How to Save Money While Keeping Your Best Employees
Written by Andrew Goldman for Gaebler Ventures
With small businesses, retaining and attracting the best possible employees is critical for long-term success. You may not have the financial capital available to offer your employees a lot of money, so you have to get creative in order to keep your best workers.
When a small business first opens, the most valuable asset is often the people responsible for starting the company.
This human capital is essential to the company's success and growth.
The CEO and other top directors often dedicate countless hours for minimal pay in order to get the small business off the ground. The reason the founders of a business are willing to put in so much work without much financial compensation is the desire for success, future financial rewards and the internal sense of fulfillment that accompanies this personal effort.
As the small business begins to grow, they bring on additional employees to help the company develop and succeed.
When additional employees are brought on board, it is particularly important that the new additions share the personal element that helped drive and motivate the founders of the business.
Oftentimes, the small business cannot afford to offer high salaries to the new hires, further illustrating the need to motivate their employees with methods other than cash incentives. This is not to say, however, that financial incentives are not a positive method for motivating employees.
Let Your Employees Make Decisions
Pride and ego are fundamental techniques of motivation for the human psyche, and small businesses can often offer these motivators more than their larger business counterparts. This requires distributing certain duties previously handled by senior members of the company. By offering employees the chance to work and experience senior-level decisions, your employees will feel they are achieving and learning activities they could not gain elsewhere.
Offer Educational Reimbursement
Another important way to retain employees is to offer educational reimbursement and certifications. By growing your employees and offering them the opportunity to improve their skill set, your company will benefit on several levels. First, your employees will get a sense that the company has a keen interest their success, which is a key building block for loyalty. Secondly, as your employees become more skilled in their area, your company will reap the benefits of their advancing knowledge.
This is a key factor for employee retention, and the costs of educating employees will be minimal when compared to employee turnover costs.
Give Your Employees Room to Grow
One of the first factors I look for when consulting a small business is their employee turnover rate. The costs associated with hiring and firing employees is tremendous. As a result, the small business owner should invest extra dollars in ensuring their employees are satisfied, learning and growing.
Often, the main reason most exceptional employees are dissatisfied with their job, is an inability for them to personally grow with their experiences. Of course money and other factors are also considered, but the majority of unhappy employees simply outgrow the company.
The most successful small businesses I have visited put forth a significant effort to grow their employees and ensure they are a part of the business model.
Andrew Goldman is an Isenberg School of Management MBA student at the University of Massachusetts Amherst. He has extensive experience working with small businesses on a consulting basis.
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