Updated: 26 November 2024
When you’re in a small business, it can be hard to compete for talent with larger organisations that have abundant resources at their disposal.
But size isn’t everything - after all, 97% of all Australian companies have fewer than 20 staff - and the advice we give to small and medium-sized enterprises (SMEs) who might be having difficulty finding and retaining skilled staff is to leverage their 'SME Advantage'.
This means accentuating the unique attributes and opportunities a smaller business can offer, and to determine the perks employees and job hunters genuinely value, so you can tailor an attractive package for each person in your team.
It’s time to think beyond some of the more stock-standard benefits and get creative with your employee value proposition (EVP). Let’s explore this in more detail.
1. Look beyond the pay packet
The good news? It’s not all about the money.
We often talk about pay being a ‘basic hygiene’ factor for businesses, in that you don’t want to get it wrong, but there are many other things that are just as, or more important, to people.
Research by recruitment agency, Randstad found work-life balance was the most important priority for Australian workers, ahead of an attractive salary and benefits. Seek’s Laws Of Attraction data also reinforces this finding.
You want to keep salaries in line with market rates, if you can, and to ensure those rates stay in touch with regular salary reviews. If you are having trouble benchmarking pay rates and benefits that are specific to your industry, reach out to experts for help.
2. Personalise your offerings
Everyone is different, so you need to determine what benefits and support are meaningful to each employee. Put simply, it’s about applying a “tell us what you want and we’ll do our best to make it work” approach to remuneration.
You might not be able to compete with larger companies' pay packets or cash incentives, so get creative with your range of offerings. One person might want a gym membership or equity via a profit-sharing scheme; another might value extra training opportunities or more leave.
It’s also worth investigating things like unconventional new parent policies, that go beyond simply topping up parental leave payments.
Employees’ needs also change over time and the reasons why a person joins an organisation won’t always be why they stay. This is where the agility of smaller businesses means you can keep reevaluating and adjusting benefits to match expectations.
3. Build trust and support your staff
No one likes to lose talented people and the impact is even more acute for SMEs.
Productivity in a big corporation might not be badly affected by the loss of a few employees, but losing 3 people in a business of 15 employees means you are down 20% of your workforce, which is serious, particularly if a single person holds a required qualification or certification, e.g. a bar manager’s certificate.
We can’t stress enough how important it is to support your people and get the basics right from the start.
Establish a solid basis for every employment relationship by ensuring all the legal aspects are locked down and do what you say you will do, from the hiring process onwards. Set performance expectations, get onboarding right, and ensure people can raise any issues. This all builds trust and confidence which flows into higher staff retention.
4. Flexibility is key
Work-life balance is now top of mind for employees, and flexible work arrangements and remote working is now expected by many, at least some of the time.
While there is some tension around the hybrid work model (where people come to the workplace some days and work from home on others), research continues to highlight that many workers will consider quitting if they have to spend more time in the office.
Small businesses have an advantage in being able to work with their team members to find mutually-beneficial solutions. Work-life balance isn’t solely about working from home, either, as things like flexible or shorter hours, or the ability to take unpaid leave or buy more annual leave can give employees more options.
SMEs can pivot more easily than a large organisation when faced with challenges. We’ve seen many employers respond nimbly over the past five years, while some big businesses have responded to pressures by restructuring, often multiple times.
This all speaks to nurturing a small team of talented people who are committed to the business and are adept at changing ways of working to make the most of new opportunities.
5. Build your mission and culture
Small businesses are often run by passionate people and the ability to articulate a clear vision of why you are in business and what you are aiming for provides clarity and purpose for employees who know how they can contribute.
Research proves that people now want to work for an enterprise that does good, especially organisations that are committed to improving workplace equity.
Dynamic team culture is something SMEs often excel at. Colleagues don’t all have to be best mates, but little things add up, like having team lunches, organising small events, or celebrating achievements.
Also, don’t overlook the impact of poor performance or conduct. When you need to take disciplinary action or restructure, ensuring you manage these processes swiftly and ethically will be a positive thing for your overall company culture.
6. Connection, recognition and security
Nothing beats genuine human connection and social interaction, and SMEs have a unique ability to build thriving employee relations for the simple reason that there are fewer people. No one gets lost in a small business.
Regular performance review discussions are a vital way to connect to your employees, so you can accurately track, recognise, and reward high performance (or look for constructive solutions to under-performance). Honest lines of communication between employer and employee mean you can better understand staff needs or convey changing business needs, and can then work together to formulate responses.
Job security can be another edge over the large corporate culture that too often values perpetual restructuring to the detriment of employee engagement, motivation, and company culture.
Providing opportunities for internal career progression also gives people a long-term view of their future in the business.
You’re not alone
In a small business, people are typically performing multiple roles. Owners, too, often have to be “on the tools” as well as dealing with the management and development of the business.
So, sometimes these important people management and hygiene factors, or compliance matters can get parked or overlooked.
It doesn't have to be this way: if you don’t have the time or expertise, reach out to MyHR for help.
