This year, Inc. Magazine reported unemployment is at a record low. However, for many small business owners the race is on to retain talented employees. So, what makes hanging on to talent such a struggle for small businesses?


The challenges extend well beyond the larger paychecks and increased incentives that major corporations have the bandwidth to offer their staff. Small businesses must get competitive in return, by recognizing the strengths startups have to offer employees. They must also examine and nip any potential weaknesses, such toxic leadership, in the bud immediately.

Attracting and retaining great employees must also be a year-round commitment, not a tactic to pay attention to for a few months out of the year. Here’s a step-by-step guide for what small businesses must focus on to keep their talented employees on the team.

1. Reflect on your existing company culture through a “State of the Union” lens.

A traditional State of the Nation address is delivered by a political figure, such as the President of the United States. This message provides citizens valuable information about the nation’s economic report and allows room to propose new national priorities.

Small businesses may conduct a State of the Union via a company culture audit. Examine the following aspects before you begin so you may better understand why talent stays and exits.

Seek out the real reasons behind employee turnover.

These often vary depending on the employee’s circumstances, and do not always reflect poorly on the employer either. For instance, an employee may decide they would like to go back to school full-time. However, others may cite other reasons such as poor management or feeling underappreciated as stressors. Listen to what these team members have to say. Use their reasons as building blocks to create a stronger company culture.

Are your employees too quiet?

A quiet employee isn’t always cause for alarm. Some may simply be focused on doing their jobs. However, it does become an issue when you ask your team for feedback and nobody speaks up. Determine what is causing them to be quiet and how you can shift the culture accordingly, so all voices know they can speak up and share their thoughts and ideas.


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Bring in a third party to observe company culture from an unbiased standpoint.

If they are able to detect a toxic environment that lacks fun and motivation, without even working there, it’s time to hit refresh on communicating your mission and values.

How do you view your business?

This is perhaps the hardest question of all to ask, but it’s also the most crucial. Do you, the leader, like your business? Do you see it on the right track to success, or floundering? The way you view your company ultimately determines how others see it, too. You want everyone, from customers to job applicants, to see it in the best possible light.

2. Take your time hiring.

One of the biggest mistakes small businesses make is being quick to hire new employees.

Why does this happen? A few aspects come into play here. Small businesses may have too heavy of a workload and need more hands on deck to help out. Others may be enjoying a quarter with a higher than average cash flow, giving them the chance to finally recruit new talent.

The best-case scenario is to hire slowly. Seek out employees that do more than look good on paper. Look for the ones that are a fit within your company culture. Hiring one bad seed, no matter how accomplished they may appear to be, can have a destructive effect on the small business in the long run.

If you struggle to find the right hire for the job, don’t despair. You may want to consider promoting from within. Examine your existing talent roster to see if there are certain employees that may be adept at tackling other duties. Ultimately, doing this helps create opportunities for advancement within the business. This allows the talented team member to feel valued and challenged now that they can see they have a bright future at your business.

3. Create a better onboarding process.

An onboarding process, or lack thereof, doesn’t necessarily determine whether talent will stick around at your company. However, the onboarding process for a small business is a major part of its first impression. Essentially, your small business should onboard employees in the same manner that you would like to be brought on to a company.

What should happen during proper onboarding? Be sure to cover the following areas.

Prepare the new hire’s workstation.

Whether they have an office or cubicle, make sure it is fully furnished, has a computer, phone and extension (as needed), and a key or badge to getting into the building. You should also have a working email address ready for the new talent, and all documents and an employee handbook ready to go.

Introduce the new talent to the team.

Begin with a companywide email introduction about the new hire coming on board and the date they will joining the crew. Once they arrive to the workplace, introduce them to everyone. Give them the chance to meet and greet and get familiar with the building.

Conduct orientation.

Orientation may be conducted on a one-on-one basis or with a group, depending on the number of new employees brought on board. This is your time to provide the big picture explanation of the business, what it does, and the role the talent has in its success.

Establish a 30-60-90 day plan.

What is a 30-60-90 plan? This is a plan that outlines the responsibilities and duties that the new talent is expected to accomplish. These expectations open over a gradual 30-day period before moving into 60 days (roughly two months) and 90 days. 90 days is three months, which is the standard probationary period for new hires in any industry.

4. Assign a mentor.

This is not necessarily a requirement for retaining talent, but having a mentor can be extremely useful for new hires. In the workplace, one might have what is known as a peer mentor. This may be a co-worker or manager. They are there to help guide you in your new role, answer questions, teach you new skills, and provide additional support and encouragement if you need help acclimating to the new position.

5. Conduct a “stay interview.”

A small business can have a thriving company culture, emphasize hiring for the right fit, create a strong onboarding process, and partner talent with a mentor to champion them along their journey. However, even with all of these strengths, plus company benefits like health insurance, free snacks, and flexible scheduling, it still might not be enough to retain talent.

Enter the “stay interview.” According to The Wall Street Journal, small businesses benefit from sitting down with long-term employees to ask why the talent stayed, or what could keep them staying within the business. This is an excellent chance to speak candidly, one on one together, and determine what they enjoy and don’t enjoy within the small business. It’s true that it may not keep the talent there, especially if they have made up their mind otherwise. What a stay interview does do, however, is give you the chance to change or improve aspects of the business based on their feedback that works to its year-round benefit.

Deborah Sweeney is the CEO of MyCorporation.com which provides online legal filing services for entrepreneurs and businesses, startup bundles that include corporation and LLC formation, registered agent services, DBAs, and trademark and copyright filing services. You can find MyCorporation on Twitter at @MyCorporation.

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