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Retaining Employees in Small Business

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Abstract

Retaining employees is a dilemma for small businesses. Large corporations have resources specifically aimed at keeping their employees while smaller ones do not. Using online resources, we examined the issue of employee retention in small business. We found that the problem stems from different areas, lack of resources, few employees, minimal direction from management. While these issues are a problem, they are not insurmountable. Small businesses need to be innovative and creative in finding ways to keep their employees.

Retaining Employees
Why would a small business see higher turnover than a larger company? In general, small companies have less official company documentation and standardization with regard to job descriptions and responsibilities. Because there is a smaller employee roster, there is less opportunity for specialization. Small business employees often have to be versatile. It is for this reason that small businesses often refrain from being specific in outlining an employee’s duties: The employers themselves may not know ultimately what the expectations are of their own employees. Writes Kickul, “Instead of having explicit job assignments, job descriptions, and training programs that are traditionally seen within large organizations (Aldrich and Auster 1986; Aldrich and Langton 1997), small firms and their founders may rely on informal techniques to communicate their organizational benefits and rewards to guide and assist employees in understanding their psychological contract with the small business. (Kickul, Jill)”
Employees often want specific descriptions of their roles and responsibility. This means having written job roles and responsibilities, and having this available to the employee. When an employee has a specific understanding of what is expected of them, they will tend to have an increased sense of job security. As mentioned in the above quote, this scenario is traditionally found in larger companies. An individual going to work for Home Depot or Wal-Mart is going to be given an employee handbook, specific outline and description of job requirements, etc. In the absence of this explicit communication, i.e. in the small business environment, there exists the possibility of miscommunication, misunderstanding, and resentment using these “informal” techniques, be they verbal, hinted at, indirectly suggested, or otherwis...

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... environment that is desirable and unique can help in this process. This includes promoting from within the company and giving employees’ room to grow. Most small businesses will find that these solutions can help when there is a lack of resources. Finally, by getting creative small businesses can find solutions that cost less and will still be effective in retaining employees in the face of larger businesses.

References

Daveta, John (2001). Retaining Valued Employees No Small Task For Small Businesses.). Daily Mail.

Hayes, Scott. (1999). Payroll-Deduction Plans Help Small Companies Retain Employees. Workforce.

Jones, Alexandra. (2004). Work-Life Balance needs Correcting. Daily Mail.

Kickul, Jill. (2001). Promises made, Promises Broken: An Exploration Of Employee
Attraction and Retention Practices in Small Business. Journal of Small Business Management.

Worden, Vicki, L. (2002). Tips For Keeping Top Performers. Association Management.
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