"Do you have a few minutes to talk?"

It was one of our employees, who had an expression on his face that told the whole story. I invited him to sit down and thought to myself, "I hope he gives us at least a few weeks' notice."

I was right - he quit that day and joined a not-so-exclusive group of employees who have left (or have been released from) our company during the past several months.

While the timing of our unusually high turnover has been coincidental, it has nonetheless caused me to spend quite a bit of time thinking about employee satisfaction and retention.

First, let me share with you a few facts that you might find interesting. Professionals have estimated that the cost of employee turnover ranges from $10,000 to $40,000 per employee who serves in an average role within a company. In small companies, where employees tend to play larger roles (and are not always cross-trained), the costs may be substantially higher.

The Harvard Business Review reports that a 5 percent increase in retention can lead to a productivity gain of 25 percent to 65 percent. The lesson is clear: we cannot afford to lose employees. In general, the real costs and the opportunity costs are just too high.

It seems logical that employee satisfaction leads to employee retention. But how do you create satisfaction? Some of the answers may actually surprise you.

According to most studies, salary is necessary but not sufficient for satisfaction. In other words, the financial compensation of an employee can cause dissatisfaction but generally is not a cause for satisfaction. So you can usually forget about buying employee satisfaction. Of course, that leaves other less-expensive ways to increase satisfaction, which is great news for smaller companies that typically don't have huge monetary resources anyway.

Studies have shown that a work environment that helps raise a person's self-esteem will actually result in more satisfied workers. The concept is simple: people who feel good at work will work harder, be more efficient and will ultimately be more satisfied.

Raising employee self- esteem is possible, but it does require a conscious effort. Typically, you need to ensure that your employees feel that they are actively involved in achieving results, that their efforts are recognized and appreciated and that they are an important member of the company team.

Among other things, this will require you to treat your employees with respect, praise and reward accomplishments (and attempts) liberally and communicate openly the employee's responsibilities and your expectations. I believe it is also critical that you make your work environment friendly and fun.

Once you begin thinking this way, ideas to drive this type of satisfaction come easily. For example, I know of one CEO who responded to an employee's "crunch time" and temporary long hours by sending a cleaning person to her house. This action clearly communicated to the employee, "I recognize that you are working hard for the company. I appreciate what you are doing, and I care for you and want you to be happy." Even a hand-written note can go a long way in communicating your appreciation for the efforts of an employee.

All in all, making your work environment a positive place for your employees to spend their day is not only the right thing to do but it is also a good business decision. Just remember, if you can't create satisfied employees, your employees will find a company that can.