How SMEs can win the war for talent

Andrew Knight, founder of HR consultancy The Spark Company, believes that putting people first leads to better business.

While the ‘war for talent’ has been a battle that SMEs have faced for a long time, in recent years, the challenge has become even more complicated. The ‘Great Resignation’ following the global pandemic has seen a significant shift in what employees want from their careers. This cultural shift means businesses need to adapt their approach to not only attract the very best talent but also retain their existing teams.

For SMEs, trying to compete with larger organisations has never been tougher. However, there has never been a better opportunity for these organisations to use their strengths when looking to recruit and retain talent. So, what can SMEs do to win the ‘war for talent’?

The importance of retaining talent

Before looking at some of the most effective strategies for improving the way you recruit and retain talent, you first need to understand the importance of keeping your workforce. Building long-lasting relationships with engaged and competent employees is essential to helping SMEs take their business forward.

Recruitment can be an incredibly expensive process, which is why one benefit of retaining employees is a reduction in costs. However, high retention rates offer much more than just reducing recruitment expenses. Research from Gallup found that organisations that keep an engaged workforce have less absenteeism, fewer accidents, increased customer loyalty, higher productivity, and greater profitability.

Being able to retain an engaged workforce also plays a vital role in helping to attract new talent. By creating a positive and happy working environment that boosts morale, you can ensure your organisation is attractive to new recruits.

What can SMEs do to improve retention and recruitment?

Now that you know the importance of retaining employees, how can you improve your retention rates and attract the best talent? While SMEs might not have the same budget as larger businesses, they do have speed and greater flexibility which can give them an advantage over their competitors.

If you are looking to maximise the strengths of your business, boost retention rates and attract the best talent, then you should consider the following:

• Develop a strong employer branding: your branding is how your customers, staff and potential recruits perceive you, which makes it a crucial part of your efforts in retaining your workforce and attracting new talent. Studies have shown that following the pandemic, employees are increasingly looking to work for an organisation that shares their values and has a warm and embracing culture, so focusing on highlighting your strengths as part of your brand can transform your operations.

When building your employer branding, it is important to first research what it is that makes you unique and how your team currently feels. Take some time to carry out surveys and competitor analysis to understand your value, and then showcase this information through your marketing and digital presence. A great way to do this is to include videos and case studies on your website, allowing potential employees researching your brand to understand what you offer.

• Remain nimble: in large corporations, adapting to the ever-changing employment market takes a long time and needs approval from multiple directors. This makes it an arduous process as any decision will need to go through several stages of decision making and reviews before it can be made official. However, things are far more rapid and nimble in SMEs, allowing them to react more quickly. This is a major advantage in a fast-paced modern world that sees quality candidates being swept off the market before a second interview.

• Offer opportunities for growth: another great solution to retain and recruit the best talent is to provide opportunities for skills development. Research has shown that offering employees the chance to grow makes them feel valued and boosts loyalty towards your brand. This development could be a job promotion, skill development, apprenticeship, mentoring from senior members of staff, or participating in a course like Help to Grow: Management.

• Incorporate technology: technology is progressing at a rapid rate, helping to transform how businesses operate and improve efficiency. It can also help to streamline your recruitment and onboarding process, reducing the amount of admin that you and your employees need to face. There are many different methods of doing this, for example job boards often allow you to use qualifying questions in online forms to screen and rank potential candidates, before they click ‘apply’. This will ensure only the right candidates will be able to apply, helping you to save significant time.  You can also incorporate tools such as Microsoft Lists, Trello or ClickUp to create templates, onboarding checklists, and digital paperwork, helping to streamline the recruitment process.

• Offer more than a salary: the pandemic has shown that employees are looking for more than just a competitive wage. While a salary is always going to be an important consideration, recent studies found that employees are increasingly looking for a greater work-life balance. Alongside options such as flexible working, consider offering benefits such as gym memberships, mentorship schemes, the ability to buy/sell holiday days and cycle-to-work schemes.

Are employees really motivated by non-monetary benefits?

Offering a competitive salary is critical to attracting the best workers, but employees are not just looking for the highest wage. One study conducted by Citrix found that only 24% of new recruits would opt for a role that offered a higher salary compared to one that provided greater flexibility.

Understanding what your employees want from their role will allow you to tailor your approach and provide them with the best benefits. This will help to build a strong sense of loyalty from your team, boosting your retention rates, and helping you to attract the best talent.

Of course, when looking at non-monetary benefits, it is important to remember that these do not replace a decent salary and good working conditions. Equally, statutory holiday leave and pension contributions are not rewards or incentives.

How can SME leaders gain a competitive advantage from fairness, flexibility and inclusion?

Alongside offering non-monetary rewards to employees, SMEs must also ensure they create a diverse and inclusive workforce. One recent study found that an incredible 62% of new recruits would turn a role down if the company did not support diversity amongst its workforce.

That is why if you want to retain and recruit the best talent, you need to be embracing diversity in all its forms. Alongside considering age, gender, race, and identity, you should also embrace those issues which are most important to potential recruits, such as sustainability, reducing waste and making a positive contribution to the world around you.

One great example of having a diverse workforce is B&Q. After discovering the benefits that came from having older employees, they have adopted a programme that manages, develops and retains older workers. This has led to an increase in profits, lowered turnover and improved customer service.

Final thoughts

Being able to retain and attract new talent is one of the toughest challenges facing SMEs today. However, adapting your approach to the changing marketplace will set your organisation apart and help you to elevate your brand. You only need to look at the GenderPayBot on Twitter to understand how many brands are failing to create a diverse and equal working environment.

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