In a business with a dozen employees, the loss of even one can cripple a company’s effectiveness. So in the world of small business, employee retention has become an increasingly important topic.
Fortunately, it appears that small business employees in Connecticut and elsewhere are generally happy where they are, and are moving less frequently.
Almost half of all small businesses, 49 percent, experienced zero employee turnover in the past year, according to a National Federation of Independent Businesses poll.
The survey also revealed that nearly three-fourths of small businesses fired no employees in the past year and 87 percent did not have to lay off anyone due to economic reasons. And while the top reason for leaving a job was quitting for another position, 59 percent of small businesses say they had no employees voluntarily depart.
The NFIB survey included small business with up to 250 employees.
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The nationwide trends appeared to hold up in Connecticut as small business consultants and owners agreed that employee turnover has been drastically reduced over the past couple of years.
Rick Willard, an NFIB member and consultant from Rocky Hill, said that employment remained stable for businesses with up to 25 employees.
“Generally, I would say that the answer is that employees in most cases are satisfied where they are,” said Willard. “These small businesses have a fair amount invested in keeping their employees on and they are working to improve working conditions.”
Willard also credited the improvement in benefits that employees receive at small businesses compared to, say, five years ago as another impetus for employees to drift away from larger businesses.
“For the most part, the people working at a small business want to work at a small business and they’re happy to be there,” he said. “These are people that tend to be more entrepreneurial, looking to be more involved, and a small business fits their capabilities.”
There has been an increase trend towards the small business world, especially for people like Willard.
“There are more of my newer clients that have left large corporations and going out on their own, especially as consultants,” he said. “There’s a lot of back and forth when you look at the bigger companies, but that’s just not the case with smaller ones.”
Pat Caruso is in a good position to view the landscape of employee turnover at a small business. He is the owner of Associated Refuse, located in Newtown, with 14 employees.
It has been well over a year since Caruso said he has had to replace an employee, a fact that he directly attributed with being a smaller company.
“When you have a larger company and there is some type of problem, the employee has to go through levels of bureaucracy and it might get indirectly addressed,” he said. “Here, we’re able to address a problem quicker and on a much more personal level. You can go right to top and escape those levels of management.”
As Caruso was being interviewed, he shouted to an employee to ask if they were happy and got a positive reply.
“See, that’s how quickly I know,” he said.
The NFIB poll also showed that, more than ever, small business owners are focusing their efforts on employee retention in order to avoid dealing with a tight labor market.
“In that vein, I can understand why we’re looking to keep our employees and keep them happy,” said Caruso. “For example, we have someone on vacation right now and we’re working hard to fill in for that person. We’re small, we’re flexible, but we have to be quick to adapt if even one person is out.”
