The past few years have been challenging for small and medium-sized businesses, with Brexit, supply constraints and the pandemic all taking their toll. While the Covid-19 crisis has subsided and it’s a case of business as usual for many companies, there’s little doubt that events have left their mark. Employees are rethinking their relationship with work and placing a greater emphasis on flexible working, a better work-life balance, and a company that cares for their wellbeing.
With lots of different business needs to juggle, it can be all too easy for employers to let employee engagement slip by the wayside. But with the war for talent fiercer than ever, and 75% of SMEs witnessing a sharp rise in resignations, it’s clear businesses need to focus their efforts on their people.
We spoke to SME employers and employees across the width and breadth of the UK for our SME guide to understand the challenges they face, what’s motivating employees and how businesses can attract and retain talent.
Despite the number of SMEs in the UK soaring over the past two decades, they continue to feel the threat of large corporations. More than half (57%) of SME employees would prefer to work for a large organisation and a third of those looking to leave their role at an SME in the next 12 months would like to move to a large corporation.
But while it may seem like SMEs can’t compete with the big budgets and hefty pay packets of bigger players, money isn’t everything. In fact, employee engagement and loyalty lay much more in company perks, a good work-life balance and the opportunity for career development. And when it comes to size, bigger isn’t always better. In fact, our findings revealed that SMES have many strings to their bow.
A large number of SME employees said they preferred a smaller company over a larger business because of the ‘family feel’ they offer. Many employees also consider SMEs to be able to offer a better work-life balance, with 42% saying this had attracted them to their role, versus 37% of those who would rather work at a larger organisation.
With the UK putting in the longest hours in Europe, the desire for more family time, space to focus on their mental and physical wellbeing, and downtime from the pressures of work is hardly surprising and it’s great to see so many SMEs managing to get the balance right for their employees.
To stay ahead in a competitive market, businesses should continue to put employee wellbeing at their core, encouraging employees to switch off at a certain time, take regular breaks, and make it the norm for people not to email or call each other outside of working hours.
Not surprisingly, flexible working has also risen firmly up employees’ wish list, with the pandemic spurring greater demand for a more agile and flexible approach to work. More than three quarters (76%) of employees said they would be more likely to apply for a role if there was an option to work flexible hours and there’s a huge opportunity here for SMEs to stay ahead in the war for talent.
A business is only as good as its people so leaders should be giving serious thought to the way they work and what would help boost employee engagement and motivation. Our research showed that on a scale of 1-10, only 13% of employees said they felt completely engaged in their work over the past 12 months, while nearly half (48%) considered themselves to be disengaged. For employers, motivation is their biggest challenge, followed by employee engagement.
While pay is clearly an important factor, and employers should make sure they’re paying a fair wage, there are other ways for employers to make their staff feel valued and appreciated and stand out from the crowd. Introducing flexible working and more personalised perks and rewards can go a long way. Three quarters (74%) of employees said they would be more likely to stay in their current job if they were rewarded on a more regular basis, yet only a quarter (24%) of employees strongly agreed they felt valued as a member of their team.
In the war for talent, candidates can afford to be more selective and a strong benefits package can be make or break, but there’s a disconnect between what employers are offering and what employees really want.
Employers tend to think that trendy benefits like ping pong tables are appealing, yet less than one in five employees feel very happy with their current benefits package. To hit the right note and ensure businesses are spending their money on what employees want, they need to start by looking at the needs of their people. Understanding what will truly resonate is the key to creating an effective and impactful benefits package.
With SMEs admitting that employee motivation and employee engagement are their biggest challenges, the focus going forward must be upon creating employee-centric cultures that have employee needs and wellbeing at their heart.
To learn more about the challenges and opportunities SMEs face, read our guide here.