An increasingly competitive marketplace has made talent acquisition and retention a crucial component in the success of any business. Organizations are quickly realizing the importance of their own branding as an employer to attract the most talented professionals, and are spending a great deal of time, money and effort on it. However, in spite of this, most organizations fail to achieve the desired results from their human resource development and management programs. Some market research surveys would have us believe that nearly two-third of the employers believe their branding is a critical element in the company’s HR strategy. While others suggest that the same percentage of employees believe that top management has failed to go beyond the pay and benefits package pitch in shaping that employer brand to attract and retain top talent.
In such an environment where it’s difficult to tell which side is right, how are SMEs that are already devoid of some of the benefits available to larger organizations, supposed to attract the right talent towards themselves? Let’s take a closer look.
What do employees want
Before we start to decode what the SMEs can do, let’s take a quick look at what employees expect from the brand they choose to call their own. According to a study by Lancaster University, UK, the two most important factors that influence employer brand perception for candidates are pride and purpose.
Pride in what they do and where they work is important for the best and the brightest of the employees. The finest professionals would feel stuck in an organization offering mediocre products and services with a management that tolerates such mediocrity. If they don’t feel connected to the organization, the brand, and the work, they won’t stay.
The best employees prefer to derive meaning and purpose from their work rather than just a paycheck. For them, it’s not just a job, but a way towards living a positive life that comes from autonomy in decision making, acquiring new skills and improving old ones, and a direct correlation between their efforts and rewards.
SMEs have a distinct advantage to address this need. They offer a smaller, tight-knit team where the leadership and employees can have a closer relationship. SMEs also have the sense of purpose - to provide products and services to communities that are left untouched by big business. In doing so, they also provide employment opportunities that are often geared to serve the local communities. Within this environment, they cover the basic requirements of pride and purpose that the best talent is looking for. So the next obvious question is…
Where do most SMEs fail?
In spite of their obvious advantage, most SMEs fail to deliver on these two very simple points because of one or more of the reasons listed below:
Ignoring critical ‘human skills’
When leaders lack the ‘soft skills’ to cater to the human side of interpersonal relations at the workplace. They fail to utilize that lack of hierarchical structure to bond with the employees and engage them at work, and then transfer that sense of pride and purpose in them.
When leaders don’t have the requisite soft skills, they often ignore the very need of such skills and relegate them for later.
When leadership believes everything is going perfectly well without asking anyone.
When then institute a gimmicky reward program while their everyday demeanor with employees speaks another language.
SMEs as talent magnets
Now that we know where things go wrong in most SMEs, let’s take a look at how they can (and some already are) filling these gaps to attract and retain the best talents.
The fact that you are a small business should be highlighted prominently to showcase that the employee-employer relationship is much closer than in a large organization. Talented young professionals prefer to look for a less hierarchical work environment where they get direct access to leadership and share their views openly.
Give them purpose
Young professionals are attracted to startups where they see a transparency in the work culture, a place where their efforts are appreciated by more than just a paycheck increment. SMEs can follow the same model and offer them equity or health insurance, especially to senior executives recruited from large organizations. Millennials value growth potential and an opportunity to make a significant contribution. Showcase that, and empower them with opportunities to learn new skills and a quicker career growth trajectory. Treat them as your family and let them be a part of your entrepreneurial journey of creating something new from the ground-up.
Be more flexible
SMEs may be competing with big business at times, but they do have the opportunity to challenge the status quo. For example, flexibility in dress code, work hours, telecommute options for a fixed number of days every month etc. can be highly motivating factors for some employees, especially women who may have to manage personal and professional commitments.
Offer better compensation
SMEs never have deep enough pockets to match salary packages offered by large organizations. In fact, a study by Singapore Institute of Management indicates that 62% small and medium enterprises in Asia find it difficult to hire good talent due to disagreement on salary packages. Although there are many factors contributing to lack of budgets, but provisions can be made to ensure that experienced professionals get a better compensation package than the industry average to attract and retain them. That alone could set an SME apart from the competition in the war for talent.
Motivate your employees
SMEs can take another leaf out of the startups’ book to motivate current employees. These employees are your brand ambassadors and if they are satisfied and motivated by their job, they can prove to be the key that unlocks doors to an exceptional talent pool for a small enterprise. Respect them and listen attentively to each team member, not to merely offer a response, but in order to understand and use their ideas. Institute a talent acquisition and retention program that goes the extra mile to establish a real and effective work culture.
In conclusion, the requirements of the next generation of employees is changing. Various studies indicate that an increasing number of employees value ownership of their work, work engagement, and flexibility at the workplace higher than salary packages. Therefore, attracting and retaining the right talent is no longer rocket science, all it needs is strong leadership. SMEs have what employees might be looking for, that is, if they are able to manage themselves effectively to ensure that these demands by talented and experienced employees are met. The change that is actually required, is perhaps in perception that SMEs can achieve this, regardless of their place in the business ecosystem. And when they realize this, they too can become talent magnets and prepare themselves for the future.