The potential loss of skilled team members isn’t simply an inconvenience. For SMEs, it can be costly to go through the recruitment and training cycles repeatedly. High staff turnover affects the business reputation among potential future employees too. This diminished talent pool will lessen the competitiveness of a company within the marketplace. It also affects the morale of those team members left behind.

Small businesses can often feel at a disadvantage when it comes to employee retention because their size limits their ability to financially reward talent.

However, it is entirely possible to build a stable and efficient team if you manage the process well.

Start off on the right foot

One key way to ensure better employee retention rates in your small business is to look at your recruitment process, long before the employee even works for you, let alone thinks about leaving. While there are many varying reasons why people leave a company – from culture, to demotivation, to money – a lot of them can be traced back to incorrect expectations laid out during their hiring.

So, take a good look at your job advertisements. Do the roles match the eventual work that your staff end up doing? Will they feel that their skills are being utilised properly? Look at the way you communicated your organisation and the job itself. Would the wording have attracted ambitious people? And if so, are the roles in your business going to offer the diversity and challenges necessary to keep such people engaged? Look to your branding and reputation, ask people outside your business for honest feedback. Are you being misrepresented or attracting the right people to join your team?

When employees do arrive, start their journey the right way with an open and welcoming atmosphere. Encourage feedback. Make them feel valued. Put the effort into policies that are binding, so they know that bullying and bad behaviour is not tolerated. Teach them your company values and make sure they’re meaningful to everyone in the team. If you can, involve them in the direction of the business with planning days and suggestion systems.

Short-term cost versus long-term cost

One of the issues often cited in SME employee retention is the inability to compete with bigger companies in terms of salaries and benefits packages for staff. While this may be the case, it is important to work out what the actual costs are. This involves calculating how much it would cost to increase salaries and benefits, how much of this could be offset in taxation and how this all compares to the cost of consistently recruiting and training new staff (bearing in mind that trained employees work much more efficiently than new recruits).

Many job applicants can be happy to take a lower than industry average salary initially but they will want to see that their worth and value is rewarded as they help you to grow your business. So, a scaled system for pay rises can work well, as can clear promotion pathways which demonstrate that you will allow your team to be included in reaping the rewards of a profitable, growing business.

Rewarding beyond salaries

Of course, financial reward is only one element of the benefits people get from their work and many employees will actually rate it lower on their importance scale than business owners imagine they do.

As the leader, you are able to nurture an environment where people feel able to share ideas, where they can give open and honest feedback and feel supported when they ask for help. You can cultivate a culture of knowledge exchange, or hard work that is balanced with fun, and ensure regular meetings and communication takes place so that everyone is aware of the overall goals and how their individual skills and outputs are helping to achieve the bigger objectives.

Most importantly, you can be kind. You can provide ongoing feedback to your team. You can highlight their achievements and encourage their work. Celebrating everything from the big professional successes to the small personal milestones – like birthdays – can keep employees motivated, loyal and ultimately, happier.

Offer flexibility and nurture trust

One thing that money can’t buy an employee is time. Big salaries do not compensate for people feeling chained to their desks all day. Nor does it make for a contented workforce. In a small team within your growing SME you could look at the ways in which you might be able to exchange financial reward for flexibility. Not only does it show a commitment to employee welfare, but it can lower stress levels and increase trust dramatically.

Technology is enabling us to take the office anywhere so you can allow employees to take personal days at home, to work around things like medical appointments or courier deliveries. This can actually increase their productivity that day by reducing time spent commuting. You might be able to offer roles working remotely so that people can travel or move towns/cities. Benefits such as offering to pay employees for their time committed to local volunteering projects or furthering their education can also be a huge perk for them, while simultaneously improving your standing within the community as part of your wider Corporate Social Responsibility work.

Fresh eyes and new ideas will certainly benefit any small business from time to time, however your company will need a solid, stable group of experienced and knowledgeable employees behind it in order to make those new ideas a reality. Working proactively towards better employee retention will help to ensure that the fresh minds coming into your SMR are on your time frame and terms.

Jerome Forde is a HR and employee relations specialist with almost 30 years’ senior-level experience in complex public, private and not-for-profit organisations. Jerome founded FordeCloud, a HRIT platform that uses the most advanced cloud technology to bring a virtual HR office to start-ups and SMEs.