It is a competitive job market out there. Companies need to sell themselves as a great place to work to attract the best candidates. Four experts explain how SMEs can offer a more attractive workplace, starting below with Jaimie Buss, Chief Commercial Officer at Deputy.
It’s no secret that we’re facing critical shortages in skilled job candidates across various industries. In this climate, SMEs need to differentiate themselves by fostering workplaces where employees feel genuinely valued and heard. Establishing continuous feedback mechanisms is crucial: regular 1:1 meetings, focus groups and anonymous surveys can give employees a platform to share concerns, suggest ideas and feel like they’re part of the company’s growth. This is particularly vital as return to office mandates dominate workplace conversations and even the news agenda. Mandates that don’t reflect the needs of staff risk creating resentment or, worse, encouraging turnover. In order to mitigate these challenges, SMEs need to ensure flexibility and constant dialogue between employers and employees.
Indeed, flexibility is a key advantage for SMEs. While larger organisations often struggle to adapt quickly, SMEs can leverage their agility to offer bespoke hybrid or remote working arrangements tailored to individual needs. This not only demonstrates trust but also accommodates the evolving priorities of today’s workforce, where work/life balance is a top priority, especially post-pandemic.
Another key differentiator for SMEs is the use of digital tools and AI. Investing in technology that streamlines workflows and reduces repetitive tasks doesn’t just benefit the business – it also enhances the daily experience of employees. For example, AI tools can handle administrative burdens, freeing up staff to focus on meaningful tasks that provide real value to customers. However, it’s vital to provide proper training to ensure employees feel confident using these tools. Without this support, technology can be perceived as a threat rather than an enabler, which can hinder adoption and create unnecessary friction.
Aside from digital tools, building a strong, value-driven culture is also essential for attracting and retaining top talent. Authentic communication, opportunities for progression and development and a commitment to inclusion make SMEs more appealing than organisations where employees can often feel like a mere cog in the wheel. A standout onboarding experience is critical here; it’s the foundation for a successful employer-employee relationship. Effective onboarding fosters a sense of belonging and clarity about roles, while continuous learning opportunities demonstrate a company’s investment in its people. In today’s market, which is seemingly more competitive than ever, SMEs that prioritise culture and development will retain staff, attracting those seeking more meaningful and supportive work environments.
Ultimately, SMEs have a unique opportunity to play to their strengths – like agility, personalisation, and innovation – to attract and retain skilled talent. By actively listening to employees, offering flexibility, embracing technology and building a strong internal culture, they can create workplaces that rival even the largest organisations in appeal.
Kevin Vashi, Managing Director, Netcom Training:
As talent pools shrink, small- and medium-sized enterprises (SMEs) face greater challenges than larger companies. Research shows 62% of organisations suffer from a skills shortage, with SMEs disproportionately affected. Despite employing over 60% of the UK workforce, seven in 10 SME owners struggle to recruit staff with the necessary skills.
This situation represents more than a temporary challenge; it’s a skills crisis affecting the majority of the UK’s working population. To compete, SMEs should leverage their advantages, such as agility and close-knit teams, to position themselves as desirable workplaces.
Employee-built community
Smaller businesses excel at creating a sense of community, enabling faster decision-making and more collaborative work environments. Building a supportive space for employees to collaborate and learn – especially from senior team members – raises job satisfaction. Employees who view the company as a place to grow professionally are more likely to stay.
Performance-based benefits
Offering incentives tied to performance helps align employee development with business goals. While not all SMEs can afford extensive benefit programmes, affordable options like flexible working hours can improve work/life balance and increase employee loyalty. Healthcare perks and leisure rewards, where feasible, can also boost team performance and satisfaction.
Investing in career development
Encouraging staff to pursue courses that advance their careers cultivates trust and loyalty. Employees see the company’s investment in their growth as a mutual commitment to success. Training initiatives not only improve retention but also build the business’s overall skillset. Selecting the right courses that align with company goals and future trends is essential.
Training for future demands
Anticipating in-demand skills is challenging but crucial for SMEs. Staying ahead of trends, such as the rise of Artificial Intelligence (AI), can provide a competitive edge. The Office for National Statistics reports that 16% of businesses are already adopting AI tools. SMEs should encourage staff to undergo AI training, building strong foundations for future innovation.
Addressing the skills gap has long-term implications for the UK’s economic stability. According to WordSkills UK, 60% of businesses expect their reliance on advanced digital skills to grow in the next five years. Proactive SME leaders must act now to bridge this gap.
Closing the skills gap
To attract and retain talent, SMEs must demonstrate their commitment to addressing the skills gap. Reassuring employees that the business is dedicated and invested in their professional development will strengthen loyalty and ensure the company’s future success.
Steven Drost, Co-founder and Chief Strategy Officer, CodeBase:
With skilled job candidates in short supply, SMEs face unique challenges in attracting and retaining top talent, however, they also possess distinct advantages, particularly when it comes to fostering a workplace culture that values innovation, personal growth and meaningful engagement. SMEs can build more personalised connections with their employees, offering tailored growth opportunities and direct engagement with leadership. This ability to create a close-knit, supportive environment is a critical factor in attracting talent that seeks more than just a pay cheque.
Agency is a competitive edge. Smaller organisations lead to more agency, where agility, flexibility and professional autonomy originate and flow. For example, while large corporations sometimes struggle with bureaucratic layers, SMEs can adapt quickly, responding to employee feedback and shifting to market demands. This flexibility unlocks rapid adoption of technology, a key factor in attracting and retaining top talent. By adopting cutting-edge tools and systems, SMEs provide employees with opportunities to develop new skills and stay ahead of the tech curve. This includes leveraging Artificial Intelligence for smarter decision-making, cost efficiency and enhanced productivity, not only improving SME’s operations but empowering employees to work smarter, not harder. Technology, alongside continuous training, creates a culture of upskilling and career growth, enabling employees to future-proof their careers.
SMEs can further enhance their attractiveness by capitalising on their networks – connecting employees with industry experts, thought leaders, academics and peers, to create unrivalled opportunities for learning and growth. Facilitating employee access to these networks enables them to expand their skillsets, gain fresh insights and build valuable professional relationships. For instance, partnerships with universities can offer staff access to specialised training, research projects or advanced qualifications. Government-backed initiatives, such as apprenticeships or grants, can also play a role by easing the financial burden on SMEs while boosting employee development. Again, these opportunities foster a sense of purpose and belonging for employees, as they see their organisation investing in their long-term growth, which is appealing to candidates who value meaningful career progression.
Retention strategies should also focus on maximising value for employees. SMEs may not always match the salary packages of larger competitors, but they can offer unique benefits, such as flexible working arrangements, career autonomy and a workplace culture that prioritises wellbeing. These factors build a trusting and enjoyable working environment, often outweighing financial considerations for employees seeking job satisfaction and a sense of purpose.
Mark Millar, CEO, Puredrive Energy:
In today’s competitive job market, attracting and retaining skilled employees is a challenge, particularly for SMEs. While salary remains a key motivator, at Puredrive Energy we’ve found that workplace culture and environment often clinch the deal when it comes to both recruitment and retention.
For SMEs, it’s not just about exceeding the statutory minimums like the National Minimum Wage, annual leave, SSP or pension contributions. Offering creative and cost-effective perks can make a significant difference. For example, providing access to an on-site gym or free electric vehicle charging points are benefits that employees value, but they don’t have to break the bank. The key is finding ways to do more with less, especially when costs are rising.
Another powerful tool for SMEs is investing in employee development. People are increasingly interested in opportunities to expand their skills and gain new qualifications. Offering robust training programmes – particularly those that lead to recognisable certifications – is a proven way to attract and retain talent. Importantly, this also demonstrates that you’re committed to their long-term growth.
Consistency, fairness and equality in management practices are also essential. How employees are treated – both day-to-day and in critical moments – plays a significant role in their decision to stay or leave. This is why it’s crucial to hire leaders who align with your company’s ethos and culture. A good leader not only upholds these values but also enhances them, contributing positively to the overall work environment.
One size certainly doesn’t fit all when it comes to employee benefits, so offering a range of options ensures everyone can find something they value. However, company culture is the overarching factor that ties everything together. Employees want to feel they belong to a workplace that listens to them, values their input and genuinely cares about their wellbeing.
Throwing money at retention and recruitment isn’t always the answer. Communication – real communication – is vital. That means actively listening, understanding and responding to the needs and concerns of your team. Open dialogue helps identify what’s working, what isn’t and how to improve.
Interestingly, we’ve found that culture is so compelling that employees sometimes stay even after mentally ‘quitting’ their current roles. In these cases, it’s important to engage with them, understand their concerns and explore opportunities to move them into a role that better suits their skills and aspirations – whether within your company or outside it.
Ultimately, for SMEs, the secret to standing out lies in fostering a supportive, inclusive and adaptable workplace culture. By listening to your team, offering meaningful benefits and creating opportunities for growth, you can position your business as an attractive and rewarding place to work – no matter the size of your organisation.