Building Employee Loyalty
By: Kevin Caprio
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So how can smaller companies boost efforts to retain employees-and keep them happy and productive-without spending a lot of money?
By drawing on their unique strengths, namely flexibility and innovation. Here are five strategies earning high marks with employees:
1. Reward Good Performance
Besides upgrading employee compensation ranges to attract and retain workers, rewards and recognition programs can be used - and don't have to be salary-based or even financial in nature. Powerful recognition and rewards programs include public acknowledgement of an employee's efforts and results, a plaque or award, dinner for two, or a small spot-cash award of, say, $200. Show strong performers their efforts are appreciated.
2. Provide opportunities for professional growth
Many employees, particularly high performers, need opportunities for professional growth to feel satisfied with their jobs. Ask your key employees what motivates them from a career development standpoint, then find creative ways to provide those opportunities. Perhaps the employee with management aspirations can lead a project team or begin mentoring other employees. Don't assume that all employees want the same things or share your same interests and goals.
3. Create flexible work arrangements
Employee turnover can often be traced to work/life conflicts that can be easily and inexpensively remedied with flexible work arrangements. If a company does not offer part-time work schedules, telecommuting, compressed work hours, or some kind of other flexible work situation, an employee with child or elder care responsibilities may have little choice but to search for a company that does.
4. Provide retirement security
With the future of Social Security in doubt, employees are increasingly concerned with saving for retirement. Thanks to federal lawmakers' actions designed to make retirement plans more attractive to small companies, you have more choices than ever when choosing a retirement plan. Profit sharing, SEP, and SIMPLE plans are options that can fit both your budget and your employees' needs. Plans that provide for company contributions to vest over a period of years may also create an incentive for employees to remain with the company long term.
5. Enhance Health Care Benefits
Health care benefits are the most valued by employees, according to the Employee Benefit Research Institute. But they are also among the most expensive benefits to offer. Medical Savings Accounts (MSAs) can help ease the burden. Companies with fewer than 50 employees can offer MSAs (funded with tax-deductible contributions from either the company or the employee) if employees are also covered by a high-deductible health insurance policy. Employees then use their MSA funds to cover the deductible or medical care that is not covered by regular policies.
An employee retention initiative need not be costly to be effective. To get started, you might informally survey employees about their priorities and needs. n