It has become harder for companies of any size to hire. Unemployment hovers near record lows while job growth has continued, a recipe that has produced a labor shortage, which is especially tough on small businesses that lack huge recruitment resources and fully-staffed HR departments.

Whereas a large company can function without dozens or hundreds of project managers, a smaller company would find itself paralyzed or compromised by the loss of even one person. To avoid interrupting operations, small business owners must successfully retain their employees. Obviously paying market-rate salaries is key to keeping workers, but money isn't the only thing that prevents employees from heading out the door (a good thing for cash-strapped small companies).

Two women talk at a large table.

Talking with your employees can help you retain them. Image source: Getty Images.

As a small business owner or manager, you have tools that larger companies can't wield as easily. Utilizing these strategies can help you overcome the major hiring challenge threatening to upend your company.

1. Offer flexibility

At a small company, you can offer your employees schedules that meet their individual needs. That may mean working around school schedules for parents, or letting workers perform some of their work at home. It could be letting people come in late or leave early. Create a work/life balance that keeps each employee happy while empowering them to do their jobs well. 

Regularly encourage your workers to take advantage of this flexibility and make sure managers aren't dissuading people from utilizing the flex scheduling. Trust your employees not to take advantage of the system.

2. Provide training

You can offer your employees the ability to learn new jobs. That could include cross-training -- teaching workers skills needed for other positions -- or mentoring them to become owners. The idea is to make sure employees learn skills that benefit their careers (an added benefit is that they should benefit your company as well).

Consider bringing in outside experts to teach new skills or reimburse for tuition at local community or state colleges. You could offer a certain educational stipend each year for employees to spend at their discretion. There's no one correct method for doing this, so be creative and open to ideas. 

3. Share the wealth

Big companies can offer stock or even profit-sharing, but in most cases, one employee can't make a major difference in the fate of the company. At a smaller business, every employee can affect the bottom line.

If you give workers a direct way to profit from the company's success -- profit-sharing or a small ownership stake -- you bind their fate to the company's. That should pay off not only with increased loyalty, employees tend to work harder when they have skin in the game.

If you treat workers -- maybe everyone, or maybe just key employees -- as owners, they should be motivated to think differently. An employee who has no stake might not be worried about expenses or margin, but one who does will be more inclined to think about improving those metrics.

Treat people as individuals

As a small business owner or manager, you don't have to take a one-size-fits-all approach to employees. You can talk with every person who works for you and tailor their employment experience to be mutually beneficial.

Listen to the people who work for you. If they want something that's reasonable -- even if it's not typical -- give it to them. That will help you with retention and might even aid in recruiting. Be a great place to work, a company that listens to its employees, and you'll have an easier time holding onto your workers.

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