To make sure you keep your best staff you need to consider areas such as work culture, feedback and incentives.

Involve your employees in the work culture

Small businesses have a great advantage over larger ones, in that they can be closer to their staff as well as their customers and suppliers. As a small business, you should have a much better chance of avoiding the back-biting and rumour-mongering often associated with larger companies, and which can lead very quickly to dissatisfaction at work.

Keep your employees up to date with the progress of the company and any developments that are likely to happen in the near future. It is vital that your employees feel involved and valued, and understand their role within your company and how they can contribute to its success.

You don’t need to spend money to create a positive and happy work environment, but it can go a long way towards motivating and retaining your staff. Ensure you make employees feel welcome to both the company and the job – this could be done through an induction process. Katie O’Connor, career expert at Monster.co.uk, sponsor of our People Channel, recommends the following.

• A good induction into the company, with on-the-job training and a buddy system. The first three months of employment with a new company can make a big impression.
• A competitive salary and benefits package, which perhaps offers flexible benefits, thereby offering benefits more suited to the individual.
• Training and development programmes, offering career progression, promotion or perhaps even a change in career.

Regular feedback is key

According to O’Connor, you should have an effective appraisal system in place, that allows for realistic, but challenging objectives. There should also be interim reviews, to ensure objectives have not changed and to give an opportunity to identify training and development. Consider who is best placed to carry out the reviews – in some cases it may be more appropriate to use a middle manager. This is someone employees could see as more approachable, and they are likely to be more open and honest with their feedback.

Feedback is also an important aspect if your staff do decide to leave. Hold ‘exit’ interviews if possible, particularly for key staff, which will help you identify any problems going forward. Try to be positive when people leave.

There are two ways of looking at people leaving: a bad leaver is someone who goes without any warning and will leave to work for, say, a competitor. A good leaver will have flagged up any particular problems beforehand, and let you know about any concerns with the work and the company – this is obviously the type of culture you want to create. Make sure your staff talk to you first if they are thinking of leaving. This will avoid the feeling of ‘this is the first I knew of it’ when one of your employees leaves. Negative comments from staff should not be ignored – instead take them on board and find out why your staff have raised those issues.

Incentives

Consider the benefits you provide. Can these be improved in any way? What motivates particular employees? Each of them will be motivated to do the job by different factors. For example, some will be motivated by security, others by the challenges presented by the job, and others by career development opportunities – ensure that their work reflects what they want or expect from their job.

Ensure you recognise and reward your employees’ achievements. Increases in pay are often not an option for small companies, so find a way that does not involve straightforward pay. This could be group days out, or brainstorming sessions combined with a fun activity.

Another way of rewarding employees that does not involve paying cash immediately is to set up performance-related pay and bonus schemes. These can work well at particular times of the year, such as Christmas. Profit sharing and other ways of giving your staff a stake in the business can also be a good retention policy. Think too about introducing flexible work patterns.

“Flexible working can involve job share, flexi-hours, internal transfers, job rotation and sponsorship for professional education,” says O’Connor.

Tackling the problem early

It is essential to tackle staffing problems from the outset, as failure to do so can lead to a low company morale and poor service, which will have a knock-on effect with customers’ confidence in your business.

If you experience recurring problems keeping staff, examine turnover trends. Look at whether people tend to leave within the first few weeks or months of the job, and whether certain areas of your company have a higher turnover rate than others. Then ask yourself the following: are the procedures you are using recruiting the right people? It could be that you need to change the way you are recruiting – for example, if you are finding it hard to fill one job with one person, it may be worth considering offering the job to two part-time people to share.

Update: Information and Consultation of Employees Regulations

Groundbreaking legislation designed to harmonise relationships between bosses and employees has been announced by the Government. The Information and Consultation of Employees Regulations aim to reduce workplace disputes and discord by giving employees the right to be consulted on issues that affect them at work.

Employers and staff will be able to agree consultation agreements adapted to their particular business circumstances. Under the legislation it will be up to employees to ask for information and consultation arrangements to be introduced and if 10% of the workforce request it, employers are obliged to set up such a scheme. If employers do not abide by such arrangements, employees or their representatives can complain to the Central Arbitration Committee, and a penalty of up to £75,000 can be imposed.

“Information and Consultation is a real opportunity for greater partnership and understanding in the workplace and that can only be a win-win situation, enthused Employment Relations Minister Gerry Sutcliffe. “People can cope with bad news, change and all sorts of information and situations if they know what is happening – it is uncertainty that causes problems