We all know the old saying, "Good help is hard to find," but keeping top-notch employees can be even harder. Offers from competitors, the thought of going into business for themselves, and a host of other options are a constant temptation to even the most loyal employees. Larger companies counter with benefits like health insurance, retirement accounts, stock options, and performance bonuses, but these may be too expensive for a small business. Fortunately, I've found three other ways to retain key employees that just about any company can use. There's no magic formula, however: Unless you genuinely care about your employees, none of the following suggestions will have much value.

Acknowledgement and Respect

The work of one of our lead carpenters is so exemplary that customers go out of their way to tell us. One customer called him "an artist of woodwork"; another said he was "the god of carpentry"; We call him George. When we hear a good report about George from a customer, we make sure to tell him. Regardless of how many times I have said, "Hey, George, looks like you’ve gained another fan," he has yet to tire of hearing it. We also tell George and other members of the crew what we think of their work. Some contractors worry that if you praise employees too often, they'll want more money, but we haven't found this to be true. Then again, we pay on the high side, and we let them know that, too.

Constructive criticism

. We also refrain from screaming and yelling. If someone's work needs to be done over or changed, I figure I don't need to blast them out. Having to do the work over is punishment enough. When critiquing the crew's work, I try to start and finish on a positive note. Even when there is a glaring mistake, I first point out something that they did well, then I give them the bad news. After discussing the problem and how to correct it, I come back to what they did well. Ending on a positive note keeps morale up, which makes for a more productive job. Taking an employee's advice is one of the best — and most difficult — ways to show respect. When I figure a job, for example, I typically believe that I have determined the most efficient way of doing the work. Sometimes an employee will suggest a different way and, although it's tough for me to admit, it is a better way. (Sometimes it's not — that's the part I like.) If you're not taking employee ideas seriously, you may be missing out on something that could benefit your business. Whether or not you go with the suggestion, however, is not as important to the employee as the fact that you truly considered it.


Every job requires material and labor, and both contribute to the quality and reputation we are seeking. Since we pay a premium for materials to get the best quality, why should we expect to pay any less for the labor? Of course, just paying more does not guarantee you will get better quality, but paying less almost always guarantees you will get lower quality. We pay on the high side of competitive wages. We also pay a Christmas bonus based on a percentage of weekly pay. But we compensate employees in other ways, too. In addition to paid vacations (one week after the first year, two weeks after the second year), we occasionally tell employees that as soon as we finish a particular task, they can take the rest of the day off with pay. It may be that we've been pushing hard to meet a deadline, or we've been doing a particularly unpleasant job, such as crawlspace work. Employees usually appreciate the gesture, even if it turns out they knock off just an hour early. Another way we compensate employees is to split the difference between my estimate and what the job actually cost. For example, if I figured a job to take 10 hours and it takes only 6, we might split the savings with whoever worked that job.

Social compensation.

We schedule three employee events throughout the year: a "pig-pickin" (an outdoor barbecue of roast pork, for readers north of the Mason-Dixon line), a weekend fishing trip, and Christmas dinner. We invite our employees and their entire families to the cookout. One of our guys usually volunteers to cook and share his special barbecue sauce. (You probably guessed that the "god of carpentry" is also a master at preparing barbecued pig.) Our annual fishing trip consists of a weekend in the Outer Banks of North Carolina. The cost is reasonable because we go in October, which is the off season. So far, no one's spouse has complained about not going with us, probably because we stay in fishing cabins, not the Hilton. Everybody comes back from this trip physically tired, but mentally refreshed. Christmas dinner is for employees and their spouses. We usually hold it at one of the nicer local restaurants. It's another break in the schedule and no one has to do anything but come and enjoy. All three of these events cost about the same, and we consider them well worth the money in boosting morale. And it gives us a chance to get to know each other outside our work routine.

Personal Time

Allowing employees time off for personal tasks is sometimes the most important thing you can do. It lets them know you understand that working is part of their life, not their whole life (a news flash for some of us). Granting personal time off for a doctor or dentist appointment costs us almost nothing, but it means a lot to our crew. We stay flexible and so far, none of our employees has abused this benefit.


. We actually encourage moonlighting, as long as it is not done to the point of exhaustion and doesn't affect job performance. We even allow employees to borrow company tools for a weekend job, provided they ask first. We haven't yet run into trouble with this arrangement; in fact, it's been beneficial. Our clients appreciate being able to hire one of the crew for a job that’s too small for us to do as efficiently as one of the guys working on his own. Of course, I might feel differently if we were not as busy as we are, or if an employee left our company and took some customers with him. Good help is hard to find. But even if you don't have the "god of carpentry" working for you, you can still treat employees with the respect they deserve. You'll find it will help them to take pride in a job well done. Isn’t that what we are all looking for? Howard Ferree is co-owner of Halco Construction Inc., licensed general contractors specializing in remodeling, additions, and repairs in Greenville, N.C.