Turnover can have a detrimental impact on company morale, leading to a domino effect whereby people begin to quit simply because their colleagues did. There’s also reputational risk to consider. If word spreads that a company churns through staff, you’re less likely to secure talented employees.

For small businesses, it’s hard to compete with large corporations when it comes to incentives for staff retention. This is especially true when it comes to disengaged millennial employees, who are three times more likely to change jobs year-on-year than workers of the preceding generation. So what measures can SMEs implement to hold on to good staff?

Regularly review pay

Regularly reviewing compensation and benefits is important. Even when staff haven’t asked for a raise, they should be rewarded for great performance. Lower wages correlate with higher staff turnover.

Be more flexible

Flexibility is the number one benefit that millennials want from their workplace. They would change jobs, move cities and even take a pay cut to obtain it. Nearly every business can now offer some form of flexibility, thanks to mobile devices and cloud computing. Studies even show that flexible workers are more productive, happier and take fewer sick days.

Encourage engagement

Lead by example. Staff are 55 per cent more engaged and more likely to stay at a company when managers model a sustainable way of working. Transparent management directly correlates with employee happiness, according to Gallup Research. Giving employees meaningful work and acknowledging their efforts is the quickest way to build trust. From that same Gallup study, staff with supportive supervisors are 1.3 times more likely to stay with the company and are 67 per cent more engaged.

Offer benefits

Benefits don’t have to be financial. Training and mentoring are both highly valued. Smaller companies also have the capacity to fast-track promotions and give workers greater responsibility. For lifestyle benefits, SMEs should consider partnerships. Although you may not be able to install a gym, you can partner with a local fitness centre to offer free or subsidised memberships.

Hire the right people

If you hire the right people from the start, they’ll be less likely to leave. Referral hiring often has a higher success rate, with referral employees typically staying longer with a company than candidates recruited from job boards.

It’s unrealistic to expect today’s employees to stay with a company for life, and sometimes welcoming new talent is the best way to shake things up. But given how much it costs to train new staff members, and how critical every member is in a smaller team, it makes sense to retain valuable talent where and when you can.