Offer Competitive Compensation and Benefits
A person’s salary or hourly wage plays a major role in how they view their job. For some, it’s of extreme importance-for others, it’s one of many factors. But what’s undeniable is that pay always matters. If it didn’t, people would be volunteering instead of working.
Offering a competitive wage is crucial for keeping employees satisfied, but small businesses don’t always have the budget to match the highest salaries in their industry. That doesn’t mean you can’t stay competitive. There are many non-monetary benefits that can keep employees happy and engaged, including:
- Floating holidays or additional PTO
- More sick leave or flexible leave policies
- Stipends for work-related expenses (e.g., home office setup, training, or commuting costs)
- Flexible scheduling, hybrid, or remote work options (if applicable to the job)
- Clear career growth paths with structured raises and promotions
- Retirement plan contributions or financial planning assistance
Employees want to know where their pay is going over time, how their benefits will support them, and that their employer is invested in their future. When compensation is structured fairly and transparently, employees are more likely to stay long-term.
Create a Positive Work Environment
As a business owner, creating a positive work environment is your responsibility. But this isn’t just about bringing in donuts or saying good morning-it’s about building a workplace where employees feel valued, respected, and engaged.
A strong workplace culture starts with leadership. Having a well-trained supervisor, an HR contact for support, and an open-door policy fosters trust and communication. When a new employee joins the team, introduce them to everyone and ensure they feel welcomed. A culture where employees are willing to help each other makes a huge difference in retention.
Beyond daily interactions, workplace traditions and small gestures matter. Consider:
- Company outings, like a picnic, cookout, or holiday party
- Celebrating employee birthdays with a small treat or recognition
- Team dinners or gatherings a couple of times a year
- Bringing in food or snacks to show appreciation
These small efforts create a workplace that feels more like a community. Employees who feel valued and enjoy their work environment are far more likely to stay long-term.
Provide Opportunities for Growth and Development
Employees are far more likely to stay when they see a future with your company. It’s human nature to want to grow, learn, and progress-nobody wants to remain stagnant. If an employee feels like they are doing the same tasks every day without gaining new skills, increasing their pay, or advancing in their role, they’ll eventually look elsewhere for better opportunities.
Growth and development can come in many forms-pay increases, promotions, additional benefits, and structured career paths. One way to do this is through tiered job levels (e.g., Level 1 Assembler, Level 2, Level 3). This provides a clear path for progression based on skills, certifications, and accomplishments, rather than just years of service.
Beyond titles and promotions, training is a key part of growth. Employees feel more valued when they are actively developing new skills that make them more valuable to the company. Some simple ways to provide growth opportunities include:
- Pairing senior employees with new hires for mentorship and hands-on learning
- Providing skill-building workshops and on-the-job training
- Helping employees earn certifications relevant to their roles
- Encouraging cross-training so employees can expand their expertise
Yes, pay increases are important, but true retention comes from helping employees see a future for themselves at your company. When people feel they are growing, learning, and progressing, they are much more likely to stay.
Recognize and Reward Employee Contributions
Employee recognition isn’t just a once-a-year event-it should happen daily, weekly, and annually in some capacity. Regular appreciation builds loyalty, motivation, and a strong workplace culture.
Recognition can be as simple as a big smile with a “good morning” or a sincere “thank you” at the end of the workday. Yes, employees are being paid for their work, but they could just as easily take their skills to another employer. Showing appreciation builds connection and reinforces that they are valued where they are.
One structured way to show appreciation is through “commendable actions.” Keep a record of great things employees do throughout the year-whether it’s going above and beyond, helping a coworker, or solving a big problem. Then, during their annual, semi-annual, or quarterly review, bring up these moments. Saying something like, ‘I remember back on February 3rd last year when you handled that situation so well,’ will make the employee smile.
When employees feel undervalued and unappreciated, they leave. They will seek out a workplace that recognizes their efforts and treats them with respect. And recognition doesn’t have to be expensive-small gestures go a long way. Consider:
- Quarterly or semi-annual appreciation events where employees get an extended break
- Personalized thank-you notes or shout-outs during team meetings
- Small perks like gift cards or treats as a token of appreciation
Saying “thank you” costs nothing-but it makes a huge impact. Employees who feel valued are far more likely to stay and stay engaged.
Foster Strong Employee Relationships and Teamwork
You constantly hear the phrase ‘teamwork makes the dream work,’ but the reality is, you can’t force teamwork on people who aren’t naturally aligned. If employees don’t mesh well-whether due to conflicting personalities, work styles, or values-forcing them into a team won’t magically create collaboration.
Fostering strong employee relationships starts with hiring the right people for your company culture. This doesn’t mean hiring clones, but it does mean looking for common ground-shared goals, work ethic, communication styles, and adaptability. When you build teams intentionally, collaboration happens naturally instead of feeling forced.
During the hiring process, asking culture-focused questions can help identify the right fit:
- What are the top three things you look for out of a workplace?
- What kind of work environment do you thrive in?
- How often do you seek feedback in the workplace?
Beyond hiring, businesses can encourage teamwork by:
- Creating mentorship programs where experienced employees guide new hires
- Organizing team-building activities that employees actually enjoy
- Promoting open communication so employees feel comfortable sharing ideas
- Recognizing team achievements instead of only focusing on individual accomplishments
Strong workplace relationships improve morale, productivity, and retention. When employees feel connected to their coworkers and engaged in their work environment, they’re far more likely to stay long-term.