Attracting, retaining and motivating staff is the key to SME business concerns
According to a recent SME Research Report, one of the top three business concerns for owners of small to medium-sized enterprises (SMEs) is Stress and Lifestyle. Less than half of SME business owners felt they spent enough time with their families, and only around a quarter believed the business could operate without them.
One of the key ways of enabling owners to relinquish control, even for short periods, is to have key staff who can be empowered in their absence. The more reliant a business is on the technical and industry knowledge of the owners, the more important it is to mentor, train and retain staff to reduce stress on the owners and provide lifestyle flexibility.
The top business concern for owners of SMEs was Business Planning. Owners want to, and need to, be able to think strategically and future-proof their businesses in a rapidly changing world. Having technically-skilled staff who are motivated and engaged enables the business to adapt quickly and efficiently to its changing environment. Other benefits include providing avenues for succession planning and increasing the attractiveness of the business in the event the owners wish to sell.
For SMEs, the loss of key staff is a significant risk as they commonly only have small total numbers of staff. Although the studies are mixed on the actual dollar cost of employee turnover, it’s clear that it costs significantly more for SMEs to recruit, hire and train a new staff member than to retain and motivate existing staff members.
Given this, it is surprising that the SME Research Report found that only a quarter of SMEs have strategies in place to attract, retain and motivate staff. One of the main reasons appears to be that SMEs often lack expertise in human resources and recruitment. However, with guidance, there are many strategies that SMEs can implement to attract, retain and motivate the right staff, including:
- Maintain market wages - you need to know how your wages compare with industry averages;
- Hire people that not only have the technical skills, but also “fit” with your organisation’s culture;
- Build skills internally - provide a training program, tailored for individual staff members;
- Establish a formal mentoring program for key staff;
- Have individual pathways to career goals - introduce a performance and development program;
- Provide bonuses for performance above expectations;
- Have a staff incentive plan linked to sales and profits;
- Allow staff to buy into the business;
- Provide informal functions occasionally to allow staff and owners to interact without the work day stressors;
- Invite feedback to determine if employees are happy;
- In the event that a staff member does leave, provide an exit interview to find out why.
These strategies take into account the intrinsic (done for enjoyment) and extrinsic (done for external reward) factors which motivate employees. Not all of these strategies are appropriate for every SME, or every employee. The combination which could be implemented will vary depending on the industry, size of the SME, staff structure and available budget, among other things. For assistance in determining and quantifying strategies so your business can operate more effectively in your absence including attracting, retaining and motivating your staff, speak with your usual Hanrick Curran Adviser or alternatively contact Tim Taylor, Matthew Beasley, Tony Hunt or Stephen Brake on 07 3218 3900.
Please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice.