If you’re like most small business owners, you’ve invested a sizable chunk of your company’s time and money into recruiting, onboarding, and training employees. Naturally, you do not want to lose good people — because then your investment is wasted. On top of that your business may be plunged into a mini-crisis by losing a great performer who is difficult to replace.
But the question on the minds of small business owners like me is, what exactly does it take to attract and retain good employees today? And can small employers compete with large employers able to offer bigger financial packages?
A recent survey has some good news. Among employers polled, the number one benefit offered was … drum roll please: paid vacation time. That is the top benefit that employers surveyed in the GrowBiz Media Small Business Hiring and Retention Survey 2012 said they offered their employees. Over sixty-seven percent (67.7% to be exact) said they offered paid vacation.
To me that’s not surprising — it doesn’t necessarily cost anything out of pocket to offer paid vacation. So it’s within the reach of more small employers to offer paid vacation than to offer benefits that cost additional out of pocket.
If anything surprised me, it’s the percentage of employers who said they do NOT offer paid vacation. I find it remarkable that in this day and age, nearly one third of the employers said they do do not offer vacation.
The Top 5 Benefits Offered
And what about other benefits? The benefits most often offered by small employers with between 2 and 50 employees include, in order:
- Vacation time – 67.7%
- Personal days off – 63%
- Health insurance – 57.5%
- Flexible working hours – 56%
- Bonuses – 55.3%
The Number One Retention Factor Is Not Benefits At All
But if you really want to know what keeps employees around in a small business, it isn’t benefits at all. It’s the relationship the employee has with management — at least, that’s what employers say. Those surveyed said the following were the top factors influencing employees to remain:
- Manager-employee relationships – 78%
- Company culture – 66%
- Employee benefits – 53%
The survey results did not include a question about salary, so we don’t know where pay fits into the mix.
No Upside to Burning Out Your Employees
When you look at this list, it shows you that investing in relationships and working conditions helps your business compete against larger employers for the available talent pool. From the employer side you are getting something good in return. Refreshed, happy, well-balanced employees are typically better performing. They are more likely to stick around longer term, meaning less turnover and repeat hiring, onboarding and training for you. As a result, your business runs more smoothly and there’s less churn. That’s good for business.
Let me offer an analogy: employees are an asset like anything else in your business. You wouldn’t run a valuable piece of equipment into the ground without maintenance, until it breaks and is worthless. Your employees deserve at least as much consideration and respect.
And remember: this is not asking employees what factored into their decisions to stay with their existing employers, but rather focused on what employers thought influenced employees to stay. Still, it points out that small business employers believe they have something to offer that employees want: good working relationships and a good company culture. Oh, and some benefits, too, especially quality of life benefits. View the full employer survey results.
Are you surprised? And employees, you’ve heard from the employers — now, what do you say?
Manager and Staff Photo via Shutterstock