How to Keep Your Best Employees—On a Shoestring Budget
Getting employees to think like business owners is a challenge many entrepreneurs don’t even know how to put into words. Instead, they say things like:
- Why can’t my employees take their work seriously?
- Why don’t they care as much as me?
- What am I doing wrong?
The reason your team isn’t feeling motivated could be because they don’t feel like owners. And when people don’t feel invested in things, they usually leave.
Sure, employee equity, bonuses, and unlimited vacation are the fixes you might expect. But there’s a little-known employee retention secret that the best business owners don’t always talk about: The importance of putting employees in your business-owner shoes.
We talked to small business owners to find out how they make their employees think and act like owners. Then, we asked those same people to tell us how they encourage their talented employees to stick around.
1. Ask employees to review you during performance reviews
Performance reviews are universally hated. But business owners can use them as a chance to ask employees how they would run things if they were in charge.
Matt Lee is the former president of Adhere Creative, a 10-person Houston-based marketing agency. The way he sees it, there are two main problems with typical performance reviews.
- Only conducting them once a year means he can’t respond quickly to issues.
- The company misses out on valuable feedback that if received earlier, could prevent employees from leaving—and help the business grow.
Lee’s solution? Quarterly chats that give his team a chance to flex their business-owner mindset. “It’s a pulse check to see how the employee is feeling about their job, their role, their team and the direction of the firm,” he describes.
Here’s how to copy Lee’s strategy.
Schedule reviews a year ahead of time
This is important, Lee says, because when the end of the quarter arrives and things are busy, it’s tempting to postpone them for other priorities—like the actual client work that pays the bills.
But performance reviews should be your top priority.
Fire off that calendar invite and drop an all-caps “DO NOT RESCHEDULE” in the meeting title. “By checking in a few times a year, you can address problems quickly and catch small problems before they turn into big ones,” says Lee. “So do it.”
Send a doc before the meeting—and ask the hard questions
The week before the review, Lee creates a Google Doc for each employee and throws in questions tailored to that person’s role. He then asks his team to look over the doc and write down any thoughts before the review.
A few of the questions he asks include:
- What are you most proud of this quarter?
- What are your biggest obstacles to getting your work done? How could management help you overcome those obstacles?
- Overall, how satisfied are you with your career at Adhere Creative? (Rate each of the following: position, role, clientele, compensation, benefits, creative freedom, and anything else you want to add.)
- What do you wish were different about your role and/or the company, if anything?
- If you were leading Adhere, what would you do differently?
Lee stresses that his goal is to make his employees’ jobs better—and not to get upset about their responses. Asking folks to jot down thoughts beforehand also makes them more likely to bring up pressing (but uncomfortable) issues.
As Lee sees it, his job is to find growth opportunities for his team after each of these reviews. His employees will only stay if they’re challenged, he says, and without knowing what that ladder looks like, he can’t help them grow.
Don’t get offended by the answers you get
Once, in response to the question, “If you were leading Adhere, what would you do differently?,” an employee recommended that Adhere experiment more with its own marketing advice. When talking to potential clients, that employee wanted to make sure they were doing the things they actually recommended.
So Lee continued asking,
- Can you tell me more?
- What next steps do you propose we take?
“That comment made my ears perk up because I feel like we do try a lot on ourselves,” says Lee. “So either we’re not communicating to the whole team what it is we are doing marketing-wise, or we really aren’t doing enough in the eyes of our team. Either way, that means I have room to improve.”
2. Offer raises tied to business performance
Even if an employee goes the extra mile, you might not have money to spare for a raise or bonus. But that’s not the end of the world.
Tricia Park, president of 15-person branding agency Design At Work, found that giving raises based on company revenue, instead of individual performance, is the best way for her to keep employee retention high. It makes it clear that every employee has a stake in the business’s success.
“Just because you’re doing an amazing job, we may not have money to give you a raise,” she says. “Whenever the company has extra money to give raises, we do it.”
Park spells out the exact actions that will help employees increase company revenue—which will help lead to that raise. The tasks include:
- Bringing in new clients.
- Converting project clients to retainer clients.
- Increasing client retainer hours.
“When we do well,” Park tells her employees, “you make more money.” In a good year that can mean two to three raises for a single employee, and the opposite is true too.
But when the team is accountable for company-wide goals and pushes each other to achieve them, it makes them more likely to happen.
3. Use PTO as a reward for hard work
As a business owner, you generally take vacation when you want to (unless something’s on fire). Turns out, giving your employees that same freedom can be a powerful way to encourage more ownership thinking.
No, it doesn’t mean you have to offer unlimited vacation. But you can give your team more control over the amount of PTO they earn.
At Design At Work, all employees have the opportunity to earn additional PTO hours through something called “PTO Bucks.”
One PTO buck = one hour of PTO
So 40 PTO bucks = 1 week off
PTO bucks are awarded as prizes for company-wide competitions and games, and managers can also hand them out for amazing performance.
The program gives employees more autonomy over their PTO, and makes extra time off a direct result of their hard work, which is exactly how actual business owners experience it.
4. Help your team achieve personal goals through work anniversaries.
Park takes her employees’ anniversaries seriously. Like, really seriously.
At each milestone, employees receive the following:
- One-year anniversary: A company watch.
- Five-year anniversary: A trip for two (in the form of a $2,500 bonus they can put toward travel expenses).
- Ten-year anniversary: A new car, which is paid out in the form of $500/month for as long as the employee maintains full-time employment status at the company.
Even if you can’t afford all that, the act of setting aside an extra amount of money for something specific, like a car, can do a lot to make employees feel appreciated for what they put into your business.
Park came up with the anniversary gifts by looking at the average age of her employees. Since most of her staff starts when they’re in their mid-to-late twenties, they’re often married after five years. So she figured a trip with their significant others could be a really sweet perk to work toward.
At the tenth anniversary, her employees are often more settled and have mortgages, tuition, and kids. Having that extra money earmarked for a car payment takes a huge weight off their shoulders.
Anniversaries are celebrated at company-wide monthly meetings, which not only makes it extra special, but also helps motivate more junior employees.
As you build out a talented team, it’s important to find creative ways to keep them around. So look at the perks that you enjoy as a business owner and see how you can translate them to your employees.
Because when you treat and incentivize your team like business owners, they act like business owners. It’s as simple of that.