Small and medium enterprises (SMEs) are recorded to make up 97% of organisations in the UK (excluding micro-businesses), and therefore it would seem fitting that they are shouldering most of the skills shortage challenge that we are seeing in the UK.
According to a recent survey by The Open University¸ small businesses are feeling the strain when it comes to talent attraction with three in five (62%) feeling that losing highly skilled candidates to larger competitors, significantly affects their organisation’s growth potential.
Whilst the feeling of many business leaders seems to be that the larger organisations monopolise the best talent in the market. It is key to remember that different skill-sets and behaviours are required in the fast-paced start up environment than an established FTSE organisation.
With SMEs apparently paying £5.5 billion of the total £6.3 billion in recruitment fees, inflated salaries, temporary staff and workers hired at a lower level than intended. I look at what an SME can do to remain competitive in the war for talent.
Go to market strategy
Just as your products or services have a brand, so does your company as an employer. Define your employer brand and create stories to help prospective candidates visualise what it’s like to work at your organisation.
Having a good Employee Value Proposition will lead to better employee retention and productivity.
An ‘Employee Value Proposition (EVP)’ is the unique set of benefits which an employee receives in return for the skills, capabilities and experience they bring to a company. An EVP is about defining the essence of your company - how it is unique and what it stands for. It encompasses the central reasons that people are proud and motivated to work there, such as the inspiring vision or distinctive culture. When integrated into all aspects of a business, a strong EVP will help to retain top performers and attract the best external talent.
Build a culture
Defining a culture helps organisations better define how their people contribute to the success of the organisation, the experience they want their people to have and to clearly set the expectations they have from their employees.
How do you build a good culture?
A good culture ensures employees are ‘more engaged’ because creating a ‘great place to work’ increases overall employee satisfaction and productivity. This isn’t something that can be done overnight but building a culture that makes your business a great place to work can make attracting top talent much easier.
As an SME it is much easier to build a culture as you can get buy in from employees at every level of the business. Arguably, that is what makes a great culture- an environment based on values at employees buy in to. Whereas it can be harder for large corporate to compete with SME’s when it comes to this as they are missing the intimacy that a small business can bring so use this to your advantage.
Whilst many SME’s tend to source candidates through advertising or word-of-mouth, employee referral schemes are the holy grail of recruiting. They often deliver quality candidates, in the shortest amount of time, and at the lowest cost-per-hire. The reason is simple: top-performers attract individuals like themselves, and your employees should be your best advocates in the market.
As an employer you need to give your employees a reason to be proud to work for your company. They need a reason to choose to promote the business freely and without being pressured to. If employees feel valued, they will naturally become brand advocates for your business. Employees are the best advocates any business can have and are extremely valuable for promoting what is like to work for your business and why they enjoy working for you.
Salary is Not the Only Crucial Factor
For many business leaders, competing for talent often leads to businesses offering competitive salaries. However, whilst offering competitive wages is effective for attracting top talent initial, it is also crucial to remember these employees will only last if they buy into the entire package your business has to offer. Additionally, it is important to take into consideration that your company may not have the budget to constantly make offers that meet the highest end of candidate’s salary requirements.
It is not a suitable long-term strategy by enticing candidates who appear to be primarily financially driven, I would have to question once they are on board, how easily they would be enticed by other organisations offering them stronger compensation packages?
Equally, for many employees a job is about more than just a salary. Especially as the working world is changing, Millennial's and Generation Z value a greater work life balance, a good workplace culture and flexible working.
According to recent research into the workplace, more Millennial professionals would be willing to take a pay cut for a better quality of work life balance. Offering opportunities for employees to obtain a work/life balance, and therefore proving to be an effective way to retain and attract top candidates.
As an employer this provides you with the opportunity to implement hiring strategy that do not even need to come at a financial cost to the business. For example, some employers may encourage work-life balance by offering flexibility, varied hours during the summer or paid time off to volunteer which is also great for Corporate Social Responsibility (and building that culture!).
Provide Opportunities for Employees to Progress
Opportunity for growth is a top priority for many millennial's and Generation Z.
In smaller businesses there are typically less employees and therefore each individual has more to do but this is a positive as it can offer employees more scope for skill development. Talk about ambitions (both candidate and business) during interview processes and throughout your employer branding.
Ensuring that there are challenging assignments available within the organisation to promote career growth and new skills is also a great way to grow your employee base organically. You are more likely to retain key talent and in many situations by creating further opportunities within the business you should be in a position to backfill roles at a more junior level (instead of constantly needing to go to market at the top end) which should in turn reduce recruitment costs. Often these roles could be ones you can source directly aswell.
Utilise Internal Skill-Sets
In a small, fast paced, disruptive business, you are likely to attract many 'intrapreneurs' (executives and team members who have learned to apply the essential principles of entrepreneurship to the roles they fill within a company). You will therefore have significant knowledge and subject matter experts internally so utilise this experience to create mentoring or training programs.
Again, you are utilising skills that you are already paying for, so these initiatives do not cost anything. For example, hosting ‘lunch and learn’ sessions are a great team building initiative. Remember- the host does even need be a senior leader within the organisation, which gives opportunities for all employees to get involved.
Your employees are your biggest asset and including them in initiatives like this allows them to build on their existing talents, whilst developing valuable leadership skills.
With unemployment in the UK at a low of 4%, it is becoming increasingly difficult to attract candidates. Especially when the most skilled candidates are in high demand from countless businesses who all require the same type of employee. However, if you embrace these ideas and effectively articulate to your value proposition and EVP to candidates, you are likely to recruit more rock stars.
Give your employees something that is more important than money. Give them what they cannot always get from the bigger organisations.
Above all, if you have a good value proposition and EVP you will be more than set up to attract the right leaders to your business. Be confident in your business and drive your own ‘game’.
If you are an SME looking for support with your hiring strategy, please get in touch with a member of the EO Executives team below, who are experts in partnering with businesses to source top talent of SME’s.