The current macro environment is challenging for businesses of all sizes. But it’s a lot less challenging if you have above average employee retention. And that’s one place small businesses are winning.
Recent turnover numbers prove it out:
- According to the Bureau of Labor Statistics, voluntary turnover for large employers increased 25.6% May to June. This follows the upward trend April to May of 14.7%. The June 2023 rate matched the May 2022 rate giving a year over year change of 25.6%.
- Medium sized employers, 1,000-4,999 employees, saw an increase in turnover of 2.4% May to June.
- On the other hand, small employers experienced a decrease in voluntary turnover of 3% and very small employers, 1-10 employees, saw a decrease of 6%.
Larger employers had more job openings and spent more money on hiring and recruiting than smaller employers in June.
The statistics on hiring speak volumes as well:
- Nationally, there was a slowdown in hiring in June, most significantly in Manufacturing and Retail with a 13% and 11% decrease in hiring respectively.
- Meanwhile, Hospitality/Food Service, an industry that contains multitudes of small businesses, reduced hiring by only 2.4% May to June.
Statistics like these tell us a lot about what employees are seeking, and whether or not employers are delivering. In the current environment, workers employed at larger organizations are seeking better opportunities and it’s been challenging for employers to fulfill expectations and fill the vacant positions. It’s no wonder retention is one of the largest concerns of employers in 2023.
Larger employers should look at what makes turnover numbers lower at smaller organizations and take a page out of their book. Because it’s almost always cheaper and more beneficial to retain an employee than to hire a new one.
Here are some small-business inspired retention strategies to steal:
- Ask for employee feedback and take action: Listen to employees by asking them for feedback. It’s one of the most powerful things you can do to increase employee engagement and improve customer and employee experience. Invite employees into strategic decisions and ask them for ideas on how you can improve operations and culture.Take action on what you hear to address concerns and implement new ideas.
- Keep employees connected and in-the-know: Leaders should be engaging with workers directly and often through communication channels such as personal one-on-one interactions, periodic meetings, newsletters, and direct communication via text messages. This helps employees feel valued and connected, and increases engagement.
- Make sure employees feel valued and appreciated: It’s important to each of us to feel valued, appreciated, and seen. Sincerely thanking employees for their work and the time they spend away from family through videos, in-person meetings, and even texts can go a long way. If you need more ideas, here’s a list we made.
- Build a team culture: Smaller organizations often do a better job than their larger counterparts of fostering a sense of team. Build this into your culture through empathetic and empowered leadership, opportunities for regular team connections, and offering employees more autonomy when it comes to how they get their job done. You can train your leadership to foster a culture of team and retention.
Large employers, you know your hiring numbers. Now is the time to take a page out of smaller businesses’ retention playbooks.
And, small and medium sized employers, make sure you’re focused on employee engagement and retention strategies to ensure you continue to be a home for workers seeking a change from larger enterprises.
No matter what the macro environment is, be intentional about hiring and retaining the best employees. Employers who do it right will spend less, stay more competitive and, best of all, have a happier and more engaged workforce.