Finding employees is only half the battle for local small businesses. Retaining them is just as important.

Finding employees has been a major challenge for small businesses in this tight labor market. As I wrote last year, a number of small companies are working to meet this challenge by getting referrals from their existing employees or others in their community. Online job sites, college job boards, social media and trade schools are also popular places to find people.

But finding good people is just half the challenge.

The other — and, in my opinion, more important — challenge is retaining your best workers. It’s not uncommon for my small-business clients to complain of the difficulties of competing against larger companies, and even the government, when it comes to compensation and benefits.

Yet working for a small business has its own unique advantages. And many innovative business owners in the region have figured out how to leverage those advantages to keep their employees happy — and loyal.

One important advantage of working at a small business is the trust and autonomy that an employee can enjoy. Working for a big company often means having to abide by rules, processes and regulations.

But the procedures at smaller companies can be less onerous and can allow employees — even younger employees — the chance to be independent and take on more responsibility.

Tina Dixon Spence makes it a point to empower her employees. She owns Buddha Babe, a Philadelphia-based luxury design studio that focuses on accessories for babies, toddlers and the home.

And she’s busy. Dixon Spence relies on her younger workers to help her manage her business. Her employees sew for production, put on their teacher hats when needed, and directly help customers who walk in or call.

“I hear horror stories from students about interning at larger companies and being given no freedom or opportunity to express themselves,” she said. “I want to give my employees skin in the game and make them feel ownership.” As a result, Dixon Spence has created a small but fiercely loyal team of young designers.

Flexibility is also critical. Adjustable schedules and working from home have become essential benefits in 2022, and smaller businesses can be more accommodating in how they offer these benefits compared with larger companies with more rigid policies.

A four-day workweek has also become a popular benefit to offer, as have expanded paid-time-off plans.

Wendy Smith Born, who co-owns and runs the retail operations at Metropolitan Bakery in Philadelphia, found that a four-day schedule suited her workforce.

“My employees say it’s better for their mental health and their productivity, and I think we have to listen to that,” she told me last February.

» READ MORE: Small businesses should consider a four-day workweek this year in a tight labor market

Of course, to retain workers, even the smallest of businesses need to provide compensation that’s at least in the range of competitiveness.

The best way to make sure of this is to compare the wages you’re offering with national data compiled and made available for free on such platforms as Glassdoor, Payscale and LinkedIn. Basic benefits to retain employees should include both health care and retirement plans.

Allegra Derengowski, who owns Birchtree Catering in Frankford, offers health insurance for her seven full-time employees.

Jill Ervais, who with her husband, Duke Dunne, runs the popular Blokes Barbershop & Gentleman’s Emporium in Old City, said she pays 65% of her employees’ health insurance premiums (which includes dental), a number she said is “unheard of” in her industry.

Some business owners I know are all about growing, even when that growth puts a strain on their workforce and risks burning out employees. The catering business can be very competitive, so turning away work can be hard.

But, in deference to her staff, Derengowski tries her best not to overdo it. She said she used to take on too much work and then have to clamor for people at the last minute and put more stress on her existing employees. Now, she’s learning to better live within her capacity, and her employees are happier because of it.

“We have a very strong sense of what we can and cannot handle,” she said. “We know that we can’t handle more than about 300 people in a day, so that’s our current cap. It relieves a lot of stress.”

Derengowski also started organizing carpools and paying drivers a little extra so that her employees could get to and from events without having to worry about their safety.

All of these tactics help retain employees. But the most important thing any business owner can do is simply to provide a relaxed and fun place to work. Bringing in lunch. Holiday picnics. Half-day Fridays. Open-door policies. And providing an environment where employees can feel comfortable just being themselves.

Some caterers, for example, require their employees to be rigid and restrained while on the job. But Derengowski likes it when her employees join in the fun at events — even dancing with guests — and feel comfortable just being themselves.

“I realize that people are just doing a job and that we all need to work and be productive members of society,” she said. “But if I can create an environment where my employees are able to come to work and have a good time, then I know they’ll be happy coming back. I trust them and I’m never concerned that they’re going to do something too wild and crazy.”

Ervais describes her husband, who runs the barber shop floor, as a definite “people pleaser,” a key personality trait that helps keep his staff happy during those long days on their feet.

It’s also not uncommon, she said, for him to “pour a whisky or two” for their staff once the day is over.

“But never, never, never,” Ervais stressed, “while they’re cutting someone’s hair!”

Gene Marks is a certified public accountant and the owner of the Marks Group, a technology and financial management consulting firm in Bala Cynwyd.