A Guide to Employee Retention for Small Businesses

4 min read  |   7 December, 2021   By Claire Lee


Staff retention has always been one of the biggest challenges facing businesses, particularly small businesses, given the considerable time and cost involved in finding suitable replacements.

As we emerge from the long Covid shutdown, the issue has become even more acute, particularly within industries that already had relatively high turnover rates, such as hospitality and retail.

There are several reasons why this is occurring, but one key aspect is that the enforced break has given many workers an opportunity to re-evaluate their working life and adjust their priorities to tip the balance more in favour of being at home or working remotely, often outside of our major urban centres, where housing is more affordable.

This has rendered what was already a challenging issue even more complex and is without doubt one of the main priorities facing small businesses as we open up again.

So what can small businesses do to minimise staff attrition and encourage employee retention? Thankfully, there are a number of measures that small business can apply to increase the likelihood of holding onto their staff long term.


It was something of an eye opener for many employees to observe that something that was seemingly to difficult to provide previously was suddenly manageable, and actually quite easy to facilitate when circumstances dictated – that of flexible working arrangements.

Employees who had been told time and again that it was not a workable arrangement for them to perform their role outside the office were very quickly given the opportunity to do so, but it was because it was the only option available to businesses to continue trading, rather than any willingness to make life easier for their workforce.

This left a bitter taste in the mouths of many employees who had previously been denied this type of arrangement. It has subsequently led to many of them handing in their notice rather than return to the workplace when ordered to do so following the cessation of the Covid restrictions.

Businesses could have easily avoided this scenario by offering that level of flexibility as a matter of course, not just when they have no other option. Now that a lot more of us have become accustomed to working from home, staff are increasingly demanding greater flexibility around where and when they perform their role. Those businesses that remain intransigent and refuse to offer this to their staff will have a much tougher task on their hands to retain their staff than the ones that do.

Indeed, a survey carried out by the University of Sydney into employee expectations around flexible working arrangements strongly suggests that flexible working is no longer regarded as a ‘nice to have’ perk, but rather an expectation.

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Professional development

One area where larger organisations typically have the edge over small businesses is the resources they provide for career development. A lack of opportunity for career advancement is also one of the most common reasons given by employees when asked why they decided to move on.

Small businesses can combat this by setting key goals for employees’ personal development and providing access to training to help them reach those goals.

Having a good onboarding process for new staff is vital, as the establishment of a career development plan can and should form part of this onboarding process, so that every employee knows there is a path laid out for their career development within your business and there is no need to look elsewhere further down the track. The onboarding process should also offer the new hire the opportunity to provide feedback, so that any gaps in the onboarding process can be identified and addressed.

Remember, training doesn’t need to be expensive. Staff mentoring and the creation of a knowledge base where employees can share their experiences and expertise with their colleagues can be fairly inexpensive to set up. This can be a very valuable resource for your business, as it also helps to ensure that if a senior staff member does leave, the knowledge and experience they have accumulated is not all lost to the business.

To help ensure that development remains on track, have regular catch ups with staff and conduct annual performance reviews. These can offer insight into whether employees still feel that they have opportunities to advance their career within the organisation, and if not, the employer can do something to remedy that before the employee decides to look for it elsewhere.

Recognition and reward

It is incredibly important to ensure that staff are valued within a business. This is especially true within a small business, as having a smaller team means that individuals often need to be relied upon more heavily to cover for others when numbers are down due to illness or holiday leave. Employees that don’t feel valued will be less likely to go the extra mile to help the business out in times of need.

Recognising the contribution that an employee makes to the business with a salary that is commensurate to their value to the company is essential, as if you don’t, someone else will.

Recognition doesn’t always need to be in the form of financial reward or other perks (although they certainly don’t hurt!). A simple thank you for a job well done is often all that it takes to build staff loyalty and goodwill. Having said that, it is also important for small business owners to share the company’s successes with their staff.

A team that shares in the company’s success and rallies together to get the business through the tough times is a team that is much more likely to stay together.

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Author: Claire Lee

Claire is a Marketing Executive at Breathe, and loves all things related to creating marketing campaigns and content.

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