How can SMEs retain their staff without breaking their budget?

Staff retention can feel like a real challenge to some SME leaders. This is especially true if, like in most cases, they are competing for top talent with larger, more established corporates; corporates whose brand names look great on a CV or who are potentially able to offer a tempting salary and benefits package.

Of course, many jobseekers will be lured by the perks of working for a large corporate, but this environment doesn’t suit everyone. In fact, as we discovered from our regional “What Worker’s Want” reports, whilst benefits and brand names are important it is career progression and development opportunities that are more likely to attract and retain people - things an SME employer is in a great position to offer. So, how can you leverage this, and other factors to keep hold of your top talent?

Create a more communicative culture

By virtue of their size, SMEs often find it easier to avoid a closed off “us vs. them” culture, which is sometimes found in larger corporates. This is often because all employees, regardless of seniority, work in the same office together. Senior and junior staff are on a first-name basis and there is usually a mutual team, collaborative focus.

So, use the size of your SME to its full potential by ensuring frequent communication and exposure is maintained. If necessary, run more regular company social activities, updates, and group meetings.

Remember, people tend to leave managers, not organisations. Make sure you have the best people managers within your SME, those who communicate frequently with their employees as opposed to solely in an annual review, who motivate their team and who care about their progression. Rather than looking out for number one, people managers should praise their staff but also offer up constructive guidance when needed. After all, strong but personable and communicative managers retain their teams, and this is an attribute money cannot buy.

Help your employees to upskill and develop

Developing your staff is a key retention tool that also helps to overcome skills gaps, an issue which 49 percent of SMEs are facing. Look at the areas in which skill shortages exist within your business, and cross reference these with the goals of your employees and the demands of the wider market.

From here, you should be able to plan a strategy for upskilling your staff, something which doesn’t need to be costly. For instance, look at the projects you have coming up. Can a particular employee work on one to expand their skills? Perhaps they could get involved in a bid, systems upgrade or presentation to broaden their experience? Or could they research the potential benefit of a new technology or on-board new staff?

In addition, as I mentioned, there is a smaller gulf between employees and senior leaders within an SME. Would mentoring from senior employees, providing the opportunity to shadow a high performer or attending client meetings help more junior employees grow? 

Overall, whilst you may not have the training budget of a large corporate, you can utilise the people resources you have within your business to upskill and mentor others, fostering a culture of lifelong learning which your employees want to stay a part of.

Promote and encourage a good work-life balance

Work-life balance is a priority for many employees. However this isn’t to say you need to spend a fortune giving everyone a free gym membership or installing nap pods in the office. Work-life balance can also come in the form of the option to work remotely or flexible hours.

Work-life balance also stems from the culture of the organisation. Do your senior management team work all weekend or email their employees until all hours of the night? If your management team never switch off, this can trickle down to every member of their team, creating a culture of “presenteeism”, whereby employees feel they should be seen to be either virtually or physically present, even during downtime. According to Issue 14 of the Hays Journal, this appears to be a growing trend across a number of industries. Avoid this downward spiral, and encourage all employees to leave on time, take breaks, and refrain from contacting them outside of office hours.

Hire for cultural fit

On the subject of company culture, cultural fit is particularly important within an SME. Employees who don’t fit in with the company culture can have a hugely negative impact on other employees. In addition, some studies have found that cultural fit is one of the main reasons people leave a company. Therefore getting your recruiting strategy on point, hiring for cultural fit and personality, as well as skills, is just another cost efficient way to optimise staff retention.

As you can see, there are various ways in which you, as an SME leader, can provide challenging and exciting work, career development and a strong office culture in order to attract and retain top talent. These strategies certainly won’t break your budget, but they will give you a staff retention advantage that money can’t buy.