Every company in existence wants to attract and retain promising talent. Given the extreme recruiting expense involved, as well as the loss of productivity that inevitably accompanies high turnover, we need to make it our business to ensure that, for staff retention, employees are engaged, content and motivated to perform well for both themselves and the company.
In this area, it might seem that larger conglomerates have the advantage. After all, they have more money, they can offer attractive benefits and they can provide competitive salaries, which can be hard for SMEs to match. However, it should also be noted that there are a great many advantages that SMEs have over larger companies. An inventive entrepreneur can play on these advantages and incorporate certain techniques into their performance management system to minimise turnover, increase engagement and boost morale.
1. Emphasise the importance of regular communication and feedback
As SMEs have fewer employees than their larger counterparts, there is generally a reciprocal increase in familiarity between employees. With a more modest workforce, employees can get to know each other better, meaning that employees are innately happier exchanging information, constructive criticism and feedback. This is of utmost importance when it comes to staff retention; a lack of feedback and coaching is often cited as one of the major factors that result in an employee leaving a given position.
The tight-knit atmosphere intrinsic to most SMEs goes a long way to fostering an atmosphere of open communication, but there are things you as a manager can do to encourage interaction. Celebrate employee birthdays, organise social events and plan team dinners. This will result in increased morale and a deeper connection to the organisation, and staff retention follows. Incorporating the use of technology in the form of performance management software can also aid communication, as it allows for real-time feedback between employees and managers. The best providers base their system on popular social media platforms and prioritise communication above all else.
2. Allow for rapid career progression
One serious advantage SMEs have over larger companies is that they have the capacity to offer faster career progression to their eager employees. This will be a highly attractive prospect to any ambitious employee who would have to question whether they want to be a small fish in a big pond, or a big fish in a smaller pond.
Even the most determined employee might find it difficult to climb the ranks at a larger enterprise.
A lack of career progression is not something to be underestimated. It is a common reason for leaving a given position. Given their smaller size, managers within an SME can keep a close eye on staff to see whether they are regularly displaying qualities that would make them suitable for a more advanced position. Managers and staff should also collaborate on personal development plans, so employees know that the company is invested in their future, and employers are able to determine where strengths and weaknesses lie within their workforce.
3. SMEs can open themselves up to flexible working
You might think that rigid work hours result in more work being done, but there is something to be said for implementing flexible working. After all, it has been reported that a third of employees would actually prefer flexible working to a payrise. Not only is flexible working highly desired by employees, it is also now a legal requirement. As of 2014, employees who have been working for a company for longer than 26 weeks have a legal right to request flexible working from their workplace.
Flexible working can come in many forms: Flexitime, telecommuting, shift swapping or even the occasional afternoon off for a family function. This is an area where SMEs can seriously compete with larger companies and, again, it is a massive way to curb turnover. Never underestimate the importance of a healthy work/life balance to your employees. The fact that you show you value it will do wonders for your reputation, meaning that recruitment in the future will be far easier.
4. Hold regular catch-ups and meetings
The past few years have seen a shift away from yearly performance reviews to a style known as continuous performance management, which has been used to minimise turnover. This performance management process involves regular, informative discussions between management and employees, where valuable feedback can be given and employees can express their concern over potential pitfalls or issues.
Regular catch-ups promote healthy communication and interaction, but scheduling and attending them can prove to be more of a challenge for larger companies. Performance management tools can be utilised to facilitate this process but, in many ways, SMEs have the upper hand in this respect. Managers often share office space with their employees in smaller companies, meaning that they are ultimately more approachable and available. Due to this, employees feel more comfortable requesting a catch-up than they would with an intimidating, faceless manager. As a result, the employee feels more engaged, involved and active within the organisation.
5. Don’t forget to reward and recognise behaviour
One area that SMEs can improve to ensure staff retention is that of reward and recognition. According to one source, only 9 per cent of SME employees are asked what type of benefits they would enjoy, and 44 per cent of SME employees believe that their organisation needs to ‘seriously consider’ how they recognise and reward their employees. According to the study, 32 per cent plan to leave their current position in search of one that offers better benefits.
Rewards don’t need to come in the form of bonuses or compensation; in fact, 43 per cent stated that they would feel more motivated by simply being treated well on a daily basis than by a pay rise. SMEs need to get creative and remember that it is often the little things that matter. Pay for a staff lunch, give an employee the day off, or simply give thanks for a job well done. Small things often go a long way when it comes to staff retention and will ensure that your best and brightest stay on board.
Stuart Hearn is CEO of Clear Review.