Small Businesses Thrive By Giving Workers Reasons to Stay

(The Charlotte Observer/MCT) —

Clients of law firm Johnston, Allison & Hord value that many of the same attorneys and staff have worked with them for decades.

Not surprisingly, that kind of longevity doesn’t happen by accident. It takes time, effort and money to create a work environment that begets low employee turnover.

But it’s well worth it, said Darrell Shealy, managing partner of the 101-year-old Charlotte, N.C. firm.

Because despite the stress of the job, it’d be hard to leave a business that gives employees $100 gas cards for their commutes in the throes of the recession. One that gives flowers and gift cards on holidays and employee’s annual work anniversaries. One that throws a catered staff-appreciation party on the second floor balcony with a skyline view a half-dozen times a year.

“We do all we can to keep all our folks as happy as we can around here,” Shealy said.

The flashy perks of multi-billion-dollar corporations such as Apple and Google (hello, nap pods, free dry-cleaning and on-site medical care) have publicly married the relationship between employees’ satisfaction and productivity. But whether a company employs thousands or a handful, workforce retention and engagement can directly affect margins.

Here’s one reason: Vacancies deal a blow to productivity, said John Bennett, a professor at Queens University’s McColl School of Business and the director of the school’s master’s program for executive coaching.

Add the often-lengthy process of recruiting, hiring and training an employee, and you’ve lost and invested a substantial amount of time and money before the new hire even contributes. Bennett said studies estimate that some businesses spend nearly the equivalent of that annual salary before the new hire starts producing.

But even without a vacancy, businesses can lose when employees are disengaged, or mentally “checked out,” he said.

“Whether they’re making $20,000, $50,000 or $1 million a year, all of that adds up,” Bennett said. “So it’s important for us to have fully engaged, competent people doing the right things in the right ways with the right resources.”

So while small business owners might not have the revenue to offer free shuttle services and gourmet chefs for three meals a day, some entrepreneurs have found their own ways to boost morale. And they’re attesting that perks – big or small – pay big dividends.

Building a Culture: Perks alone may not be enough to retain an employee, but they go a long way toward building a business’s culture, which is often what attracts them or drives them away, Bennett said.

Sharon Garfield owns Traditions, a high-end home furnishings shop in Charlotte. She has seven employees, and can only afford to offer health benefits to her full-time employees. Yet her part-timers continue to come back.

She credits their loyalty to the work environment, which feels like family, she said.

Everyone on staff eats lunch together every day, and she’ll treat once or twice a week. She also keeps the back stocked with bread, condiments and deli meat for those who – like her – rarely find time to pack a lunch in the morning.

Know Your Employees: There’s no one-size-fits-all model for perks, experts say, so it’s important for business owners to discover what appeals most to their employees.

Les Hudson, a professor of strategic management at the McColl School of Business, used to be the CEO of textile manufacturer Dan River, Inc.

Because most of his employees had children, he said he gave many family-friendly rewards, such as tickets to a ballgame.

On the other hand, Keith Luedeman, CEO of Charlotte-based online lender, found that offering perks with a “cool factor” attracted millennials.

That’s why the company’s 44,000-square-foot office has a basketball court, a full gym and a game room with everything from ping-pong and foosball to Nintendo Wii and shuffleboard.

Since Luedeman founded the business in 1999, it’s grown from three employees to 109.

“I know there’s a payoff,” he said. “I hear from my employees, ‘Hey, this matters. This makes a difference.’ And when they refer people, I know it’s because they’ve been talking about all the fun things in this place.”

Keep Everybody in the Family: Perks are great, Hudson said, but they’re just a facet of a larger goal: to make employees feel wanted and appreciated.

One free way to boost morale is to ask for employees’ advice, Hudson said. But, he added, “you have to be prepared to really examine what they’re telling you. Because if you don’t … you seem insincere. And that can do more damage.”


Tips for boosting employee satisfaction at your small business:

  • Give a Choice: What motivates one employee might not motivate another, so Keith Luedeman of Charlotte, N.C.-based online lender said he often lets employees pick their rewards. “Sometimes it’s a nice dinner and sometimes it’s cold, hard cash,” he said.
  • Remove Obstacles: Sometimes the best perks are the ones that just make employees’ lives easier. That’s why Sharon Garfield, owner of the high-end home furnishings store Traditions, has lunch catered during weeks when they’re having blowout sales. “We work so hard. Nobody needs to worry about what they’re going to eat,” she said.
  • Remember the Intangibles: If you can’t find room in the budget to offer many perks, focus on what speaks to an employee’s psyche, rather than his wallet, said Les Hudson, a professor of business strategy at the McColl School of Business at Queens University. “It’s been my experience and observation that the most important thing is for employees to feel wanted and appreciated,” Hudson said. “Managers can do so much in that regard just by telling people ‘thank you’ … and asking their opinions.”

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