Why it’s so hard to for small businesses to retain talent? (and the solution…)
“Now that your business is established, what is your biggest challenge?” I asked, thinking I knew the answer. Most likely Sales or Customer Satisfaction. The answer surprised me. “I can’t keep my people.” he said, throwing his hands in the air. “The minute I hire someone good, it seems like they’re leaving again. What is going on?”
I asked him to tell me about his last 2 hires. First was a young woman in her early twenties, she worked for about 8 months before leaving for a job at a bigger company. “All that training went down the drain, and then I had to look again.” Few months later, he hired an older man, who stayed a bit longer, but still left within the year for a different job (presumably with higher pay).
“Can you raise the pay?” I asked.
“I don’t mind raising pay, but I can’t match that of big corporations, and I have to be fair to my existing staff.” He sighed with frustration.
He was stuck in a never-ending cycle of hiring, training, and then just as the new hire becomes a contributing team member, watching them leave for a bigger job. Or even worse, the new hire is non-performing and must be terminated, wasting more time and resources.
Why is it so difficult for small businesses to retain talent?
He wasn’t not alone. Small businesses are increasingly having trouble finding and retaining talent. The jobs which used to get dozens of inquiries are now sitting on job boards without much interest.
A few days later I had a coffee chat with two young people who are just starting out in their careers. I asked them if they would consider a job in small business. “Sure”, said one, “I’m happy to take anything that gives me real work experience in an industry that I’m interested in.”
“How long would you be willing to stay?”
“Well that depends, will my role expand to have more responsibilities, and will my pay increase substantially thereafter?” I knew the answer was most likely no to both questions. For a small business, roles are typically well-defined, and there’s not much room to increase pay. Can’t say I blame them, these are very valid questions.
Without a clear path for promotions and higher pay, is there really no solution to help small businesses?
Pay isn’t everything, but it sure matters! People also want to see career progression, which is typically ill-defined, and difficult-to-achieve in a small business.
I can talk about building an amazing company culture that nurtures employees, etc, but let’s be honest, small businesses just can’t compete with bigger corporations when it comes to promotion and pay. And that’s what matters a lot of the time. In a company of 15 people, you can never be promoted to be the boss, because the owner is the boss. But in a big corporation, there are multitudes of levels a person can be promoted to, along with hefty pay raises.
I suggest for small businesses, instead of hiring and hoping the person will stay forever, try to change the perspective. Understand that this person will be with you for a short while, be it 6 months or 5 years. Eventually they will move on, and that’s ok. It’s just a fact of life. Better people will always move on. The best talents I’ve met rarely stay for longer than 3 years at each job. Even if they’re not looking to move, they will be head-hunted. That’s reality, accept it.
What I will suggest is for small businesses to find a way to hire quicker and more easily, so the departing employee doesn’t leave a critical hole in the company.
In comes Workholler, an on-demand staffing company with a growing talent pool, tailored for small businesses. Qualified, pre-vetted staff are available to be hired on short notice. And should they leave after a while, a replacement will be found immediately, with minimum input required from the business owner. No more posting on multiple job boards, flipping through resumes; no more calling people just to get their voicemail, and no more interviewing multitudes of people just to hire the right one. With Workholler, our technology driven platform does all the work, and the right one is sent to your door.
Perhaps we don’t have the solution for retaining talent for small businesses. But we can sure make finding your next hire easier.