Proven strategies for SMEs to improve employee retention

Let’s be honest - keeping great people is just as important as finding them.

In today’s competitive job market, employees aren’t just looking for a paycheque; they want to feel valued, supported, and excited about where they work. That can feel like a tall order for SMEs, but it doesn’t have to be.

In this post, we’ll explain employee retention and share proven (and practical!) strategies that growing businesses can use to keep top talent around for the long haul.

Employee retention definition

Employee retention means employing strategies to keep talented employees within an organisation. You can achieve this by making your company more attractive, so they choose to stay with you instead of going elsewhere.

Not sure where you currently stand? Here’s how to accurately calculate your company’s employee retention rate to get a clear picture before diving into improvements.

Six employee retention strategies for growing companies

Investing in talent retention can save your company thousands each year. Did you know it can cost you the equivalent of six to nine months of an employee’s salary to replace them?

This insight from Centric HR highlights the importance of adopting the right strategies to keep your team happy and engaged.

Here are six practical retention strategies for growing businesses:

1. Perks are cool, but ownership is better

You don’t need an FTSE 100 budget to keep your best people engaged. As an SME, you’re already used to doing more with less. Offering meaningful perks like flexibility, paid time off or even better, a stake in the company can make all the difference. 

When people feel like they own a part of what they’re building, it creates a deeper level of commitment and motivation. It’s not just about the perks anymore; it’s about creating a sense of purpose and long-term connection.

So, how do you set up a share scheme? It doesn’t have to be complicated. We’ve created an easy-to-follow step-by-step guide that covers everything from the benefits to implementing a plan that works for your team. Check it out!

2. Hire smart, grow strong

Building a successful business starts with building the right team. If scaling up is your goal, attracting the right people should be a top priority for employee retention.

Craft clear, detailed job descriptions to attract the best candidates. Look beyond resumes; assess cultural fit, values and growth potential. Hire people who are not only qualified but also bring fresh perspectives and a passion for your company’s mission. 

3. Make onboarding memorable, not a checklist

According to an HBR study, 23% of new hires turn over before their first anniversary.

When new team members come on board, help them settle in from the start. Personalise their resources and training to fit their role, and set clear and achievable goals for the first few months. Celebrate the small wins along the way to keep them motivated and confident.

And be sure to check in regularly to make sure they feel supported.

4. Define the lanes and let the team own it

Everyone needs their space to shine! By setting clear roles and responsibilities, new joiners know exactly what’s expected of them and can confidently own their work. 

This approach builds trust, allowing individuals the freedom to excel without the need for constant oversight. Plus, it helps avoid feeling overwhelmed or confused.

When team members are trusted to do their jobs without being micromanaged, it not only boosts morale but also drives productivity.

Research by Inpulse, involving approximately 50,000 UK employees, found that 81% of those who felt trusted by their line managers were engaged at work, compared to just 28% of those who didn't feel trusted.

5. Where ideas grow, talent stays

One retention strategy that often flies under the radar, but is so important, is actively welcoming new ideas. Every business thrives on fresh perspectives, but it’s not just about being open to them. 

It’s about creating space for them, like anonymous surveys, idea-sharing sessions, or simply encouraging contributions in team meetings. When people feel heard, they stay engaged for the long haul. 

For instance, BankingGeek, a small financial firm, holds quarterly “Ideas Meetings” that led to a central Knowledge Hub—saving 500+ hours of research time and £30k. A simple structure to gather ideas made a real impact on engagement and efficiency.

And don’t forget to celebrate the wins, encourage teamwork, and build a workplace with good vibes!

6. Don’t just hire talent, help it thrive

Give your team real opportunities to grow, and they’ll be more likely to stick around. 

It’s simple. When people feel like they’re learning, developing new skills, and moving forward in their careers, they’re not looking for the exit. They’re excited about what’s next within your company. 

Whether it’s opportunities to take classes, attend conferences, follow clear progression paths, or take on new challenges, investing in your team’s growth shows you’re in it for the long haul, and chances are, they’ll return the favour.

It’s a win-win that builds loyalty, boosts motivation, and helps your business grow, too.

To wrap up

At the end of the day, employee retention isn’t about throwing money at the problem. It’s about building a workplace where people genuinely want to stay; where they feel heard, valued, and part of something bigger.

The good news? You don’t need to be a big corporation to make it happen. With share schemes, your company can become a place where great talent grows and stays.

Curious about how equity could fit into your retention strategy? Vestd makes it simple to get started.