What Startup Businesses Can Do To Retain Employees

Startup businesses are always looking for ways to develop and retain their best employees. The US Office of Personnel Management estimates that $1.3 billion is spent annually on programs curated to keep employees happy.

With so many businesses spending money on their employees, why do employee turnover rates remain high? It turns out that many entrepreneurs aren't doing enough to keep their employees happy.

This is understandably challenging because every business and its owners are different. Still, there are a few things every entrepreneur can do to help develop a positive and productive culture that allows employees to stay at a startup.

Here are seven of them:

1. Hire people who understand the nature of a startup company

Startups are all about rapid and constant change. The business model can change, the team can change, and even the target market can change, so if you're not prepared for this and have employees who aren't ready for this, you’ll have problems.

Startup culture is different from corporate culture, making it harder for new hires to fit in, so you want passionate people who understand your mission and go above and beyond to achieve it.

A great way to find these types of people is by looking at candidates' experience — if they've worked at similar start-ups before or have experience with small businesses in general, they're probably going to fit right in with your team.

2. Show appreciation

As a small business owner, you want to create an environment where employees can thrive. One of the best ways to do so is by providing support and appreciation for their hard work.

Acknowledge individual achievements, and celebrate wins as a team. Recognition doesn't have to be expensive; it can be as simple as sending a thank-you note or giving an employee a small gift card or award from time to time.

Here are some tips for showing appreciation at work:

  • Practice gratitude

  • Make people feel safe by listening to their concerns and acting on them

  • Give feedback regularly

  • Trust your employees with big projects

3. Set clear and realistic goals for your employees

A clear and realistic goal will help them understand what they're working toward and why they're doing it. For example, let's say your company is focused on increasing market share in a specific product category.

If your employees are aware of this goal, they'll be able to see how their work contributes to it — which gives them the motivation to do their job well and makes them more likely to stay with your company.

On the other hand, if you don't communicate your goals clearly and frequently, your employees may not realize how their work fits into the bigger picture. This can make them feel like they're not contributing much value or you are not paying them enough for their contributions.

Either way, this can make them want to look for opportunities elsewhere.

4. Provide flexible work hours

One of the best ways to retain employees is by offering flexible work hours. Set up an open office environment so employees can work there when they want.

Let them set their schedules, so they don't feel like they have no choice but to take off at 4 PM every day. Give them the option of working from home or coming into the office on weekends.

You may also want to consider hiring part-time employees instead of full-time ones since it will be easier for them to pick up extra shifts when needed rather than asking one person to work overtime all the time.

You must remember that flexible hours depend entirely on the nature of your business. Some businesses require employees to be on-site, while others can accommodate partial or fully remote. Either way, some sort of work flexibility will keep your employees close to your business.

5. Embrace diversity and inclusion

Employees want to feel like they're valued and respected by their companies, and this starts with embracing diversity. Diversity isn't just about race or gender; it includes age, sexual orientation, religion, ethnicity, and needs.

Your company should be welcoming people from all walks of life — not just because it's the right thing to do but because it will help you attract top talent… and retain them.

6. Pay your employees fairly

If you’ve ever had a job, you know how important it is to be paid what you’re worth. If you don’t feel like you are earning enough, it can be challenging to focus on the tasks at hand.

Fair pay is one of the most important things you can do for your employees, no matter how small or new your business is. If you can't afford to pay them as much as other companies might, make sure they know that they're valued and appreciated at work.

7. Avoid micromanaging your team

One of the top reasons employees leave their jobs is because they feel micromanaged. The problem with micromanagement is that it creates a toxic work environment, where employees feel like they're not trusted or respected.

They will eventually walk away from your company.

It also prevents you from being an effective leader.

Here are five ways you can stop micromanaging your team and start building a better culture:

  1. Don't hold back on praise

  2. Avoid giving too much advice

  3. Work on building trust

  4. Set clear expectations

  5. Let go of perfectionism

See more on micromanaging: The Top 5 Mistakes That New Managers Make


If you want to keep your employees productive and motivated, educate them about the business. Show them the future and share your vision as well. Let them know what makes your company different and how you see it develop in the coming years.

Most importantly, let each team member have a voice in the process. Be flexible and approachable, ask for suggestions on big decisions, and include these contributions from every employee when planning significant changes.

By doing this, you will not only retain talent but also gain valuable insight into how each of your employees thinks so that you may implement a business strategy that suits them best.

Replacing employees can cost more than $40,000 in training, recruitment and uncertainty. And you're still left with a potentially unhappy employee. A better solution is forgetting the hassle of recruiting/replacing and instead focusing on your core business. With Glam Link as your recruitment partner, we effectively match candidates to positions.

Our recruiters understand what makes up your startup culture – because it's our own company culture. We develop relationships with hires to stay longer and are more productive and loyal to you and your business. See how Glam-Link can improve your retention rate by filling out the Contact Us form below today!

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