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1. Start with a Better Onboarding Process
Work Management
Last modified date

Jan 17, 2023

12 Steps to Increase Employee Retention as a Small Business

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Magnus Eriksen

Blog average read time

7 min

Last modified date

January 17, 2023

If you’re a small business owner, you have to face an important truth: keeping top-tier employees at your organization is tougher than ever, given the increased competition and other economic factors.

At the time of this writing, the nation and its small businesses are still in the grips of the Great Resignation.

Employees are leaving businesses at record-breaking numbers. According to a report from the Bureau of Labor Statistics, 4.25 million people quit their jobs in January 2022 compared to 3.3 million in January 2021.

If you want to keep your stores staffed and avoid other problems, you need to know how to increase employee retention across the board. Let’s take a look at 12 strategies you can implement starting tomorrow.

1. Start with a Better Onboarding Process

Improving employee retention often begins with a streamlined, supportive onboarding process. In fact, the right onboarding process can do a lot to keep excellent employees at your company beyond the first few months.

Onboarding includes:

  • The initial HR orientation meetings for a new hire
  • The first few days or weeks during which the new employee learns the ropes of their responsibilities
  • The training programs or materials you have the new employee go through

If onboarding is smooth and supportive, employees will feel welcome and appreciative.

The opposite is true if your onboarding process throws employees into the proverbial deep end and expects them to figure things out by themselves.

To improve your onboarding processes:

  • Ensure that your tutorials and training materials are informative, educational, and easy to understand
  • Don’t give new employees a ton of responsibilities in their first few days of work
  • Consider assigning a mentor to each new hire to give them advice and help them get settled in

2. Implement Mentorship Programs

Speaking of mentors, mentorship programs offer excellent opportunities to improve employee retention. As noted above, a mentorship program can do a lot to bolster the onboarding process for new hires.

With a mentor to assist them, each employee will feel supported and have someone to ask questions to if they ever have concerns or become confused.

Furthermore, mentorship programs give your current employees opportunities to showcase their leadership skills, which can tie into promotional opportunities (see more below).

3. Ensure Your Pay is Competitive

Another great way to increase employee retention in a small business is to ensure your payment is always competitive relative to similar businesses in your area. After all, most workers—even if they love their industry or the brands they work for—work primarily for money.

Therefore, you need to make sure that excellent candidates are attracted to your business for the paycheck instead of a competing business. Review your salaries every quarter, and be sure to give cost-of-living raises that account for economic inflation.

The more competitive your pay is, the easier time you’ll have attracting great candidates for your open positions.

Of course, this is easier said than done. With many businesses facing severe financial crises, sometimes requiring government intervention – such as special loans for the COVID-19 pandemic – it’s tougher than ever to pay employees higher wages when considering all the other factors that go into running a business.

Still, try to make your pay as competitive as possible. This is the number one way to attract great talent to your company on paper.

Once you’ve attracted candidates and brought them to the negotiation table, other aspects of your business, such as its culture, perks, and so on, will hopefully seal the deal.

4. Offer a Better Work-Life Balance

These days, many employees want more than just a good paycheck. They also need an excellent work/life balance from their employers.

Implementing flexible scheduling at your organization ASAP is the easiest way to do this. If possible, give your employees the opportunity to work remotely some or all of the time, depending on their exact responsibilities and how often they need to be in the office.

This is more easily implemented in certain small businesses, of course. For example, if you have a retail storefront, some employees will always have to be “in the office” to sell products, man the registers, and talk to customers.

Even so, a strong work-life balance will attract candidates to your business like never before, plus help you retain excellent employees over the long term. Even if your competitors offer slightly better pay, if you provide a better work/life balance to your employees, they’ll be less inclined to jump ship for that competitor since they know you are more generous with work hour flexibility and time off.

Alternatively, you can offer a better work-life balance than competing small businesses and retain employees more easily if you’re simply more flexible regarding sick time or paid leave. Things happen, and many of your employees will want to start families.

If you can implement paid time off for new mothers and fathers, for example, you’ll attract these hard-working parents to your brand, and they won’t leave your small business or LLC since they know the benefits they receive from sticking around.

5. Boost Workplace Culture

Workplace culture can have an outsized impact on how comfortable the office is, how strong the social ties are, and how much your employees want to stay for the long haul.

If you have a strong workplace culture, your employees will feel like they are part of the same team, everyone will support each other, and people will show up to the office ready to give 100%.

If your workplace culture is less than stellar, your employees may be more inclined to look for another job at the earliest opportunity. You improve your workplace culture by:

  • Not allowing any workplace harassment or bullying under any circumstances
  • Being a leader by example (not flaunting your power or privileges)
  • Helping your employees work together and emphasizing teamwork and all of your operations
  • Following some more of the tips below

6. Implement Office Amenities

For instance, implementing new office amenities can do wonders for both employee morale and workplace culture. Say that you add a new coffee station for all your office workers.

That coffee station is both a fun perk for your workers and a place for your employees to congregate, chat and form friendships that will translate into better workplace performance and an improved workplace culture overall.

Try to add office amenities everywhere you can – the more comfortable your office is, the more comfortable people will be working there. An in-office gym, a yoga space, or even new desks can feel like major improvements and translate to better workplace performance in no time.

Your employees won’t want to leave a small business where they can enjoy morning yoga before hitting the desk, after all!

7. Maintain an Open Door Policy

As a business leader, it’s up to you to maintain an open-door policy so your employees feel that they can approach you with a question or concern at any time. This can improve employee retention in many important ways.

For starters, it always leads to better workplace culture, as described above. If your employees feel that they can trust you with their concerns, they’ll be more likely to alert you to bad employees, inappropriate behavior, or other problems you’ll be better off taking care of ASAP.

Furthermore, an open-door policy helps to show your employees that you care about them beyond what they can produce for your brand. Rather than sequestering yourself in an office and never accepting appointment requests from your workers, meet with them regularly, work with them on projects, and offer your feedback often.

If you seem like part of the team, you’ll feel like part of the team, and employees don’t want to leave companies with leaders who are “in the trenches” with them.

8. Host After-Work Get-Togethers

After-work get-togethers, like Friday cocktail parties or holiday parties, are excellent for fostering a sense of office camaraderie and helping your employees build friendships that will make employee retention much easier to pursue.

Try to host after-work get-togethers or team-building activities, such as cocktail hours, restaurant meet-ups, escape room adventures, and more, about once per quarter at least. Doing this will allow your employees to meet outside the workplace, forming bonds that may translate into better team productivity and efficiency when clocked in.

In addition, after-work get-togethers let your employees meet each other when they might normally not. For example, people from two different departments may never interact aside from across the computer screen.

But at a social event organized by the workplace, they’ll form new friendships that inspire them to stick with your company through thick and thin.

9. Provide Feedback to Employees

The more feedback you provide to your employees, the more you’ll retain those excellent employees over the long term. That might sound counterintuitive, but it is true.

Why? Your employees want to feel that they’re improving their skills and professional capabilities while at your brand. They can do that if you never offer them feedback, positive or negative.

Therefore, combining this tip with your open-door policy will help you make your workplace feel engaged in their progress, not just the progress toward your financial benchmarks.

Of course, you shouldn’t be rude or harsh with your feedback. There’s an art to giving good feedback to your employees that makes them feel appreciated and heard while also highlighting areas where they can improve.

If you master the art, employees looking for progression opportunities will be more likely to stay with your company instead of leaving for a competing brand.

10. Offer Promotion Opportunities

Speaking of promotion opportunities, be sure to offer these to rockstar employees who want to improve their skills, gain credentials, and maximize their earning potential at your brand.

Don’t worry about replacing them – if you’ve followed the other tips in this guide, you’ll have no trouble finding new hires to replace the people you promote.

Even better, promoting excellent employees bolsters your leadership team and gives you opportunities to expand your brand in new ways.

Regardless, you can increase employee retention as a small business by giving your employees a chance to earn promotions and new responsibilities.

Many go-getter workers aren’t satisfied with treading water at small businesses. Suppose they don’t feel that they have any opportunities for advancement. In that case, they may leave your company sooner than you think, especially if they realize they have the potential to earn a lateral promotion, i.e., joining a new company and getting an instant promotion as a result.

11. Show Public Recognition of Great Employees

Don’t keep it a secret when one or more employees do an excellent job. Try to show as much public recognition of excellent employees as you can.

Public recognition, such as an “employee of the month” award or even a special shout-out over email can do wonders for making those employees feel understood and seen in a positive way that will inspire further exceptional performance.

Top-tier employees want to be recognized – be sure to give them that recognition, and they will stick around to see what other accolades they can achieve.

12. Prioritize Diversity When Hiring

Don’t forget to prioritize diversity when hiring new employees, either. This is a great way to increase employee retention, particularly among diverse workers already at your company.

The more diverse your workforce is, the more comfortable minority employees will feel, as they won’t be at risk of isolation – intentional or otherwise.

Diversity is also important for ensuring that your company doesn’t have any biased or blind spots that can impact its services or products, which will eventually impact your reputation with your customers.

Prioritization of diversity happens right from the get-go with your HR department and recruitment team. Be sure to oversee the implementation of diverse hiring practices personally so that your efforts aren’t wasted.

Wrap Up

As you can see, there are plenty of ways in which you can increase employee retention as a small business. Consider how you can make your brand the best to work at, and you’ll attract top talent in no time.

Magnus Eriksen


Magnus Eriksen is a copywriter and an eCommerce SEO specialist with a degree in Marketing and Brand Management. Before embarking on his copywriting career, he was a content writer for digital marketing agencies such as Synlighet AS and Omega Media, where he mastered on-page and technical SEO.

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