How to Increase Employee Retention at Your Small Business
Editor's note: This article was written by Brian King, co-founder and CRO at Rain Retail Software.
Some are calling it “The Great Resignation” while others refer to it as the “Turnover Tsunami.” Whatever you call it, there’s no denying that many employers have faced unprecedented turnover rates since the start of the COVID-19 pandemic.
In the past, we’ve seen employees hesitant to leave their jobs (and accompanying salaries) for new opportunities. Now, voluntary departures and resignations are on the rise and many are blaming pandemic-related burnout for the upward trajectory.
Employee turnover is pricey for a number of reasons. Recruiting and hiring new employees is both finance- and time-intensive. Each time a seasoned employee leaves your ranks, they take their unique skills and competencies with them which can harm your team’s overall efficacy. For a main street retailer who may only employ a small number of individuals to begin with, it’s especially crucial to retain employees over time.
There are a number of ways to increase employee retention at your small business, from elevating your hiring practices to equipping your team with effective technologies such as a streamlined POS system. In this guide, we’re going to cover four strategies to increase employee retention in 2022 and beyond, including:
- Hire effective employees from the start
- Free your employees’ schedules from administrative tasks
- Create processes to limit customer conflict
- Offer workplace philanthropy opportunities
Whether you’re gearing up for a spring hiring push or simply hoping to improve employee satisfaction, there’s no time to waste when it comes to increasing employee retention. Let’s get started.
Hire effective employees from the start
If you’re looking to keep employees for the long run, it’s important to hire the right employees to begin with. Onboarding can be costly and the last thing you want is to invest thousands of dollars to train an employee just for them to churn after a few months.
This article on leadership recruitment offers a few tips for recruiting and hiring talented employees. In summary, you should:
- Focus on responsiveness in the hiring process, including letting candidates know when to expect responses, setting up automated emails, and notifying candidates when they’re not chosen.
- Promote diverse hiring practices to ensure all applicants have a fair chance at roles.
- Perform background checks to effectively screen candidates, customizing them to your company’s unique hiring needs.
- Write detailed job descriptions that include the core functions, soft skills, hard skills, and personal qualities that align with the role.
This last suggestion from the article focuses on workplace satisfaction. Job satisfaction is very important to employee retention and we’ll address remedies for the remainder of this article. Overall, bear in mind that recruiting the right individuals from the start will empower you to invest time and resources into those who will bring the most value to your business.
Free your employees’ schedules from administrative tasks
Think back to why you started your business. Perhaps you’re a lifelong musician, sports fanatic, quilting aficionado, or fashionista. Whatever your interest, the reason you started your business was because you’re passionate about a niche topic. You wanted to build your business around your interest and connect with local customers.
When you hired employees, you sought to attract individuals who also share that passion, whether musicians, class instructors, artists, or whatever craft they may excel in. And in turn, they wanted to work for your business because it meant that they could spend time focusing on a subject they love—not because they want to spend day in and day out tackling administrative tasks.
Equip your team with effective retail management technology that limits the time they need to spend on administrative tasks. The most important tool when it comes to this is your point of sale software. Seek a POS that allows employees to:
- Quickly and easily checkout customers with streamlined navigation.
- Automatically update online inventory in real-time as items are purchased in-store.
- Easily track any rentals, service orders, class registrations, and other nonstandard purchases.
- Send notifications for service reminders, class reminders, and even marketing efforts.
- Fill online orders without needing to use a secondary eCommerce solution.
Beyond seeking a general retail POS to simplify administrative tasks, consider seeking a POS that has features created for the specific type of business you run. For example, a music retailer could improve the employee experience with a music store-specific point of sale solution. This specificity would come with features such as a direct integration with Reverb, the most popular music eCommerce retailer. This would make it easier for employees to list items on that system.
Create processes to limit customer conflict
Let’s say someone came in to purchase a highly-specific, one-of-a-kind item and learned that it had just been sold to an individual who stopped by just minutes before. The customer was upset, feeling like they’d wasted the trip out to your shop only to leave empty-handed.
How do you think the employee who handled the conflict felt about the situation? We’d guess that they handled it in a professional and kind manner, but even so, they probably didn’t enjoy managing the encounter.
It can be a headache for employees to manage unhappy customers. And, if it happens frequently enough, your employees may look elsewhere for a job that is less customer-facing.
If you create processes with the goal of limiting these unhappy interactions, you’ll have happier employees. Consider the following:
- Automate reminders and notifications. For example, say you run some sort of classes outside of your business, such as a dive shop that offers guided excursions. If customers don’t show up on time for their classes, they could miss out on the experience and get cranky as a result. Avoid this outcome by sending automated text message reminders via your dive shop POS system so customers don’t miss out.
- Track customer loyalty program details using technology. While customer loyalty programs are a great way to reward frequent customers, it’s hard for employees to remember who has earned which rewards and when. The last thing you want is a conflict between an employee and a long-term customer when the employee forgets that the customer has earned a reward. Instead, use your POS to track customer loyalty points and even set up notifications so employees are alerted when someone earns a reward.
Other tips previously mentioned in this guide, such as the real-time sync between your website and store inventory, can also go a long way in improving customer—and with it—employee satisfaction. Generally speaking, elevating your store’s operations overall will create a better experience for those shopping and working within it.
Offer workplace philanthropy opportunities
Hiring predictions for 2022 see culture taking “center stage” when it comes to job seekers’ priorities, with company values and culture in the top three influencing factors for whether a job seeker accepts an offer.
There are a number of factors that make up company culture, from diversity representation, to PTO policies, to how the company prioritizes corporate social responsibility (CSR). Let’s focus on the third option in the list—CSR. According to Double the Donation’s guide to employee engagement, “Offering generous and inclusive CSR programs is one of the top drivers of employee engagement because employees are more likely to be happy working for a company that contributes to social good.”
There are a few different CSR initiatives you can incorporate into your company’s operations, including a:
- Volunteer Grant Program: This type of program involves your company making donations to a nonprofit organization corresponding to the number of hours that your employees volunteer with the organization.
- Matching Gift Program: This type of program involves your business making a donation to a nonprofit that corresponds with gifts that your employees make. According to re:Charity’s guide to matching gifts, these matches could run from a 1:1 ratio all the way up to a 3:1 ratio, depending on what you feel comfortable giving.
- Run/Walk/Ride Sponsorship: This involves creating a fund through which you sponsor the registration fees for any Run/Walk/Ride fundraisers in which your employees want to participate.
Whichever programs you create, CSR initiatives show your employees that you not only care about the local community in which your company operates, but that you want to encourage them to pursue their philanthropic goals personally as well. And as a bonus, it can increase your company’s public perception too.
Closing thoughts
Incorporating these strategies is a great way to increase employee retention for your main street retailer. And, if you’re looking for more solutions, consider simply asking your employees for feedback on what could be improved.
They may give you great feedback about desiring more training opportunities, benefits, or company-wide social events. When they give you this feedback, listen to it and evaluate whether you’d like to incorporate it. Even if you choose not to move forward with it, explain why—they’ll appreciate the effort regardless.