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Build a Culture That Increases Employee Retention

Matt D'Angelo
Matt D'Angelo

Three million Americans quit their job each month, and more than 50 percent of all organizations globally struggle to retain their most valuable employees. Jumping from company to company has become the norm for U.S. employees, so how can small businesses combat employee turnover?

"Many leaders look first to throwing money at the problem and either try to compete on pay or by offering cool perks they think will improve the culture, like foosball and beer," said Heidi Mausbach, CEO of Omaha-based digital marketing agency Ervin & Smith. "Neither really get at the root of the problem, which is making sure you have a strong employer brand and employment value proposition."

An employment value proposition is the intangible benefits and experiences your workers gain from the skills and services they offer your business. It moves beyond monetary compensation and into experience and knowledge that will follow them throughout their career. Mausbach argues that engaging employees starts with recruiting the right workers and providing an EVP that's in line with your brand's overall identity. 

Regardless, if you have a worker retention problem, providing more compelling compensation packages and financial benefits isn't the most effective way to fix the problem. It's an important aspect of worker retention, but it's only one dimension. Worker retention is as much a problem of culture as it is of compensation. If your business is experiencing high turnover, analyze your business culture and consider the opportunities you can provide employees for career growth and development.

Building better culture

Ervin & Smith was named one of the best places to work in 2017 by AdAge. Mausbach said that building a better business culture is key to keeping employees engaged. By increasing engagement, you can drive worker retention. A Gallup study found that employees who are engaged at work are 59 percent less likely to look for a different job in the next 12 months.

"Evaluate your employee experience," Mausbach said. "Intentionally build every aspect of the employee experience – leadership, environment, operations, technology and tools, and culture – to tie back your employer brand and EVP." 

Building a better business culture doesn't mean providing employee perks, like ping pong tables. It means recruiting workers who fit your organization's vision and providing employees with autonomy. Large companies like Netflix provide employees with unlimited PTO and other benefits. This stems from an inherent trust in their workers, which is a lesson that can apply in small business situations as well.

By trusting your workers and treating them like adults, you promote engagement and push them into situations where they can go the extra mile and reap the benefits. Providing responsibility, and aligning business practices with core values, can push your business toward a better culture.

Providing clear paths for advancement and other leadership benefits can also help with worker retention. Nick Crouch is a Tropical Smoothie Cafe franchise owner, alongside partner Glen Johnson, in Florida, Georgia, Texas and Arkansas. Crouch's employees at his smoothie shops are younger and paid hourly, but he has implemented several incentives and practices to drive retention. He likes to prioritize advancement so workers feel they are working toward a promotion.

"We always look to promote from within whenever we can," he said. "I think a constant communication around that and [keeping] our culture top of mind at all times has been successful for us. We retain great employees by providing advancement opportunities with continued growth and development, and communicate that with our team members on a regular basis."

Other tips for increasing engagement

Besides analyzing and revamping your business culture, there are several other ways you can keep employees engaged and decrease turnover.

Anne Brackett, chief engagement officer with Strengths University, is a certified Gallup Engagement Champion who has worked with hundreds of employees on engagement throughout her career. She said it's important for small business owners to remember that managing employees is part of the job.

"It seems easier to put supervision on the back burner, but in the long run it's not," she said. "Early in my career, if I thought there was a staff issue brewing, I'd do my best to ignore it … This rarely worked and caused me way more problems than being on top of the issue. Delegate all the tasks you can, and spend a good portion on managing what is most likely one of the biggest expenses in your business – your staff." 

It may seem like an obvious concept, but it can be easy to get caught up in day-to-day tasks, making employee problems just another headache to tackle. Brackett said it can be helpful for small business owners to discuss employee progress regularly.

"Even if an employee is doing well, the annual review is frequently the only time that person is told so," she said. "Meet with your employees regularly to discuss their successes, what they need to improve on, ideas they may have to improve the company, and even ideas they have for building their skills."

Providing the right incentives

While building a solid business culture and promoting employee engagement is important, other incentives can help keep employees at your company. Keep in mind that this is an important aspect, but not the magic solution to a systemic employee retention problem. Employee salaries should be competitive, and introducing supplemental awards and contests can help with retention.

Crouch said that he provides various incentive programs, like a Standout Team Member of the Month award. This award includes a cash prize as well as Tropical Smoothie branded items, like bags or coolers. He also gives away concert and sporting event tickets to top performers. Small perks like these can help remind employees that they work for a company that cares about them.

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Matt D'Angelo
Matt D'Angelo
Business News Daily Contributing Writer
I've worked for newspapers, magazines and various online platforms as both a writer and copy editor. Currently, I am a freelance writer living in NYC. I cover various small business topics, including technology, financing and marketing on and Business News Daily.