14 effective recruitment and retention strategies

Key takeaways

• Talk to your current employees to gain insights about your recruitment and retention strategies and how to improve them
• Launch a mentorship program, book club, or automated recruitment marketing campaign to help you recruit top talent
• Invest in wellness programs, continuing education, and bonus structures for team members to increase employee engagement and retention

As a business owner, one of the most powerful assets you have is your staff. A top-notch employee can be the difference between successful product launches or total flops, a loyal customer and a disgruntled one, or a positive online review and a critical one. And yet, as many small business owners can attest, it can be difficult to find (and keep) great employees.

Finding great employees starts well before the onboarding process. As soon as a promising resume comes across your desk, you’ll want to give the candidate your full attention. With the right recruitment and retention strategy, you can prove to candidates that you’re fully invested in their success.

Learn more about must-have recruitment and retention strategies for every small business owner. With the right implementation, you can find—and retain—valuable employees to better serve your customers.

What is a recruitment and retention strategy?

Put simply, a recruitment and retention strategy is a conscious plan to attract and retain top talent.

In 2023, the White House reported an average 3.7% unemployment rate—the same as in 2022. December 2023 marked the 23rd straight month with an unemployment rate under 4%, a 50-year record. In terms of recruitment, record-low unemployment means one thing: It’s an employee’s labor market.

That means small business owners need employees more than job seekers need them. When evaluating potential employers, the best candidates can pick and choose who they want to work for.

With the right employee recruitment and retention efforts, you can boost your chances of winning the battle for the right talent. Plus, when you find a good-fit employee to successfully fulfill a new role, you can create a welcoming, positive job environment that makes them want to stick around.

The result? You increase your company value proposition, increase employee retention rates, and decrease turnover costs—all helping to grow your business. The right recruitment and retention strategy not only boosts candidate and employee morale but also boosts your bottom line.

How do you implement an effective recruitment and retention strategy?

Whether you’re starting from square one or going back to the drawing board, follow the steps below to give your recruitment and retention strategy a reboot.

Talk to your current employees

Your current employees—whether they’ve worked with you for months or several years—know what it’s like to apply for, interview for, and ultimately fulfill a position at your business. Therefore, they’re the perfect focus group on how to revamp your hiring process.

Ask them how they felt throughout every step in the process, from submitting their resume to interviewing and onboarding. What did they find most engaging and informative? Were there any areas of frustration? What did they think of your communication style and frequency? Did they get the information they needed throughout the onboarding process? Encourage open communication, and collect anecdotal data to see if you can find areas for improvement.

Take a hard look at your recruitment metrics

Whether you realize it or not, you have plenty of quantitative data to gauge the effectiveness of your recruitment strategy.

Look back at the past 12 months and answer these questions:

• How many candidates applied to work for your company?
• How many made it to the interview process?
• How long did it take from submitting an application to receiving a job offer?
• Once they received an offer, how long did they work for your company?
• What is your employee turnover rate for new hires?
• Did you have any qualified candidates turn down an offer or exit the recruiting process?

The numbers you end up with can help provide insights on where to tweak your hiring process.

See how you can be a resource to job candidates

Just because a candidate doesn’t become a full-time employee doesn’t mean they aren’t valuable to the company.

Don’t be afraid to have candid conversations with candidates throughout the application process. See if there are educational or career development resources you could provide to your talent pool (more on this below), even if they don’t become full-time employees. Ask them if your mode, channels, and frequency of communication is satisfactory to them. Don’t hesitate to ask the point-blank question, “Is there anything we can do to make the interview process better for you or future candidates?”

Job candidates talk amongst each other. If a former candidate tells their friends, future colleagues, or family members about a negative experience applying for your company, it could decrease your chances of recruiting top talent in the future.

6 recruitment strategies for attracting new talent

There are many ways to improve your candidate experience. Try these six tips to recruit ideal candidates who will want to stick with your company for years to come.

1. Assign a dedicated point of contact

Even if you own a business now, you probably applied for a job at some point in the past. As such, you know the most frustrating part of the hiring process: submitting a resume or going through several rounds of interviews only to be met with radio silence.

Assigning a dedicated point of contact for job candidates can help prevent any drops in communication. Have this person—whether it’s an executive or other member of the hiring team—introduce themselves to the talent community and provide their preferred method of communication.

Whether through a Slack channel, email, instant messaging, or phone, ensure this person is accessible to high-quality candidates to answer any questions throughout the application process.

2. Host an onsite social hour for job candidates

Consider hosting events where existing job candidates can see your brick-and-mortar during opening hours and witness current employees in action. This allows them to get a feel for the work environment, culture, and responsibilities, and it can help them evaluate if it’s the right fit for them—either exciting them even more about the job or helping them realize it may not be what they thought.

These events also give your talent community the opportunity to ask questions, gather information on your company culture, and get professional development advice. Ask a representative from your company—be it an associate or executive—to provide guidance, field questions, or provide a short talk on their experience at the company.

3. Let candidates shine with hands-on assignments

Having job candidates complete hands-on assignments during a job interview process gives you a unique view of their abilities, going well beyond what a resume or standard interview questions could provide. This approach can give you a sense of a candidate’s skillset, creativity, and expertise with job-specific tasks in a real-world context. It also gives candidates the chance to show off their strengths. Plus, seeing a candidate in action can help lower bias since you’ll be evaluating them based on their actual performance instead of how you think they might perform based on things like their answers to interview questions.

If you own a bar, you could have them whip up a specialty cocktail. If you run an event planning business, the candidate could design a table arrangement for a specific type of event. If you run an auto shop, have them evaluate an out-of-commission car and give their diagnosis.

4. Write clear job descriptions and identify growth opportunities

When looking for new recruits, some of the best strategies are also the simplest. Case in point: Tell people exactly what they can expect from each role.

Write detailed job descriptions outlining daily responsibilities, expectations, qualifications, and who they will be reporting to. In essence, make sure each job post paints a clear picture of what a day on the job really looks like.

Lastly, on the job post and throughout the interview process, share growth opportunities for the position. People are looking for long-term careers, and upward advancement could be a key selling point with new candidates.

5. Rethink how you source employees

As many business owners know, sometimes the challenge isn’t getting more candidates, but getting the right candidates.

If you’re revamping your recruitment efforts, you might want to rethink where you source candidates. If you’ve been posting job descriptions on the same job sites for years and years, it could be time for a change. Instead, share open roles through user-friendly social media platforms like LinkedIn, post open positions on HBCU (Historically Black College and Universities) sites, post job ads on niche job boards, or consider hiring a third-party, head-hunting company. You can also use online recruitment software to streamline your entire recruiting and hiring process.

Remember: If you only use your own network to recruit, you’ll be recycling the same candidates over and over. Don’t be afraid to broaden your search, as the results may pleasantly surprise you.

6. Create an employee referral program

Looking for a great candidate referral? The best source could be your existing employees. Much like a referral program boosts word of mouth among your existing clients and potential customers, an employee referral program could boost your hiring pool.

An employee referral program provides a triple-win for candidates, employees, and employers alike. Employees get a cash bonus for referring people in their network to their place of work. Candidates get an introduction to the hiring manager and have peace of mind knowing the company has a positive workplace culture. Lastly, employers can expand their candidate pool, getting reputable referrals from employees.

8 retention strategies to create a positive employee experience

You just hired a bright, talented new candidate—now what? Once the interview process is over, continue showing your new hires that you’re dedicated to their success by implementing these eight employee retention strategies.

1. Fine tune your onboarding process

If you’ve ever started a new job, you know the paralyzing fear of “I don’t know what I’m doing!” that can plague someone during their first few weeks on the job.

Ease the new job jitters while improving job satisfaction by taking a hard look at your onboarding process. Rather than giving each new employee endless video tutorials to watch, pair them with a mentor for their first few weeks (if not months) on the job. Allow the new hire to tour each department, seeing how each team works together toward one common goal. Be sure to check in with new hires and answer questions as they get their bearings.

2. Consider introducing a hybrid role

During the COVID-19 pandemic, many employers switched to remote work environments. Once the pandemic subsided, employers ordered their teams back in the office—much to the frustration of many employees.

Working from home can foster a positive work-life balance as employees no longer have to commute or dedicate a portion of their budget to parking or public transport. If your employees are looking for a more balanced schedule (and it’s amenable to your type of business), consider offering a hybrid work policy. Allow employees to work from home several days a week or offer flexible work hours so team members can find a schedule that works best for them.

3. Ask your employees which incentives are most enticing

Some business owners can run ragged trying to think up innovative incentive programs. They’ll try to combat high turnover with any number of perks—from pool tables, free lunches, and Pizza Fridays to even nap lounges.

While all of the above can create a fun environment, sometimes the best incentives are also the most obvious. Consider offering an intriguing bonus structure, increasing your vacation policy, offering commuting reimbursement, covering health care costs, or offering new parental leave. If you don’t know which perks would be most lucrative to your employees, ask them. Create an anonymous employee survey asking which additions they would most like to see in their employee benefits package.

4. Make mental health a central focus

A person’s job is where they spend the majority of their waking hours—and most job seekers are looking for new opportunities that support a healthy work-life balance. As such, employers might lose some of their best employees if they aren’t invested in team members’ mental health.

To show employees you value their well-being, consider implementing a daily wellness break that encourages team members to go outside and take a short walk. Or swap a company happy hour with a yoga flow or group meditation. Implement a flexible schedule so employees can drop children at daycare, keep up their fitness regimen, and cut down on commuting time.

Lastly, prevent burnout by encouraging employees to actually use their vacation days. When a team member is absent, give them space to rest and recuperate (translation: no phone calls or work emails).

5. Create an employee recognition program

One of the most common reasons employees quit is because they feel as though they’re not valued by their company. In stark contrast, creating a recognition program can help ensure quality employees stick around.

Employees want to be recognized and awarded for their hard work so consider launching an employee recognition program. These programs come in all types—you might host an all-hands meeting where you offer a company award, promote a peer-nominated recognition program, or offer prizes for top-performing employees.

Employee recognition programs can also be monetary without putting a drain on the company budget. An Amazon gift card, an extra day added to a vacation policy, or a gym reimbursement are enticing perks for employees. Plus, don’t forget—boosting employee satisfaction can help benefit your bottom line, thereby funding your recognition program.

6. Create a mentorship program

Consider implementing a mentorship program to enhance the employee experience and nurture your retention efforts. For your talent community, consider pairing new hires with junior employees who can guide them through their first year on the job. Having a mentor for an extended period could be key in boosting employee engagement and your employee retention rate.

7. Fund continuing education for employees

Professional development is a top priority for candidates and employees alike—and it could boost retention efforts. For instance, you could offer reimbursement for continuing education classes for your staff. Or perhaps you could send team members to industry conferences where they might learn a new skill set. If it’s feasible, you could host a lunch and learn series, where you invite executives from other startups or businesses to speak about their areas of expertise.

These educational pursuits benefit both the employee and the company as a whole. Why? The employee advances their knowledge, competencies, and earning capacity, while the company operates more efficiently based on the new skills employees bring to the table.

8. Start a career book club

Both full-time employees and current candidates are looking to increase their industry knowledge. For a fun, innovative way to bring people together while investing in their career path, consider launching a company book club.

A book club could be open to current employees and job candidates alike. An executive could recommend a book that made an impact in their career and assign it to the group. Each week, the group can read a few chapters, and then gather (either in-person or virtually) to discuss what they’ve learned and share their insights.

Improve employee engagement and retain top talent

Small business owners are always looking for top talent. To recruit quality candidates (and ensure they stick around post-hire), it might be time to revamp your recruitment and retention strategies.

Human resources, executives, and other team members can recruit and retain top talent by starting a recruiting marketing campaign, investing in professional development for employees, launching a mentorship program, or starting a wellness program at work.

To learn about other innovative ways to attract top talent, consider these creative ways to get your business noticed.