What really keeps employees staying at small businesses

Taking care of body and mind has become a top priority for many workers, and they now expect their employers to support it. 

New research from GreenShield suggests one in three Canadians would consider leaving their employer for better mental health benefits. That shift is reshaping the way employers think about retention.  

For many small and medium-sized businesses, employee retention is no longer about pay alone but about benefits and workplace supports that shape employees’ experience. 

Those pressures were the focus of a recent Ottawa Business Journal broadcast on employee retention. The discussion featured Michael Curran, editor-in-chief of OBJ, Jeff Walker, CEO and President of CAA North & East Ontario, and Andrew Blanchard, CEO of Sterling Benefits.    

The true cost of turnover  

In many small workplaces, losing even one employee can have an outsized impact. 

Turnover often creates challenges that go far beyond simply filling a vacant role and tends to hit smaller organizations harder than expected, Walker explained. 

When experienced employees leave, their knowledge goes with them, forcing new hires to relearn systems and slowing teams down, something Walker says can directly affect customer satisfaction. 

“If you’re like CAA, you depend on customer satisfaction. It’s the lifeblood of the whole thing,” he said.  

Turnover can also strain the people who stay. Until a replacement is hired and trained, they often have to take on extra work alongside their regular duties. Over time, Walker said, that pressure can pull leaders into daily operational work. 

“They’re just trying to keep the lights on,” he said, leaving little time to think six months or a year ahead.  

Culture and connection matter more than pay alone 

At first glance, it’s easy to assume that pay is the main reason employees leave, but Walker pointed out that the reality is often more complicated.  

“Most exits aren’t about giant pay gaps,” he said. Employees are often more likely to leave, he added, when they feel disconnected from their colleagues and the organization.   

Workplaces that communicate care, through everyday behaviour and formal support, are more likely to retain staff.  

That can include clear communication, flexibility when life gets busy, opportunities to be heard, and recognition, which doesn’t always need to involve financial rewards, Walker explained.  

“Sometimes it’s just having somebody shout you out in front of the whole company,” he said. “That’s how you make people feel connected to the organization.”  

Making work sustainable and engaging

While culture and connection shape how employees feel at work, long-term retention also depends on whether that experience is sustainable.  

Burnout is a growing concern for many workplaces, especially in smaller organizations where teams are already stretched. Beyond avoiding burnout, retention is about creating a workplace where people can do their best work and see a path forward.  

“I think people are feeling a lot of stress, strain, and mental health issues; they’re feeling just kind of stuck a little bit,” Curran said. 

Reducing turnover, Walker said, means making work feel manageable and sustainable over time. “Sometimes it’s great just to be able to take the reins off a little bit,” he said, whether that means creating space for conversation, brainstorming or informal check‑ins that allow teams to reconnect.  

Opportunities to learn and grow also play an important role, particularly in small businesses where traditional promotion paths may be limited. Younger workers, in particular, are seeking a sense of progression, even without a new title.  

Providing access to education, training, or new projects can help employees build skills and move forward, Walker said. He also urged organizations to look for ways to ease the constant pressure to “do more with less.” 

Creating space for conversations, informal coffee chats or team planning sessions can help employees feel less isolated and more connected to their work. In turn, that support can help engagement and retention.  

Benefits as a sign of care

As competition for talent grows, benefits are becoming a key factor in whether employees stay or leave. Walker pointed out that there was a time when small businesses struggled to access strong benefits packages, but that is starting to change.  

Candidates increasingly want clear, practical answers when considering a role, Walker noted. “Every hiring conversation I’ve had of late, candidates ask, what does the benefits package look like, how personalizable is it, and how easy is it to actually use,” he said.  

Blanchard added that many employers still underestimate what is possible for smaller organizations and assume strong benefits are only achievable for large companies.  

In practice, benefits can be scaled and customized to fit both workforce needs and budget. For businesses just getting started, flexibility matters as much as the range of coverage. 

“A health spending account is a great first step,” he said, calling it a practical way to offer personalized support at a controlled cost.  

“Sometimes it’s about big things, but often it’s about a series of small things — the everyday stuff that makes life a little bit easier,” Curran said. “When employees can connect those things back to their employer, it creates a real sense of appreciation.” 

Support your employees with CAA Business 

For small businesses, employee retention is not solved by a single program or benefit. It is shaped by the everyday experience employees have at work, including whether they feel supported, recognized and able to manage the demands of their role.

Building that kind of workplace takes time, but practical supports can help. Businesses that review their culture, communication, flexibility and employee benefits are often better positioned to create a workplace where people want to stay.

CAA Business works with small businesses to help them think through practical ways to support their teams.