8 Employee Retention and Recognition Ideas for SMEs

8 Employee Retention and Recognition Ideas for SMEs

Employee retention may seem costly for a lot of SMEs. But did you know that employee turnover costs your business even more? A recent study conducted by the Center for American Progress estimated that:

  • It costs 16% of the annual salary to replace an employee at a high-turnover, low-paying (under $30,000 per year) job. Replacing a $10/hour sales assistant, for instance, will cost your business around $3,300.
  • Replacing someone on a midrange position (earning $30,000 to $50,000 a year) will cost 20% of the person’s annual salary.
  • Finally, finding a new top manager or executive can cost a company up to 213% of their salary e.g. the cost to replace a CEO earning $100,000 per year can reach $213,000.

Considering the figures above, it should come as no surprise that big companies are heavily investing in employee retention and employee appreciation initiatives. Small businesses are lagging in this department. One of the reasons is that they don’t have as much budget to spare on different perks, bonuses and other leverage that could persuade a valuable employee to stay.

But here’s the thing: it’s the small things that count. Throwing lavish corporate parties or organizing company-wide trips isn’t the only way to show how deeply you care about your team. You can dole out small, affordable tokens of employee recognition daily and create a unique work culture that positions your company as an amazing employer.

Below is a big list of employee retention strategies that you can put to a test with little upfront investment.

Employee Appreciation Ideas

One of the biggest reasons why people love working for smaller companies is that they can easily see how their daily work makes an impact. And when people find their job to be meaningful and fulfilling, they are less likely to churn.

So where do you start with staff appreciation? We have lined up several great ideas for you.

1. Increase Lunch Breaks

A hearty warm meal in the middle of the day, can it ever compare to a sandwich munched at the desk? Of course not! But a desk lunch is what most American employees can afford during their less than a 30-minute break.

Compare this to France, where an average lunch break is about an hour long. Plus, most employees are provided with a booklet of food vouchers (as part of their compensation package) to spend at the nearest brasserie, cafe or supermarket. Small businesses and stores, especially outside of big cities, will also close doors for 2 hours during lunchtime, so that everyone could relax and enjoy food in a good company.

In Greece and Spain, lunch is considered the biggest meal of the day and people usually leave the workplace around 2 pm, go home to have a proper several-course meal and resume work around 4-5pm.

Allowing a 2-3 hour lunch may not be feasible for your small business. But extending your staff breaks for extra 20-30 minutes on various occasions can massively improve the collective mood.

2. Ask Peers to Nominate The Best Employees

“Employee of the Month” is a popular appreciation strategy in the business books. However, most winners are selected by the upper management or a supervisor, who may not always have the full picture of the entire team’s performance.

Hence, to make the process fairer, ask your staff to nominate their colleagues. This way you’ll reduce the potential conflicts associated with biased decision-making, and improve involvement and interaction with your recognition program among the team.

P.S. You can grab an attractive free employee of the month certificate at our website.

3. Brag Your Team and Their Achievements on Corporate Social Media

Don’t be shy to publish praise on your company’s social media accounts. First of all, public recognition is a powerful extrinsic motivator that can push your people to do their best job. Secondly, by curating pictures, news and updates about your team you develop a strong employer brand. The latter creates a snowball effect: the more you highlight how amazing your people, organization and culture are – the higher are the chances of attracting like-minded skilled hires to your company.

Or, if you are not super active on social media, you can also feature your top employees on your website.

4. Poll Your Employees to Know Their Needs

The easiest way to understand what your team really wants is to ask them directly. Instead of second-guessing whether they’ll be happier with a pizza or BBQ party for celebrating a recent achievement, post a quick survey and ask ‘em to vote.

To get honest, uninhibited feedback, make that survey anonymous. Also, keep it short and on-point. If you already have a specific appreciation idea in mind, post a multiple-answer choice question so that your staff can select the best alternative.

If not, just forward a form asking your team to spell out how exactly they’d want to be recognized for their achievements.

5. Practice Appreciation Consistently

Kick in every staff meeting with a quick word of appreciation for peeps who did a great job the other day. Send quick personalized “thank you notes” or certificates of appreciation regularly. Don’t forget about birthdays and other important events in your team’s lives. Keep your office door open and make it clear that you are always there to listen to your team’s suggestions.

Employee Retention Ideas

While recognizing your staff’s achievements and successes is important to reduce employee turnover, on some occasions you may need to switch to more proactive action. After all, if your top employee is being poached by a competitor, or they are not happy with the inflexible hours at your company, just showing that you value them may not be enough.

When you don’t want to lose important expertise and scramble to search for a replacement, consider employing the following employee retention strategies.

6. Promote From Within Your Company

Most frequently, people start looking for a new job when they feel that they’ve outgrown their current position. So don’t make your key staff feel that they are close to hitting the ceiling. Whenever you need to fill in a senior position, always consider your current employees for promotion over hiring outside professionals. This way others will also see that there’s a real chance for advancement within your small company.

But what if I don’t have that need for another senior position? Well, you can also create horizontal career growth opportunities for your staff. In this case, you are increasing the employee’s scope of work within their current position (as well as the pay) and foster them to develop new skills and expertise to perform their duties.

7. Improve Your Hiring Process

Most SMEs rush to hire someone for the role ASAP. They think that the faster they pick – the fewer HR expenses they incur. However, such an approach is very shortsighted. Because a sub-par hire is way more likely to leave your company within a short time, than a well-rounded cultural fit.

Here’s proof: 37% of hiring managers state that new hires would have worked within the same company for longer if they were provided with better information during the hiring process. Poor explanation of the role and duties, along with ineffective onboarding experience for new people builds a foundation of negativity in the new job. And this is something you should avoid at all costs.

Hence, be forthcoming about the realities of working for your company. Mention both the pros and the cons (e.g. limited vertical career growth options, small office etc). Don’t sugarcoat things just to persuade someone to work for you. Transparency is hugely important if you want to hire the right people and retain them in the long term.

8. Find and Eliminate The Common Pinpoint of Workers in Your Industry

Small businesses do not have the luxury to entice workers with high paychecks and retain them with big bonuses. But they can choose to pursue another route: address the common pain point workers in your industry experience.

By analyzing industry trends data and employee surveys, you can quickly identify the main point of frustration. For instance, fast food industry workers often have taxing schedules. They are asked to work late/night shifts, need to clean a lot of mess created by the night crowd and often have to deal with not that cheery customers.

You, as an employer, have the power to alleviate that pain point. Sure extra dollars may seem any job seem more worthwhile. But at some point, overall frustration beats the paycheck and people quit despite being offered a raise.

As a fast-casual restaurant you could, for instance, offer more family-friendly schedules to older people on your team. Also, you can limit the number of late/night hours to just X per month for every employee. Finally, you can also consider hiring additional people who can help combat the pain points – additional cleaners or dishwashers; and perhaps compensate taxi/Uber fare for staff who’s forced to leave their job late at night.


As the adage goes: offence is the best defence. Instead of letting your employees quit too early into their tenure, work on creating a “sticky” work culture. One that’s aimed at recognizing the person’s daily achievements, alleviates the common employees’ pain points and provides the person with the regular motivation to their best job. You now have the exact strategies to accomplish just that!

Photo by Freestocks

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