Plenty of journalists are talking about small businesses and hiring – and, for business owners, there’s good news and there’s bad news (isn’t that always the case?). The good news is that hiring is up, which is an indicator of an improving economy. The bad news for owners is that the employer-employee pendulum is swinging more in the direction of the employee. The Wall Street Journal’s Market Watch reported (October 2, 2014) that small business employment growth was up, the twelfth gain in a row and the largest increase of the year to date. The National Federation of Independent Business states that owners added an average of .24 workers per month, with a total of 88,000 people being hired by small businesses in September 2014 (source: Washington Post). This need for small business hiring is clearly a positive sign of economic growth. Eighty-four percent of small business owners who want to hire, though, are frustrated with the lack of qualified applicants to fill their positions. Interestingly enough, most employers have not yet resorted to offering high wages, a strategy that likely would help solve this problem.
Increased wages
The Orlando Business Journal reports that the new PNC Economic Outlook Survey indicates that 38% of business owners plan to increase employee salaries within the next six months, the largest number of owners since 2008. Of those planning raises, 59% will offer raises of 3% or higher. This is good news for employees, and something to factor into your 2015 business plan, especially if you’re struggling to find and/or retain the quality of staff your business needs. The PNC report states that small to mid-sized businesses that plan to hire intend to add one to five employees, sizeable growth given than ¾ of businesses surveyed have fewer with 50 full-time employees. More than half of the companies without plans to hire say that they need increased sales of at least three percent before they begin to hire again.
Holding on to top talent
ABC News reports on a Principal Financial Group survey that shows increasing numbers of employees giving notice. In fact, the Labor Department states that more than 2.5 million people left their jobs in July 2014, up from 2.3 million a year before. A 2014 survey by Hay Group indicates that 38% of workers plan to find a new employer within the next five years, up from 30% in 2010. Again good news for employees and a sign of a strengthening economy (also good!), but a bit disconcerting if you’re struggling to hold on to your talented staff.
Staff retention strategies
Financially rewarding staff is one obvious retention strategy. Other highly effective strategies include to:
- genuinely listen to and communicate with employees
- value their contributions to the company and commend them for their ideas
- provide them with challenging work that stretches their abilities and allows them to make a significant difference in your company
- offer telecommuting or flexible scheduling options, whenever possible
- create a stable culture where employees can do their best work
- keep your word to them
Test yourself
Here is a quiz to determine whether or not you create a pro-retention workplace culture. The catch, of course, is that the results will only be as good as your willingness to be honest about yourself. Consider also giving employees a chance to anonymously respond to a similar quiz. Do they see you as you see yourself? If not, what can you do to be more responsive to employee needs? Do you plan to hire in Q4 of 2014 or in 2015? Do you plan to offer raises? What is the situation in your business – and what info can MP Star Financial provide to make it easier for you to navigate the ever-changing world of small business? Please leave a comment below.