NEW YORK — A tight labor market and a shrinking pool of talented workers make “I’m quitting” some of the most dreaded words a small-business owner can hear.
Staff turnover is a fact of life, but it’s particularly painful at small companies competing with larger businesses for workers. Owners learn they must make staff retention efforts a priority — including mentoring or changing workplace policies — and do some soul-searching if turnover increases.
When five out of 22 staffers left Dash Design last year, owner David Ashen understood that some naturally wanted to move on to new challenges. But he also discovered after talking to employees that they felt the culture in his New York-based interior design company had changed since he brought in a new business partner. Ashen realized he needed to help employees feel more connected to the business, and focused on mentoring younger staffers.
“We ask them, where do you want to be in six months or three years, and create a path to do that. When we failed to do that, people were less satisfied in their work,” he says. Ashen has also started letting workers have flexible schedules and bring their dogs to the office.
Owners find that one big thing they can do is be clear with younger workers who want to know there’s a chance for them to grow and develop new skills. Jeff Rizzo and business partner Matt Ross aim for each of their 10 staffers at product review website RIZKNOWS to understand what they need to do to win a promotion or a raise.
“If employees do not see a clear career path or opportunity for advancement, chances are they’ll look elsewhere after a year or two,” Rizzo says.
Many of the employees at the Reno, Nev.-based company have been hired straight out of college. Rizzo is philosophical about young people wanting to try something new eventually — but, he says, “we’re going to fight like heck to keep them.”
Companies that want to reduce turnover need to let employees know they’re valued and that what they do matters, says Leigh Branham, owner of Keeping the People, a human resources consultancy.
“People want to feel their job is meaningful,” Branham says. He suggests telling staffers, “I want you to know why you do what you do — and why it’s important to this company.”
Staffers also need regular feedback, and not have to wait for an anxiety-provoking annual review, says Nina Velasquez, a senior vice president at North 6th Agency, a public relations firm based in New York and with offices in Toronto and Boulder, Colo. North 6th Agency gives its nearly 60 employees monthly feedback that is intended to be part of their training and development.
The company also has a rewards system allowing staffers to accumulate points in return for good performance. The points can be redeemed for perks including cash, commuting passes, groceries and time off.
When staffers say they’re leaving, some owners will try to persuade them to stay, offering money or benefits such as flextime and working remotely. Sometimes it works, but Casey Hill, who uses freelance artists, graphic designers and videographers for his board game manufacturer, Hill Gaming Co., finds the opposite is true.
“By the time staffers inform you they are leaving, 95 percent of the time it is too late,” says Hill, whose company is based in Camarillo, Calif.
His suggestion: Always know what your next step is when a worker leaves.
