In one survey, over 50 percent of small business owners identified hiring as their top challenge for 2022. I’ve talked around here about the coming labour shortage and why my preferred response is to look for alternatives to hiring and, if they have to, how small businesses can build a hiring pipeline.
Let’s dive deeper on why focusing on keeping good employees is a wise idea and discuss why small businesses should invest in employee satisfaction.
- Hiring is only getting more challenging
- Employee turnover is shockingly expensive
- Focusing on employee satisfaction is a good investment
I’ll end with some practical ideas on how a small business owner or manager can work on increasing employee satisfaction. This can improve employee retention. with the added benefit of enhancing the customer experience.
Let’s dig in!
Hiring is only getting more challenging
Here are some eye-opening employee turnover statistics that come from surveys of small businesses:
- 56 percent of small business owners struggle to find employees for their business.
- 52 percent of small business owners stated that the most important problem for small businesses was labor quality.
- 35 percent of small business owners believe that attracting the right talent is more difficult than it was five years ago.
Basically, small business owners say that it’s hard to find qualified individuals to hire and one of the top challenges that small businesses face is the poor quality of labor. What stands out is that the problem is becoming harder. It’s becoming more difficult to find staff than in the past.
Employee turnover is shockingly expensive
So hiring was always hard, and is getting harder. It doesn’t end there. I was genuinely shocked when I saw the cost of hiring and training a new employee.
Take a look at these three statistics:
- Employee turnover is at an all time high.
- It can cost $2,000 to hire and train a new staff member.
- It can cost up to $15,000 to hire and train a new manager.
It’s striking that employee turnover is at an all time high, especially when the cost of replacing employees is $2,000 for staff and $15,000 for a manager. It becomes fairly clear that small business owners and managers need to spend time hiring and training the right employees, but also putting in place the structure and environment to keep them.
Focusing on employee satisfaction is a good investment
If you can avoid it, you don’t want to be waging war for talent right now. It’s difficult to get people, and expensive. There are things you can do, but they take time, effort and investment.
The solution I’m proposing is to increase employee satisfaction so that they are more likely to stay. Happy employees are less likely to leave. So here’s what employees said would make them happier at work:
- Over 60 percent of workers felt that a promotion would markedly increase their workplace happiness.
- 67 percent of employees would like to receive paid bonuses as recognition from management.
- 70 percent of employees reported that they would like hands-on training from managers.
- 40 percent of employees report a lack of team-building events and activities, and nearly a quarter are actively unhappy with how few team-building activities they have.
Those first two are obvious, pay more both in wages and salaries, but also reward staff with unexpected bonuses.
The type of employees that are golden to a small business want a sense of being, they want to improve their skills, and they want to feel a part of a team that they look forward to joining at work. Investments in these areas are worth strong consideration, and often have a high return for your investment.
I hope you are walking away from this post with a fresh perspective on the importance of employee satisfaction, especially in the current market.
There are ways to improve employee satisfaction simply by pulling out your wallet, but the unexplored ways that a lot of employees have said they value are hands-on training and team-building events. I think there’s a lot of potential here for small business owners.
I believe that happy, well-trained employees means happier customers as well. So it’s a win-win.
Do you have any valuable tips on how you improve employee satisfaction at your small business to share? Please let me know.
Before you go...
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