Small Business Strategies for Retaining Employees in 2023

| January 05, 2023

In today's worker-friendly labor market, employers of all sizes are facing employee attraction and retention challenges which will likely continue through 2023. Efforts to win over employees often comes with a significant time commitment and price tag. For many small businesses, this can be a challenge due to limited resources. There are a few important trends that may help employers create effective strategies to engage and retain top talent in 2023. 

1. Employee benefits are important, especially in the upcoming year. 

Last year’s labor challenges revealed how offering competitive benefits is critical when vying for talent. The importance of employee benefits is expected to increase in 2023. With the current economic downturn, small employers likely have limited funds for benefits this year. As a result, many smaller organizations are tailoring their benefits offerings to meet the specific demands of current and prospective employees, including offering nontraditional benefits such as wellness programs and pet insurance. The best benefits offerings will vary in each organization depending on the needs of the workforce, but they can be leveraged to attract and attain the right employees.

2. Creating a path for growth is a key employee retention strategy. 

In 2022, many small businesses focused on upskilling employees and providing avenues for career advancement out of necessity to address their labor challenges. Creating paths for career growth has proven to be one of the most effective employee retention strategies since employees generally feel more satisfied at work when they’re provided opportunities to learn new skills and gain experience. Due to the current economic uncertainty, this will remain a key attraction and retention strategy for small businesses in 2023.

3. Offering a flexible work environment still remains a priority for many workers today. 

Surveys overwhelmingly indicate that many employees continue to prefer flexible work options afforded to them since the outset of the COVID-19 pandemic. These offerings include work-from-home arrangements, hybrid work schedules and flexible work schedules. The feasibility of a small organization being able to offer these types of flexible arrangements will vary, but these offerings remain a priority for many workers today.

4. A strong workplace culture is also important to workers. 

In 2023, more employees are prioritizing working for organizations with a strong culture. Even if resources are limited, small employers can foster a desirable workplace. A strong and healthy workplace culture can help retain employees and, in turn, create an environment that’s attractive to prospective employees. This may include training managers to identify employee burnout, designate fair workloads, be transparent about pay and create an inclusive environment.

5. Employee recognition programs also a key ingredient to employee retention. 

Many employers prioritized employee recognition programs, such as celebrating anniversaries and milestones, to improve retention rates in 2022. These programs allow organizations not only to celebrate outstanding employees but also to signal to others that their hard work doesn’t go unnoticed. As these efforts don’t carry high costs, they’ll be an effective retention strategy for small businesses in 2023.

Like most organizations, small employers face a set of challenges with attracting and retaining the employees they need in 2023. Fortunately, small businesses have the ability to stay agile and should consider what strategies they can leverage to compete in today’s labor market.