Attracting and retaining talent is a huge priority for any organisation today, and the evolution of certain industries means niche capabilities and roles are being created almost daily; it really is a candidate’s market for the best talent.
This presents various challenges for organisations of any size but can be particularly difficult for SMEs who may be competing against big, established businesses with compelling employer brands which go all out to attract and hang onto the best people.
BPS World commissioned research in March to explore how senior decision makers and members of the C-suite feel about their approach to engagement and retention, their employee turnover rates, interview processes and their strategy for talent pipelining and succession. Many respondents were from SMEs, and we considered their responses against those of their larger counterparts. For example, compared to businesses of 250 people or more, SMEs were less likely to have a succession planning strategy in place. This group also cited ‘competition for the best talent’ as their biggest hiring challenge over the next ten years (23%), whereas the larger companies surveyed were more likely to cite Brexit and the associated migration issues, or skills gaps in their industry as the biggest hindrance to hiring over the next decade. The outlook for SMEs wasn’t wholly negative; as they had a lower employee turnover rate than the larger businesses surveyed, which suggests their approach to retention is paying off.
Nowadays, offering a bumper salary package may seem like the best way to attract skilled employees, and bigger businesses can be more financially able to do so. However, it’s important to note that a high salary alone does not retain talent. We conducted research last year which asked employees for the top reason why they stayed in their longest serving role. Almost half (47%) said it was because they enjoyed the job, compared to just over a quarter (27%) who said they stayed put because they were paid well.
So, what does this mean for an SME looking to build a strong talent pipeline; aiming to attract high skilled employees to stimulate growth or realise its ambitions? Clearly, it’s not as black and white as saying SMEs don’t need to offer a competitive package. The approach needs to be far more holistic than simply looking at what you’re paying someone.
SMEs should think about every step of their attraction, engagement, and retention strategy to identify areas of improvement. For example, are their job ads effectively ‘selling’ the role? Are their recruitment process unnecessarily unwieldy? Do they provide adequate development opportunities? What do the internal comms look like – does every employee feel bought into the organisational vision? Is the organisation supported by a clear culture based on values and behaviours?
There should also be consideration of the reasons why people resign, as these can be the same reasons why people turn down jobs at the point of offer, which 52% of SMEs surveyed said happens to them either often or sometimes. Naturally, many departing staff move on because they need a new challenge, but if others cite things like lack of flexible working opportunities, or feeling like their development was stifled, then these issues need to be tackled or they will put off potential new recruits.
In many ways, SMEs have a very compelling offer for potential candidates and existing employees, and their challenge is communicating and articulating it. For example, many candidates seek out the faster pace and reduced bureaucracy commonly found within a smaller, more agile organisation. They enjoy feeling like ‘more than just a number’. And they like to work in an agile way, which smaller businesses tend to do more naturally in many cases. If you’re an SME that offers all these things, make sure potential candidates know about them! Don’t be distracted by the seemingly infinite budgets global organisations appear to have for slick recruitment campaigns or salary packages. Take an honest, holistic view of your entire strategy when it comes to attracting, hiring and keeping the best people, and keep reviewing it to make sure you’re marketing your employer brand as effectively as possible. If you get all this right, there’s no reason why you should be lagging in the talent race.