Employee loyalty is a key feature in determining the success of your SMB. Maintaining loyal staff means that you have better retention rates, avoiding expensive and time-consuming recruitment. It also leads to greater productivity and employee engagement, too.
All of this is great for your business — but we can’t rely on finding naturally loyal team members. We need to earn them.
What levers can we, as leaders, pull to make our staff more loyal? And where do PEOs and their services fit into the picture?
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Why is employee loyalty so important for SMBs?
Employee loyalty refers to how your staff members feel about your company. For many, this can be governed by the three R’s; respect, recognition, and reward. Put simply: staff who feel respected, have their needs and contributions recognized, and are rewarded for their efforts will be more loyal in the long run.
This loyalty manifests in ways that are important for your SMB. Loyal employees are less likely to be looking for a new job elsewhere. And when they do look to move on (as most will, one day) they are more likely to discuss the move with you first.
The benefits of employee loyalty aren’t confined to retention, though. Loyal employees are more engaged, meaning that they are actively looking for ways to improve their performance. It’s hardly surprising that staff who feel engaged and enthused about their work are also more productive. Loyal employees create an enjoyable working environment, offer a better service to customers, and are creative in their problem-solving.
Sounds good, right? What business leader wouldn’t want that for their organization?
If you’re now wondering how to improve employee loyalty in your SMB, you’re not alone. 33% of top executives across a range of industries report that improving “our employees’ loyalty and faith in the company is a top priority”. This reflects a growing understanding that employee loyalty is about more than crisis management — it’s about growing your business day in and day out.
So how do you get started right away?
How to increase employee loyalty in small- and medium-sized businesses
Given the value of having loyal employees, you might be surprised at how easy it can be to make substantial improvements in loyalty. The following four commitments can make a world of difference — and PEOs help you get it right.
1. Pay your staff on time
This might sound completely obvious, but we really can’t stress it enough. Payroll is the most important part of your business from the perspective of building trust and loyalty.
Many employees will have organized their financial life around payday. They may have scheduled regular payments — like mortgages or rent — around their monthly paycheck. Any delay or interruption to these payments can come with substantial repercussions.
Even if this didn’t impact loyalty, team members with significant money worries may struggle to keep their minds on the job.
Being paid on time is also a matter of trust for many employees. Being paid late can leave staff wondering where they fall in your priorities and they may worry about your commitment to other aspects of your contractual agreements as well.
Ultimately, consistent late payments could cost you your most valuable asset: your staff.
How a PEO can help
There are two main reasons for late salary payments; cash flow issues and admin difficulties. If you have been holding back salary payments to ease cash flow, we’re here to tell you this is nothing but a false economy.
Some SMB owners may intend to pay their staff on time, but the admin becomes too much. Either you are distracted by other business-critical tasks or you are simply overwhelmed. This can lead to delays, errors, and confusion.
Here’s where a PEO can help. Doing payroll probably isn’t why you went into business, so it is often better to let the experts handle it on your behalf. PEOs can manage all of the admin required for timely payroll, leaving you free to concentrate on growing your business.
Not only is this better for your employee loyalty, but it’s often a more profitable use of your time.
2. Give employees opportunities to grow
No one likes to feel stuck in a rut. Employees want to learn, grow, and develop — especially your top performers. Providing your staff with opportunities for personal and professional development fosters a culture of learning, encourages self-development, and demonstrates your commitment to your team.
When you devote time and money to training up an employee, you are giving them a clear sign that you value the work that they are doing. It also signals that you’re willing to invest in their future. Most staff will want to repay this investment with improved performance and engagement — and that brings big benefits to your bottom line.
But training and development are equally important for new hires as it is for retaining and valuing existing staff. 40% of employees who describe their training as “poor” will leave within the first year.
How a PEO can help
Training and development initiatives are often the first things to go when an SMB owner becomes overwhelmed. With so little time to carry out urgent tasks, creating opportunities for growth becomes something to do “tomorrow and not today”.
It’s easy to understand why, but it can leave employees feeling undervalued fast. This is especially true of your top performers — sure they are less likely to have the kind of performance issues that prompt urgent training, but these are exactly the staff members you want to keep loyal.
Finding a PEO partner to handle the time-consuming burdens of employee management leaves you with a lot more time to focus on what really matters to your business. This will include areas such as sales and growth, but it can also involve really getting to know your team.
Understanding your employee’s professional and personal goals — and helping them to achieve them — builds a stronger sense of loyalty no doubt.
3. Invest in great managers
People don’t leave good jobs, but they do leave bad managers. If you want to increase employee loyalty, it’s essential that you have skilled managers who are empowered to act in the best interests of their team.
In a recent, large-scale survey of American workers, a poor manager or supervisor was the most common reason employees gave for leaving a job. A massive 75% of respondents said this was the primary reason for leaving voluntarily.
It is always worth remembering that we are talking about relationships here, so one person’s best manager might be another person’s nightmare. Nevertheless, if your managers don’t have the time, energy, skill, and authority to support their team, then employee loyalty will always be a struggle.
How a PEO can help
Having great managers means choosing the right people and then empowering them to do well. As an owner or leader, you may be sure which managers are doing an outstanding job of building the loyalty of their teams — after all, employees are often wary of giving an honest opinion, even in theoretically anonymous surveys or discussions.
A great PEO will be able to offer you performance metrics, including employee turnover, for your managers. They may also be able to provide average data for your industry, allowing you to gain an overall picture of where your company’s performance falls.
A PEO can also help improve managers’ performance. Even a top-quality manager will stop performing well when overwhelmed with day-to-day tasks that could easily be delegated. Finding a PEO partner to shoulder this burden leaves your managers free to focus on how to get value out of their teams.
4. Offer great benefits
Offering a great benefits package is a great way to emphasize that you care about your employees’ welfare.
Benefits can have a huge impact on employee confidence and loyalty. Employees with a generous medical plan can relax, knowing that they don’t need to worry about getting sick. Similarly, offering life insurance for dependents provides staff with peace of mind. Even less formal benefits, such as gym memberships, give you the opportunity to demonstrate that you want them to be happy.
How a PEO can help
SMBs often assume that they really can’t compete with larger firms in terms of benefits packages, but this simply isn’t true.
A single SMB might not have great bargaining power, but a PEO combines the bargaining power of a huge number of SMBs, allowing you to offer an incredible package at a fraction of the cost.
Finding your PEO partner
A great PEO arrangement is a relationship and it’s important that you find the right partner. MartinoWest is the only PEO-focused agency. We specialize in ensuring that you receive all the assistance, benefits, and services that you need… and nothing that you don’t.
Businesses with a PEO arrangement have been shown to experience between 7-9% faster growth and have over 10% lower staff turnover. They’re even 50% less likely to cease operations!
If that sounds good for your business, then get in touch today.