Four ways that SME's can retain top talent
8 min read | Chris Kent | Article | People and culture Retention
SMEs may not be able to compete with larger corporates on salary alone, but small businesses have their own unique advantages. Our SME expert Chris Kent suggests how SMEs can retain top talent without breaking the budget.
How can SMEs retain staff: Key insights
- SMEs rarely have the budget to compete with larger corporates on salary and benefits. This can make SME staff retention hard in purely financial terms. However, SMEs also have unique qualities that can be used to retain committed employees.
- Communication is key. Take advantage of the smaller, more informal nature of SME offices. Hire or promote people managers who will help motivate and engage their team to stay.
- Our “What Workers Want 2022” report finds that development and progression is a crucial issue for workers. SMEs can find agile, budget-friendly ways to upskill staff, fill skill gaps and promote lifelong learning.
- SME leaders should promote a healthy work/life balance by setting an example. Avoid presenteeism and leave on time when possible. Also, SMEs are often well-placed to be flexible with working hours.
- Poor cultural fit is a major reason that people leave companies. Embed your culture into your recruitment strategy and engage candidates who will add to morale and want to stay
Learn more about our professional services to find out how we can help you with your recruitment and retention of staff.
Retaining top SME talent: Background
Staff retention can be a real challenge for some SME leaders. This is especially true when competing to keep your staff in the face of competition from larger corporates, with huge recruitment budgets.
Of course, many jobseekers will be lured by the prospect of working for a large corporate, but this environment doesn’t suit everyone. In fact, as we regularly discover in our annual “What Workers Want” report, it is career progression and development opportunities that are more likely to attract and retain employees. SME employers are in a much better position to offer this type of benefit. So, the question is how can SME leaders best leverage these factors in retaining top talent?
Here are four suggestions that will make a difference, but won’t blow your budget.
SMEs can take advantage of their unique strengths
Create a more communicative culture
By virtue of their size, it can be easier for SMEs to avoid the antagonistic “us vs. them” culture, sometimes found in larger corporates. As all employees regularly work in the same office space together, senior and junior staff are often on a first-name basis. This more easily gives rise to a collaborative atmosphere..
It’s important to remember that workers tend to leave managers, not organisations. SMEs benefit from great people managers, those who motivate and care about their team, who communicate frequently and informally as opposed to solely via annual review. People managers should praise their staff but also be unafraid to offer constructive guidance when necessary. Strong, approachable and communicative managers retain their staff,, and this is a priceless attribute in an SME.
Help your employees to upskill and develop
Staff development is a key retention tool, with the added benefit of filling skills gaps – an issue that plagues SMEs. Look at the areas of skill shortage within your business and cross reference these with the goals of your employees.
From this starting point, you should be able to plan a budget-friendly strategy for upskilling your staff. For instance, look at the projects you have coming up. Can a particular employee work on one to expand their skills? Perhaps they could get involved in a bid, presentation or systems upgrade to broaden their experience. Could they research the potential benefit of a new technology to increase productivity, or help interview and onboard new staff?
You may not have the training budget of a large corporate, but you can utilise your people to upskill and mentor others. Take advantage of the narrower gap between employees and senior leaders within an SME. Mentoring from senior employees or an opportunity to shadow a high-performer are cost-free ways to help junior employees develop. Done right, this kind of engagement can foster a culture of lifelong learning which your employees want to stay to be part of.
Promote and encourage a good work-life balance
Work-life balance is a major priority for many employees, increasingly so post-pandemic. However, this doesn’t mean you need to spend a fortune giving staff free gym memberships or installing nap pods in the office. Work-life balance can also be managed through remote working or flexible hours.
Work-life balance arises from the culture of the organisation. Do your senior management team work all weekend, or email their team employees late at night? This behaviour can trickle down, creating a culture of presenteeism, whereby employees feel they should be seen to be virtually or physically present, even during downtime. According to Issue 14 of the Hays Journal, this appears to be a growing trend across a number of industries. Avoid this downward spiral by encouraging employees to leave on time, take breaks, and refrain from contact about work outside of office hours.
Hire for cultural fit
Cultural fit is a particularly important part of SME company culture. Employees who don’t fit in with the values and ethos of a business can have a hugely negative impact on team morale. Alternatively, some studies have found that cultural fit is one of the main reasons people leave a job. Matching your recruitment strategy to your culture – hiring for cultural fit and personality, as well as skills – is another cost-effective way to optimise staff retention.
Retaining talent as an SME: Next steps.
As you can see, there are various advantages that you, as an SME leader, can exploit to retain staff. Challenging and exciting work, career development and a strong office culture are all appealing to a certain kind of professional. These strategies certainly won’t break your budget, but they will give you a staff retention angle that money can’t buy.
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About this author
About Chris Kent
Chris joined Hays in 2002 and has held a variety of consulting and management roles across Victoria, South Australia and Western Australia. In 2013, Chris was appointed State Director for Western Australia and the Australian Director of Hays Resources & Mining. In addition, Chris is passionate about working with and supporting small business and is currently leading a team nationally that focuses on the SME market.
Chris also serves as a Non-Executive Director on a number of Boards in the areas of education, disability awareness and community leadership in Western Australia.