A 2023 employee retention survey of Canadian SME employees revealed that just over 50% of those surveyed planned to leave their company at some point, with 24% saying they intended to leave within the next 12 months. Combined with the knowledge that the cost of replacing an employee can range from 50% to 200% of their annual salary, how can small businesses work to retain the employees on which they’ve invested time and money through the hiring and onboarding processes?
There are three main components to employee retention: Respect, Recognition, and Reward.
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Respect: It’s no secret that feeling respected is a cornerstone of employee engagement and retention. Without respect, employees are less engaged in their work and the company’s mission, which can negatively affect company morale and lead to higher turnover. Regular opportunities for employee feedback to management significantly contribute to feelings of respect.
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Recognition: Recognizing employees for the work that they do is a powerful motivator that allows them to feel valued for their contributions to the business. Recognition should happen on a consistent basis (not just during a yearly performance review), perhaps through initiatives such as recognition for tenure milestones, employee appreciation activities, and even just a note of appreciation for a job well done.
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Reward: Employees no longer consider only pay and benefits when considering a job opportunity. Both monetary and non-monetary factors, such as opportunities for advancement/career growth, performance bonuses, healthy work-life balance, and the ability to work remotely or on a flexible schedule, play a significant role in their decision.
Taking the time to determine how you can build these three components into your company culture provides valuable dividends in establishing and retaining your team, leading to the continued success of your business.
