Staff turnover affects small businesses like any other, but reducing turnover with limited resources can be difficult. In this article, we explore how small businesses can put a talent management strategy in place and find the right tools to support it.
How does staff turnover affect small businesses?
Turnover is defined as the percentage of staff leaving your company over a given period, which, according to Monster, is around 15 per cent a year, although this varies between industries. In engineering, for example, it can be as low as 3 per cent, while in pensions and insurance it’s above 18 per cent, according to a 2018 survey by XpertHR.
Reducing turnover rates means understanding what drives employees to look elsewhere. Lack of personal progression is a significant factor here. Docebo surveyed 2,400 people in the US and UK in December 2018 and found that 36 per cent would quit a job because of a lack of learning and development opportunities. For younger workers, this rose to nearly half (48 per cent).
What is talent management?
A proper talent management strategy can help you reduce staff turnover by keeping them engaged from the moment they first see your job ad. The Chartered Institute of Personnel and Development (CIPD) has a useful working definition of talent management on its website:
- Talent management is the systematic attraction, identification, development, engagement,
- retention and deployment of those individuals who are of particular value to an organisation,
- either in view of their ‘high potential’ for the future or because they are fulfilling business/operation-critical roles.
There are several important aspects to note here. Good talent management must focus not only on attracting the right people to your small business, but on retaining and developing them for your mutual benefit, and measuring the return on investment.
HR headaches for small businesses
Talent management and employee engagement are two of the most persistent issues for HR managers in small businesses. With limited time and resources, how do you implement and stick to a talent management strategy that works for you?
The good news is that there is a range of software to help HR professionals and small business owners rise to the challenge. Traditionally, large enterprises have used HR software to help them manage thousands of employees, with functions ranging from simple admin and logging of employee information to more advanced features like absence management, performance management and recruitment.
This technology used to be costly to implement and maintain, but thanks to cloud-based software as a service (SaaS), HR software is now within reach of small businesses, too. In August, we surveyed nearly 300 employees from companies with less than 250 employees and discovered than 43 per cent of them use HR software. However, 45 per cent don’t, with price being the main factor: 40 per cent say they would consider using a free product, and a further 30 per cent say they would be prepared to pay up to £10 a month.
How can talent management software help?
Talent management software makes it easier for you to maintain a high-performing, engaged workforce and reduce staff turnover. It helps your small business streamline, automate and manage many of the aspects of a good talent management strategy, from recruitment to training. Here are three key application areas:
When a new person joins your company, their experience on day one can significantly impact their future levels of engagement and productivity. If their onboarding experience is poor, they’re less likely to stick around, too.
Onboarding features within talent management software help you ensure that the recruit feels informed, welcomed, and valued. One opportunity for this is during the period between signing a contract and starting a job, which can take months in some cases. Talent management software can automate some of the communication to maintain your connection with the new starter and inform them about some of the aspects of their new role – basics like safety procedures, and IT policies –so they’re ready to start on day one.
How often have you seen employee objectives written down in documents that get saved onto a hard drive and not opened again until their next performance review a year later? Talent management software can help you streamline processes into one place, with outcomes that are transparent to managers and employees.
If you’re a small business owner, there’s probably more vital company information stored in your head than there is on employee-accessible documents. So how you do you ensure your staff have the proper training to go out and serve customers?
Software with learning features lets you develop libraries of training content, monitor employees’ progress, close skills gaps, and meet your company’s compliance requirements.
There are a number of talent management software solutions aimed at small businesses that can help you. With the right software by your side, you can overcome any difficulties related to staff turnover.
Sonia Navarrete, Content Analyst, Capterra