How to Find and Retain Employees

It's frustrating to need help and not be able to find it. Many small business owners are encountering this issue, as illustrated by research from the National Federation of Independent Business (NFIB).

Of the small business owners actively looking to hire, 37% say that they're unable to fill open positions, and 85% encountered few to no qualified people for the openings they had (emphasis on qualified).

The best bet in this kind of job market is to retain the talent you have. There are effective strategies for ensuring the people on your team stick around, and it starts with solid hiring practices.

Finding qualified candidates

One potential solution to attracting more job applicants is to prioritize diversity in your hiring process. Make gender, ethnic, and cultural diversity within your employee base a goal and you may discover both a larger pool from which to draw and better business results. Consultants at McKinsey found a positive correlation between a diverse talent base and financial performance, not to mention lower turnover, higher customer engagement, and higher innovation and creativity.

Many businesses today use applicant tracking systems (ATS) to more efficiently manage the process of posting job openings, collecting applications, evaluating candidates, and communicating with them through the hiring cycle. Some of the most popular ATS are JazzHR, Rippling, and BreezyHR.

To maximize the number of potential applicants who see job announcements, consider posting available jobs on multiple hiring websites. There are major players, such as Indeed, as well as social media sites like LinkedIn, which has a Jobs section. But also consider sites specific to your industry or field, such as Practical Machinist for machinists, as well as professional organizations where your target new hires may be members, such as the Public Relations Society of America (PRSA).

Once you’ve received an application worth exploring, schedule an in-person or Zoom interview to gauge fit for the role and your company culture.

Interview basics

Before any interview, review the candidates’ resumes to become familiar with their specific experience and skills.

Then create a list of questions you’d like to ask. Some might be specific to past jobs they’ve held, their education, or items on their resume, but most should be behavior-based. These are situational and explore how the applicant thinks and reasons, as well as allow them to elaborate on elements of their resume.

Examples of behavioral questions are:

• Have you ever been in a situation where you disagreed with the course of action your manager told you to take? What did you do?
• Tell me about a situation at work where you had to work with someone you didn’t particularly like. How did you handle it?
• What was a mistake you made at some point in your career, and what did you learn from it?

Their responses should help you zero in on individuals who may be a fit for your company’s culture and expectations.

Once selected, your onboarding process should lay the groundwork for a long-term employment relationship.

Retaining starts with good onboarding

How employees are introduced to your company can have a big impact on their longevity. A positive experience and impression from day one can help reduce turnover simply by making them feel welcome.

Some of the best onboarding processes include:

• Frequent communication about their start date and available resources
• All work systems, online tools, and accounts set up in advance
• A new employee announcement sent company-wide
• A peer mentor assigned for the first few weeks

During those early days, make sure new employees understand expectations and feel appreciated.

Retention incentives

Good employees will likely receive offers from other organizations eager to have them jump ship for a new job. The best way to counter these offers is to make sure your employees are getting the majority of their needs met at your small business. Fortunately, there are a number of offers you can make to help your small business stand out when hiring.

One option could be to provide a financial incentive to stay, like through a multi-year contract or a long-term incentive plan. Businesses that recognize how essential some employees are may offer a bonus or payment for agreeing to stay at the company for a certain number of years, with that money needing to be repaid if the employee leaves within the contract window.

Vacation is another attractive element employees consider, so can you give them more days? Can you give them unlimited time off, as some companies have opted to offer?

Childcare now costs as much as 47% of a family’s income, according to the Department of Labor, so can you help reduce that burden? Subsidizing childcare costs is one potential incentive you can offer, or you could consider setting up an on-site childcare operation if there is enough demand.

Although money is important, it is not always the deciding factor. Some of the other considerations employees weigh include:

Advancement opportunities. According to the 2024 Voice of the American Workforce survey, 31% of job applicants put advancement opportunities at the top of their list of criteria for a new job. Small businesses that can communicate a clear path to advancement during job interviews may have a hiring advantage. Continuing to convey steps to the next promotion once hired is another important tactic.

Professional development. Similar to a clear path to advancement, many employees are eager for the chance to build or enhance their skills. As part of employee compensation packages, can you set aside funds for training and education? Can you bring trainers on-site to offer classes? Or can you offer education reimbursement? Providing a way for employees to enhance their worth as workers is another reason for them to stay.

Remote or hybrid work options. Employees who had the option to work from home during the pandemic may have grown to appreciate the flexibility such an arrangement provides. Workers with school-age children or who are caregivers may value the opportunity not to have to commute to a work site every day. If you are able to provide more flexibility, such as a four-day week, flex time, or a hybrid schedule, that may help you hold onto some of your team members. For some, flexibility is worth more than money.

Socializing. Facilitating connections between employees through regular social functions and activities helps forge relationships that make workers less likely to leave. Employees who like their boss and coworkers are much less likely to jump ship.

Employees who have established strong bonds with coworkers, have career and financial needs being met, and understand where their career could go within the business are much easier to retain. The good news is that small businesses are in an excellent position to provide those.