The “Great Resignation” Survival Guide for Small Businesses

This fall the number of people quitting their jobs reached the highest ever recorded with the “Great Resignation” in full tilt. Certain industries such as leisure, arts, entertainment, hospitality, transportation, utilities, retail and professional services have been particularly hard hit.  

An estimated one-third of Americans that have quit their job are starting new businesses. And while many experts expect this wave of turnover and professional reinvention to seed the next generation of startups, the immediate effects are proving incredibly challenging for existing small businesses to manage.  

As a small business owner myself, I’ll be the first to admit that after 0% turnover in 2020, the mild turnover we’ve experienced in 2021 was somewhat unexpected. 

It’s especially important that small businesses — which traditionally have fewer staff, a smaller client roster, and need to operate more nimbly — have a plan for how they handle staff attrition internally and externally. 

Don’t take it (too) personally

Having worked with hundreds of small business owners, I understand just how invested and enmeshed they are in their business. It can be hard not to take staff resignations personally. 

In reality, however, we’re coming out of a period of immense change on a professional, societal, and personal level. In many cases, major life changes including job changes are a natural reaction to the unprecedented environment we’ve collectively endured for nearly two years. 

And in today’s incredibly competitive job market, more and more employers have ramped up recruitment, offering signing and referral bonuses, higher wages and more perks, making it more likely that your employees will be solicited by other employers.  

Keep in mind, however, that while 1% or even 2% turnover is to be expected in 2021 and 2022, higher levels of attrition may point to larger problems such as burnout, low wages or systemic workplace issues.

Prepare with proactive changes

With this period of reshuffling expected to last for several years, small businesses should anticipate some degree of turnover and prepare accordingly. The adage “an ounce of prevention is worth a pound of cure” holds true. Instead of waiting for the first employee to give notice to react, small business owners can lessen the pressure by making some small preventive or proactive changes now.  

Start by rethinking the way you’ve assembled your client-facing teams. Instead of having one point person per client, flatten your organization structure and assign two people to the task. This way if one person leaves, their departure will be less visible and less impactful on the account. By having two client leads, you can also ensure there is limited loss of institutional and account knowledge.  

The other strategy small businesses can deploy is to rework job descriptions for new hires or promotions. Instead of focusing on specialized skill sets or narrowly defined roles, small businesses should look for candidates that have a broader, more adaptable range of skills. These types of candidates can support multiple areas of the business and can step in to support other teams in the event of unexpected vacancies. 

How to manage it externally

 Regardless of how prepared you are, every small business will inevitably experience resignations – some of which are likely to be client facing. Here are some tactics small business owners can deploy when an employee resigns:

Lean into the client relationship

When a resignation happens, it’s incumbent on CEOs and managers to shepherd the transition. Be the first to share the news with the client and don’t be afraid to be transparent about employees embarking on new roles. Discuss the timeline for filling the position and explain who on your team will own the account in the interim. 

Get them excited about the replacement

One strategy to keep clients engaged and excited about continuing to work with your business is to give them some insight into the hiring process. Ask them what they liked or disliked about the previous person, or what new skill sets or experience they think would be valuable in a new hire. While you don’t want to give your clients the ability to override your hiring choices, you do want them to feel like they were a part of the process. Instead of focusing on the employee that has left, this tactic will get them excited about your new hire. 

Use it as an opportunity to evolve the relationship

Businesses and roles have changed dramatically in the past two years. Use turnover as an opportunity to reassess the customer experience your business provides. Talk to your client and the team that serves them and find out what’s not working anymore. Maybe your client wants more interaction with a bigger team of junior staff. Conversely, your client may be too busy for frequent communications and want fewer interactions with key staff only. 

When staff change happens, it’s the perfect time to have these conversations with your clients and get your employees (new and legacy) on board with the next evolution of the relationship.

How to manage it internally

Maintaining internal morale and avoiding major disruptions in workflow is just as important as managing the client-facing effects of turnover. Here are some tactics small business owners can deploy when an employee resigns:

Accept that you may have to be more hands-on

The best place for leadership is ideally in a strategic role. However, when turnover upsets the normal course of business, CEOs and managers may need to get more plugged into client work. This is only temporary, but often a necessary step to ensure that client service doesn’t suffer as a result of an unexpected resignation. 

Assess how your team is feeling

Just like small business owners can take it personally when an employee leaves, oftentimes other members of the team may feel upset or discouraged by turnover. It’s important to have open conversations with your staff and HR. Anonymous employee sentiment surveys, mental health days or reminding staff of the HR resources available to them are a great way to gauge how your team is feeling about employees departing. 

Frame it as an opportunity for growth

Another way to motivate a team feeling discouraged about turnover is to focus on internal hiring. Promoting someone from within the organization to fill an open position can get your team engaged in the professional growth opportunities internally available. 

Don’t be discouraged

The knee-jerk reaction to attrition for many small businesses is to retreat – to stop growing and leave the position unfilled to save on costs. But to be successful, small business owners need to be resilient and ready to take risks. Lean into your competitive advantage; small businesses are able to adapt more easily, institute changes and react to changes in the industry or job market. 

Be open-minded and look for opportunities to turn turnover into a positive for your business. It may be just the push you’ve been waiting for to level up and upskill your workforce, reorganize your business, or make big investments in technology and automation.