of their business.
It’s more important than ever to retain your key employees so that your business can continue to thrive. But how do you do that when one out of every two employees is likely thinking about quitting?
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There are employees, and then there are key employees. For small- and medium-sized enterprises (SMEs), key employees are those who are critical to your success. They’re the ones who know the ins and outs of your business. They’re not just order takers and space fillers, but also the people who bear knowledge about your customers and operations. They have a tangible stake in your company and want to see it do well.
If business owners can keep their key employees around for a long time, it not only makes the business more successful in the present but also creates more value during an exit strategy.
In many cases, key employees have been employed with you for years and treat your business like it was their own. Such an employee is truly rare and extremely valuable. And when business owners are fortunate enough to find them, they need to do everything in their power to keep them on board.
Proactively seeking ways to retain your employees is the first step. Here’s a look at some generic strategies that many companies are doing right now to improve retention rates:
One of the top reasons why employees are leaving jobs in record numbers isn’t pay, but rather flexibility. The shift to working from home allowed millions of people to gain a better work/life balance. For those who are being called back to the office, reluctance is taking over. Workers report trading their morning and afternoon commutes for fitness routines, family time, household chores, and a number of other preferences. They had more free time that wasn’t wrapped up in work, and many don’t want things to go back to the way they were.
When workers find an opportunity that better suits their lifestyle, they’re likely to accept, even if it means being paid less or leaving a secure job. Employers of small and medium companies can address a large chunk of key employee retention simply by making more of an effort to preserve this work/life balance.
If working from home worked for your company, consider sticking with it or at least offering it on a part-time basis. And if remote work isn’t an option, there are other ways to help your key employees enjoy more freedom. Boosting your PTO policies, reducing work schedules, and respecting your employees’ time off (e.g., not emailing or texting outside of business hours) can go a long way in creating a better work environment.
When key employees are taking ownership of your business and know your operations inside and out, it’s easy to assume that growth is no longer on their radar. They’re already in deep with your company, usually managing others, working with a high level of autonomy, and maybe even making business decisions or suggestions.
The problem that key employees in these positions face is feeling like they’ve grown to the point where there’s nowhere else to go. They’ve reached an obvious height of success and might feel there’s nothing left for them to achieve. These feelings can often lead to the idea of pursuing something new, which means they’ll leave a gaping hole in your company.
Business owners that want to retain key employees should ensure that there’s always room to grow, even if it’s not by a job title. Offering growth opportunities and incentives, such as paid training to learn a new skill, working on a new project, or experimenting with a new business idea can help an employee to continue to feel valued. It keeps their work fresh and exciting, not to mention it will have them looking for new ways to contribute to your business.
A few bad hires can scare off your best employees. Hiring poor cultural fits, inexperienced staff, or employees that are not motivated to work force your key employees to take on more responsibilities. It distracts from their normal duties, and many times, they are constantly spending time training new people that end up leaving the company within a short time period.
While it sounds counterintuitive given the ongoing talent shortage, businesses need to become even more selective in the people they hire. Avoid the “McDonald’s Mentality” where you hire a person if the uniform fits. Giving your key employees quality new hires to train and mentor can lead to better synergy, higher morale, and less stress for everyone.
Last year at the onset of the pandemic, the theme among businesses everywhere was continuity: how can we keep business going in light of the ongoing situation? While things still aren’t quite back to normal, the theme has since shifted from business continuity to talent retention.
Focusing on key employee retention first can help you identify your most valuable employees and work toward their needs to keep them on board. And consequently, it also takes care of some of the business continuity issue. While turnover is bound to happen in any organization, your goal should be to prioritize the people who are most likely to keep your business healthy and moving forward.
Learn more about our key employee retention strategies and tips in our webinar!
1. Gallup Research2. Business Insider
There are employees, (pause) and there are key employees. Key employees are those who are critical to your business’s success. You know, the ones who have a dramatic impact on your bottom line? If they were to leave, well, that would definitely throw a wrench in your plans. These Key Employees are difficult to find and even harder to replace. So how do you make sure they don’t leave?
Most business owners try giving annual bonuses or raises. While those are likely necessary, studies show that these will only work for a short period of time and just aren't enough. If only there was a way to motivate a key employee to stick with you for the long run while they achieved their OWN long-term goals!
Enter Key Employee Retention Strategies... the hero of our little "familiar story." Key employee retention strategies match your employees’ goals and dreams to the growth of your business and help them as they help you. And the retention of a Key Employee will not only help you meet your current goals but also will make your business more valuable when you decide to exit or sell.
If this sounds familiar and you are looking for solutions to help you sleep better at night, consider downloading our complimentary white paper or attending one of our webinars to learn about some of these strategies to start on the path of retaining those employees who have the greatest impact on your business.
Have questions about how this works? Give us a call and we'd be happy to help you navigate this uncharted territory and help determine which strategies could be right for you.