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11 Proven Ways Young Entrepreneurs Can Retain Employees Everybody conducts exit interviews but a better retention strategy includes asking people why they stay.

By Deep Patel

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Luis Alvarez | Getty Images

As a young entrepreneur, you understand the need to infuse your growing business with cutting-edge talent -- the kind of employees whose innovation and expertise will sharpen and refine your enterprise. You probably already understand the importance of making good hires, but what you may not have considered is the challenge of retaining talented employees and the hefty expense of constantly training new employees.

Developing an effective employee-retention strategy is tricky for even the most experienced business leader. But if you're just starting out, it's imperative that you get a handle on your hiring process early on.

Prevent constant employee churn with these 11 proven strategies to retain employees, increase worker satisfaction and help you build a first-rate team that will evolve and grow with your business.

Related: 5 Big Mistakes Young Entrepreneurs Just Keep Making

1. Retention starts with recruiting.

The first step toward building your business -- and retaining talent -- starts with recruiting. It starts with the application process, and putting out job descriptions that are as specific and detailed as possible so you get the right applicants for the job.

Carefully consider the criteria you use when screening applicants to interview. It's not just about finding highly qualified candidates; it's about finding people who are truly a good fit for your business.

2. Focus on putting together the right team.

Putting the right mix of people on a team is crucial for both productivity and employee retention. High-performing teams include people whose skills, talents, desires and goals are balanced against each other. Poor team dynamics can push valuable employees to leave an otherwise great business.

According to one survey, most businesses have a teamwork problem, and one-third of employees have considered leaving a job because of a negative team environment. As much as possible, align teams around employees' preferences and skills. Make sure you're building a cohesive team whose members can feed off each other and support one another.

3. Hire for culture fit.

When you hire someone, you have to consider an applicant's job fit -- do they have the necessary skills and expertise to do the job? But it's just as important to ascertain if they're a good fit for your business's work culture. Cultural fit is the likelihood that a person will be able to integrate and adapt to the core values and collective behaviors that make up your organization.

As a young entrepreneur, it's likely your business is just getting underway, in which case it's up to you to lay the groundwork for the kind of culture your company will have. What values, norms and habits do you want to instill in your business? Look for people who understand what you are trying to build and are excited to be a part of it.

Related: Caution! Are You Overlooking Cultural Fit in Recent Grads?

4. Create an environment where employees feel like an asset to the company.

Who doesn't want to work in an awesome environment that makes work fun and engaging? When people are excited to come to work they're not going to want to quit. Make your company personal by putting employees first, ensuring they feel they're part of the company framework. Communicate directly with employees. Let them know what strategic direction the company is headed in and get their opinion.

Involve them in dialogue regarding changes that affect the company. Encourage goal-setting and let them make their own choices as often as possible. Those who feel valued will be happier in their jobs and are more likely to become star performers. And, of course, they'll be more likely to stick around.

Related: Putting Employees First Will Be Your Best Business Move for 2018

5. Provide opportunities to grow and learn.

Organizations need to provide employees with opportunities to grow, learn and excel beyond their starting point with the company. Employees are looking for on-the-job training to keep their skills fresh and updated, or tuition assistance for continuing-education classes.

Don't let employees get bored. Give them challenging and stimulating work and a clear path to higher positions within the company. When possible, allowing employees to focus on projects they enjoy will go a long way toward creating overall job satisfaction and a desire to stay.

6. Give employees freedom and flexibility (within reason).

Allowing employees freedom and flexibility in setting their own schedules is key to retention. Don't make employees stress about having a doctor's appointment or needing to leave for a family emergency or other obligation. Though, of course, they should be expected to meet project deadlines and fulfill their work obligations.

If you've hired people you trust, then trust that they can manage their schedules. Give them leeway to accomplish their tasks, and stop making it mandatory to be at their desks during traditional work hours unless there is a need. Companies that adhere to strict schedule standards have lower employee retention.

Related: Flexible Schedules Help Create a Healthier Workplace. Here's How.

7. Create fun team-building activities.

Team-building activities such as company-sponsored events that focus on communication, problem solving, decision making or trust building are a great way to help employees break down barriers and get to know one another.

These activities can give your employees a sense of unity, and can build morale and foster connections between colleagues. A team that works well together will be more effective and productive, and will have more fun along the way.

These activities can encourage a socially amicable work environment where people take a genuine interest in getting to know each other. While some leaders believe workplace friendships are distracting, research shows it increases employee engagement at work, which is an important retention factor.

8. Acknowledgment and recognition.

It's easy to get caught up in the daily grind and forget to acknowledge the hard work being done by your team members. Even worse is when recognition is done in an offhand or superficial way that doesn't really ring true. Employees crave authentic praise and recognition, not automatic or knee-jerk acknowledgment.

They want to feel valued; to know that they're part of something bigger than themselves and that their hard work is noticed and appreciated. Employees want constructive feedback and positive affirmation. When done correctly, employee recognition energizes and motivates people, which increases retention over the long haul.

9. Offer the right benefits.

With 60 percent of employees saying that benefits are "very important" to how they feel about their job, offering the right benefits is crucial to employee retention. Health insurance is often ranked as the most-preferred benefit, while other benefits, such as 401(k) matching contribution programs, and even personal electronic device reimbursement programs, are also ranked high.

Nearly a third of employees feel that education benefits are "very important" to their job satisfaction. However, in order to increase employee satisfaction, you'll need to offer benefits that provide value to most employees, which may not be one-size-fits-all policies.

If your business can't afford to offer everything, consider offering personalized benefits. A small business can set aside a certain amount of money per employee each month, and allow employees to use that money to select and pay for the services that provide them with the greatest benefit.

10. Create an open and honest work environment.

Creating a sense of community and shared purpose helps employees feel engaged at work and increases their desire to stay. Employees want to have their concerns heard and they want to work at a place where they matter. As an entrepreneur, you should be open to listening to new ideas and accepting suggestions for problem-solving. You should be available when employees ask for guidance.

It's important to keep top talent informed about company happenings -- it prevents rumors from circulating. It's crucial that you communicate company problems or setbacks. Be open and transparent about what you can and can't commit to. Even if you can't currently address issues that employees bring up, just hearing them out will make them feel relevant and more likely to stay with the company.

11. Don't forget the extras.

Everyone likes surprise gifts or giveaways. Free-bagel Fridays or dry-cleaning pick-up and delivery may be small perks in terms of cost, but these little things add to employees' overall satisfaction and can increase retention.

Another option is to conduct "stay" interviews. Besides performing exit interviews to better understand why people leave, consider interviewing employees who have been with you for a while. Why do they stay? What would make them leave? What changes or improvements would increase their job satisfaction? This information may be useful in strengthening employee-retention strategies.

Deep Patel

Entrepreneur Leadership Network® Contributor

Serial Entrepreneur

Deep Patel is a serial entrepreneur, investor and marketer. Patel founded Blu Atlas, the fastest-growing men’s personal care brand, and sold it for eight figures in 2023, less than 18 months after its launch.

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