Small and medium-sized companies (SMEs) should play to their strengths when it comes to retention, and focus on building a culture of recognition, according to research.
SMEs face an uphill struggle when competing with larger companies for talent, as employees eye up the superior perks, roles and opportunities for progression at larger companies.
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According to a survey from benefits and rewards company Sodexo Engage, more than half (52%) of SME staff would prefer to work at a larger company. With 32% looking to leave their current role in 2022, SMEs face a struggle to keep talent from going to larger companies.
Jamie Mackenzie, director at Sodexo Engage, said that because large groups of SME employees are already flocking to bigger companies, leaders of smaller businesses need to reevaluate their retention strategy.
He said: “While SMEs may not be in a position to compete financially, they have plenty of strengths to play to.
“Building on company culture, that places recognition at its heart, can improve employee experience and boost retention.”
While pay was a significant factor for employees (with 43% saying lower salary was their main complaint with working for a smaller business) many listed company culture as a real attraction.
Almost all (91%) said they felt more recognised for their work in a smaller company, and 42% said they preferred working in smaller organisations because of the close-knit environment.
Sophie Forrest, of consultancy ForrestHR, told HR magazine that by investing in their strengths, smaller businesses can beat large companies in the race for talent.
She said: “One of the key advantages of a smaller business is the family feel – the fact that you’re not a cog in the machine, the boss knows everyone’s name, their children’s names and where they went on holiday.
“Amplifying this is one way of increasing the sense of staff belonging and instilling loyalty; flexible working, family-friendly policies, supporting positive work-life balance and team building exercises are all strategies you can deploy to strengthen that family feeling.”
The variety of projects and tasks in smaller businesses she added also enables HR leaders to create interesting and varied jobs.
Forrest said: “And because the boss does know everyone, SMEs also have a tremendous advantage in being able to create a culture of recognition, where the whole team knows and applauds when someone is doing well, which this research shows is invaluable in making employees feel like they belong.”
The survey polled over 1,000 staff from companies of fewer than 250 staff, across the UK.