How to attract staff, hold on to them, and keep them happy

  • 16 Feb 2022

It’s already being branded the ‘Great Resignation’ – in the next 12 months, the number of employees quitting for greener grass is expected to go through the roof. According to a study by life insurance firm MetLife conducted in late 2021, 54 per cent of employees are considering leaving their job in the next 18 months. 

“Talk of a skills shortage cliff-edge being reached feels very real,” says Emelia Quist, FSB Head of Policy Research. “Staff have endured a tough year, with some having to go on furlough for long periods of time. Employees are also aware of the financial constraints that the pandemic has placed upon employers, many of which were unable to offer pay rises last year.” Research by FSB conducted in 2021 found that 45 per cent of Scottish firms felt they did not have the staff they needed to run their business, leaving some to shorten their opening hours or reduce the services they offer. 

 

With 20 per cent of SMEs unable to offer a pay rise, according to WorkLife’s latest Small Business Monitor, Tina McKenzie, who runs Northern Irish recruitment firm Staffline, says: “People are re-evaluating. There’s potentially the start of a real challenge around the corner for SMEs.”

But with pay looking less likely to be a part of SMEs’ short-term attraction and retention strategies, are there other ways SMEs can ensure they keep the staff they have while positioning themselves as go-to employers for job-hunters? Thankfully, yes. 

“If there’s one word that sums up the current recruitment market, it’s ‘flexibility’,” says Ms McKenzie. “Simply giving staff freedom to organise work around them is now worth as much, if not more, than a salary rise to many. While it might mean bosses needing to hire three people on flexible hours rather than two full-time, there’s generally no more cost, and just a little bit more organisation.” 

Amy Foster, Director of Nomad HR & Recruitment, believes the fact that SMEs have a greater variety of job functions should mean they are well suited to offering this. “What we’re now seeing is that where flexibility isn’t being offered – such as with one client we’re recruiting for – we’ve struggled,” she says. “We’ve attracted just 15 applications over nearly a year. Of these, only two have been selected for interview.”

Flexible working doesn’t have to mean disorganisation. SMEs could take a leaf out of Dropbox’s book; the company recently launched a ‘core hours’ element to its flex offering to partially control this, while also giving staff more control. For four hours each day everyone has to be available at the same time – but the rest of the time, people can work where and when they want.

Lightening the load

The typical rule of thumb for both attraction and retention is that any offering that helps to alleviate a worry is highly prized. With 16 per cent of staff suffering from poor wellbeing due to financial worries, according to digital pay company PayDashboard, solutions available to SMEs include debt consolidation services (with renegotiated repayments paid directly out through payroll) or solutions such as early wage access (for example mid-month) to help employees pay for unexpected costs. Ms McKenzie has recently introduced private medical cover for staff – something she says has become particularly prized since Covid-19 hit. 

 

Employee benefits can be given a specific purpose. If the aim is to help staff save money, or make the money they have work harder, there are other options, such as signing up to benefits portals that give staff access to money-off deals for things like mobile phones, tablets or entertainment. Through FSB pirkx, small business owners can offer their staff access to a range of affordable wellbeing benefits such as health services, gym classes and cashback offers, rewarding them for their hard work while also helping them stay fit and well. 

At a time of stagnant pay, salary sacrifice (SS) schemes such as Cycle2Work effectively give staff a rise, too. Vehicle leasing firm SOGO has recently introduced a scheme that enables staff to lease electric vehicles, while travel company Inspire has just launched an SS scheme that lets staff pay for their summer holidays.

Another mantra is ‘be personal’. Georgina Cameron Human Resources Director at premium natural pet food brand Lily’s Kitchen, did just this when lockdown first struck. “We made sure everyone was properly set up at home by buying staff ergonomic chairs and desks, and even any specific IT equipment they wanted,” she says. 

“We also knew this way of working would be challenging to mental health, so we complemented this by partnering with the charity Mind to benchmark against its Wellbeing Index. This saw us introduce elements such as ‘Golden Hours’, where we commit to there being no meetings, and we also introduced 10 days’ per year paid time off for staff that had dependents.”

Working hours

Training and development is an often-ignored tool that has equally good retention powers, demonstrating that bosses have a long-term vision for their staff. But if even this seems like tinkering around the edges, some SMEs have decided to go for something more radical. 

 

“Last year there was more and more literature coming out about four-day weeks as the cure to work-life balance and creating home working harmony,” says Riki Neill, who runs PR firm 
RNN Comms. “Our sector is well known for having a long-hours culture so we decided to give it a go and trial it for six months.” 

Worried about what clients might think, she did it on the quiet. But not only did they not even notice (Ms Neill ensured there was always one person available), she says that staff are 20 per cent more productive, and the policy is now an attraction magnet. She says: “When we advertised for a new person and promised this perk for new starters, we had the most applicants ever – more than 50 – for the role.”

Another novel approach to attraction/retention is offering a once-unthinkable perk – unlimited holidays – which growing numbers of firms are now experimenting with. Chris Jefford, founder of creative agency Truant, is one: “Covid-19 really presented an opportunity to ask what we could do to make us a business that people would want to work in forever,” he says.

“We realised people really worried about how much time they can take off, and ended up not taking enough holiday. The default position now is that we say to people take as much as you want, as long as you’ve done what you need to. When you trust people, we find it doesn’t get abused.”

With SMEs likely to have lots on their plates just to stay afloat, worrying about staff quitting is clearly one thing they can do without. The average staff member costs SMEs £12,000 to replace, according to analysis by Accounts & Legal Consultants, so relatively small outlays that help assuage this will be money well spent. “Our research shows most people want to be hired on a permanent basis, so just by offering this, rather than unpredictable hours, SMEs could be on to a winner,” says Ms Quist. “Then it’s just a case of being continually supportive – which, as we all know, SMEs are in one of the best positions to be.”  

Untapped talent

When it comes to finding new staff who are likely to be loyal, savvy SMEs could do worse than to tap into highly skilled but often traditionally marginalised groups – such as returning mothers, disabled people or former services personnel. 

“If I could hire 100 ex-services personnel in my business I would,” asserts Lee Harris-Hamer, owner of White Horse Cleaning Services, who is such a supporter of former military staff that eight of his 36-strong team are ex-forces, or the spouses of those who were. He has also just achieved the silver Armed Forces Covenant accreditation, which ranks him as a forces-friendly employer. 

 

Some 14,000 skilled and experienced people leave the armed forces each year but, according to armed forces charity SSAFA, 31 per cent of recruiters are reluctant to employ ex-military personnel. Major fears include them not reintegrating well or carrying post-traumatic stress disorder symptoms. 

But according to Mr Harris-Hamer – who works with FSB-supported organisation X-Forces Enterprise, which supports service leavers and veterans into self-employment and business ownership – not only do ex-services staff have a can-do attitude, they also repay being given opportunities with loyalty. “All former military staff stay with us for at least two years – way above our industry average,” he says. “We find that because of previous employment knockbacks, if you respect them, they repay you. A military-inculcated work ethic and desire to do things properly is just second nature for these people, making them excellent team players.” 

Numerous charities now exist to help SMEs find and place former services personnel from the likes of RFEA – The Forces Employment Charity – to SoldierOn.org, and for Gavin Watson, technical director of cybersecurity consultancy, Pentest People, he’ll also be looking for more.

“So far we’ve four ex-services personnel, including a former tank driver and an ex-ammunition technical officer and logistics officer, out of our 40-strong team. 

“We admit we’ve stumbled on this pool of people. We never specifically sought them before, 
but after hiring them, we know the value and loyalty these people bring. They are disciplined, love a challenge and we find they flourish.” 

According to FSB’s Small Business, Big Heart: Bringing Communities Together report in 2019, 95 per cent of SMEs said they had employed at least one worker from a labour market disadvantaged group in the previous three years, including those with a known disability (30 per cent) and where English is a second language (24 per cent). 

Other groups SMEs could consider are those people being made redundant. Last year the Institute of Export and International Trade (IOE&IT) worked with outplacement firm Talent Retention Solutions to hire staff it urgently needed to provide call centre advice during the Brexit transition period. Some 40 per cent of an intake of 54 staff came from this avenue alone.

 

Older workers are also a potentially large untapped resource. IOE&IT also contacted members who had recently retired and coaxed them out of retirement to join their team. Data by Hitachi Capital Business Finance suggests older people are more resilient, independent, and more capable of working at home than younger people, who still crave praise/colleagues around them.

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