How to retain employees in a small business

5 March 2020

As a small business owner, your people are a vital part of your business’ success. You’ve probably spent a long time building up a strong team around you who you trust to help your business achieve its goals and continue to grow. 

So what happens when a key member of your team decides to leave the business? Having spent so long recruiting and then training them, it can be costly for your business to have to hire a replacement. According to a survey of more than 500 SME decision makers by AXA Health, 17.6 per cent of businesses claimed it cost between £10k-25k to replace an employee, and 11.4 per cent claimed it cost between £25k-50k1. As well as the monetary cost to the business, it can also put strain on the remaining members of the team as they have to pick up the workload until a replacement is found.

So how can business owners ensure that they’re retaining their top team members?

Training and development

Regular opportunities for training and development can help to keep your team motivated and can show that you’re investing in their future career as well as the skills that they’re bringing to your business. A research study found that one third (33%) of UK employees said they wanted to leave their job due to a lack of opportunity for career progression2.

Despite this, it seems that many employers are still not placing as high an importance on career development and training as employees might like. According to one survey, only half (47%) of organisations run training and development programmes to help build employees’ skills and support career development3.

When employees feel that they’re no longer learning anything new and aren’t progressing in their jobs, they can start to feel stuck. Creating a training and development programme for each employee can be a great way to ensure that they stay motivated and engaged with the business. You could also ensure that line managers are regularly discussing progression with their team and working with them to identify training opportunities that they feel would be beneficial.

Employee benefits package

Employee benefits packages are becoming an increasingly popular way for businesses to retain current team members and to attract top quality new recruits to the business. According to a survey conducted by ExecSurvey on behalf of AXA Health, 85% of respondents believed it is very or significantly important that staff in their organisation are offered health and wellbeing support initiatives, such as gym memberships, healthy eating schemes or private healthcare cover4

One of the great things about employee benefits packages is that they can be tailored to the wants and needs of your team and your business. You could get your team involved in shaping the package by asking them which benefits they would find the most valuable. Some examples of employee benefits are:

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Encourage regular feedback

Ensuring that there are clear lines of communication between senior management and the wider team can be highly beneficial to overall workplace wellbeing. According to a report from Perkbox, 35% of employees identify a lack of communication as their biggest frustration at work5. Making sure that the team is kept in the loop with business updates and any business challenges can mean that employees are more engaged with the company by having a greater knowledge of the intended direction of the business and its progress. 

You should also encourage your team to provide you with their feedback for how they feel the business is doing and whether there are any processes or tasks that they feel the business could be doing better. If you do act on feedback from your team, ensure that any improvements from this are communicated so employees know that their ideas are highly valued and that senior management takes their feedback seriously.

Work life balance

When employees are unable to switch off from work and are working long hours, it can start to have a negative impact on their personal lives. A survey conducted by the Mental Health Foundation found that6:

  • One third of respondents feel unhappy or very unhappy about the time they devote to work
  • More than 40% of employees are neglecting other aspects of their life because of work

Ensuring that your team have a positive work life balance can aid in overall workplace wellbeing, which could subsequently improve employee retention. A positive work life balance can be encouraged in your business by:

  • Encouraging your team to make full use of their annual leave allowance and discouraging them from checking their emails while they’re on holiday and at the weekends
  • Avoiding emailing your team outside of normal working hours unless it’s absolutely essential. If you do have to email your team, you can caveat it by saying that you don’t expect them to reply until they’re back in the office
  • As employees often replicate the behaviour of senior management, ensuring that you’re leaving the office at a reasonable time each day can encourage the rest of your team to follow suit
  • Encouraging your team to take their full lunch break and to use it as an opportunity to get outside rather than eating lunch at their desks
  • Creating a break out area in your office can provide employees with a space where they can socialise with other members of the team if they need a break during the working day

How we can help

When you’ve got bold plans for your business, you need the right talent to help you realise them. Offering private health insurance can help you attract the best people to your growing business. And it can make it easier for you to keep them with you, and keep them well.

We think that the best way for you to get the healthcare cover that’s right for your business and your budget is to let you build your plan yourself. Perhaps your biggest priority is giving your staff quick access to medical help when they need it. Or maybe you only want cover for therapies like physio. If that’s the case for you, then just buy the option you need, all on its own*.

Find out more about our small business health insurance, including what we do and don’t cover and get a quote today.

*If you are buying cover for 1-2 people only, you will need to include either Treatment or Diagnostics Only in your plan.

Sources and references

1Online survey of 507 SME senior decision makers, September 2016 by market research agency Atomik for AXA Health.

2Allen Associates, 2017

3Robert Half, 2018

4Exec Survey on behalf of AXA Health. Health and Wellbeing in the UK Workforce, 2018

5Perkbox

6Mental Health Foundation

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Start taking care of yourself and your team today and get a quote for our business health insurance. Or, talk to us about how we can help your business reach their wellbeing goals.