Losing top talent can be especially tragic for small businesses. When high-performing employees walk out the door, they take their skills, knowledge, and network with them. As a result, their exit affects innovation, morale, and future potential.
But keeping top talent is not easy. Their skills, experience, and reputation as high performers make them a target for recruiting by other companies. In addition, top talent is often driven by an ambition that keeps them looking for growth opportunities. If they don’t see those opportunities internally, they’ll look elsewhere.
As small businesses engage in the critical task of retaining top talent, here are some tips that can help.
Make sure your compensation is competitive
Providing competitive compensation is the most effective way small businesses can retain top talent. Recent studies show that money is the top factor that will send employees looking for new opportunities. And it doesn’t take much to draw them away; recent stats show that more than 40% of employees would consider changing jobs for a raise of only 5%.
Being competitive starts with identifying what is available for workers in your industry. Do some research on resources like Glassdoor or Salary.com to see what companies in your industry are paying. The platforms allow you to fine-tune your research for the geographic area where your business operates and your employees’ experience level.
If you can’t match the top salaries in your industry, find ways to sweeten your compensation package. Perks like profit sharing, insurance benefits, or employer-sponsored retirement accounts can appeal to employees focused on finances. The flexibility provided by remote work opportunities or unlimited paid time off can also be attractive components of a compensation package.
Make sure you provide a clear and compelling career path
While pay is a top concern for employees, opportunities for growth are also important, especially with top talent. Employees will quickly grow bored with a dead-end position. They want to see that their employer is willing to invest in them and to know what the pathway to growth looks like.
Companies should establish career ladders that identify the next steps for each role to facilitate career growth. Ideally, ladders acknowledge that each employee may have unique goals. For example, someone may want to advance to a position that leads to deeper specialization rather than management.
Detailed job descriptions are also essential for supporting career growth. Employees should know what is expected of them in their current positions and what skills, experiences, and performance levels are needed to advance.
To retain top talent, businesses should provide the training and education employees need to advance rather than expecting them to obtain it on their own. This can take the form of training programs and workshops, both internal and external, as well as mentoring. Supporting employees as they seek continuing education—either with time off or financial support—can also be an effective retention tool.
Make sure you facilitate open communication
Uncertainty in the workplace can be very unsettling for employees, inspiring them to disengage and, in some cases, seek more secure opportunities. Businesses that facilitate open communication prevent uncertainty from becoming a retention issue.
The key to effective communication is ensuring employees feel heard. An open-door policy where leadership is readily available for questions or concerns can help. In today’s world of remote work, “open door” may mean managers are readily available to jump on a Zoom call or promptly respond to emails or direct messages.
Open communication also involves business leaders showing that ideas and feedback employees provide are considered and addressed. If messages go unanswered or are met with ambiguous or canned responses, employees can quickly feel their input is unwelcome. Welcoming input and ignoring it is worse than not welcoming it.
Open communication can also play a central role in supporting career growth and development. Managers can provide regular updates on how employee performance and development are impacting their career advancement. Businesses can also seek feedback on employee growth experiences through regular surveys.
Make sure the work environment is supportive
While competitive compensation is important, it’s not enough to make an employee feel valued. Businesses also need to provide a positive and supportive work environment that encourages employee contributions if they want to effectively retain top talent.
Ensuring employees have a healthy work-life balance is one way to show support. This can involve facilitating flexible work schedules and allowing remote or hybrid work arrangements. Programs encouraging employee well-being, such as wellness programs and mental health support, also contribute to a supportive work environment.
Regular rewards and recognition also foster an environment where employees feel valued and supported. Bosses should be quick to provide appreciation for a job well done and do it in a public way. Formal employee recognition programs take appreciation to the next level, especially when they involve some type of tangible reward or push employees closer to advancement.
Recent surveys show that more than half of full-time employees say they are interested in changing jobs in 2025. For employers, this means now is the time to implement programs aimed at retaining top talent. By being competitive with compensation, fostering open communication, supporting career growth, and showing employees you value their contribution, employers can make employees think twice about looking elsewhere.
Tiffani Martinez is the Human Resources Director at Otter PR.
Top talent stock image by Ink Drop/Shutterstock
