Beyond the paycheck: How SMEs can attract and retain talent

By Chris Ronald, below, VP EMEA, BHN

For SMEs, the loss of even one employee can be catastrophic for the business. High employee turnover leads to a loss of knowledge, decreased productivity, and significant financial burdens.

Despite signs that the cost-of-living crisis is alleviating, families and employees are still suffering the impacts of months of financial turmoil. A recent BHN Extras study found a worrying trend: 76% of small business employees are concerned about their financial situation in the next 12 months, yet only 20% of owners are looking to support them

Maintaining employee’s wellbeing is important for all leaders, however it is even more crucial for small business owners. Especially as a quarter (25%) of them are in fear of losing talent to competitors.

In today’s economic climate, many SMEs are finding it difficult to compete in a traditional pay war to retain talent. For the vast majority of SMEs, traditional solutions like significant pay hikes or bonuses may not be sustainable. This presents a unique challenge – how to retain top talent without breaking the bank?

The answer lies in a multi-pronged approach to employee retention. SMEs need to take a balanced yet creative approach and in some cases a re-focus on their c current workforce. This goes beyond just salary but to address the financial support needs of staff and help their salaries go tangibly further. This can be done through a diverse range of benefits that will support employees in what they need most, from discounted high street gift cards, cashback on everyday spending to help with the costly food shop, to salary sacrifice schemes that are there when you need a new bike, want to upgrade a family laptop of smartphone or the washing machine breaks down,

Beyond the Paycheck: How SMEs Can Win

By offering benefits that address employees’ real needs, showing care and understanding, and helping to reduce financial stress, SMEs can create a more attractive work environment and boost loyalty.

Benefits that Matter:

With the ongoing cost of living crisis continuing to bite, businesses must be on hand to support employees and their families when they need it most. Although traditional benefits offering such as discounted gym memberships are still of interest, be sure to supply your employees with a range of offerings. According to BHN, the reason 32% of small business employees aren’t using their cost-saving benefits is because they don’t apply to things they usually buy. This shows a clear misalignment in the provisions employers are providing, compared to what employees want. Most companies employee a diverse range of employees, with different needs and wants – What may be a lifeline to one, may be different to another. Ease the burden, provide options and show your employees you care.

Show appreciation to your employees:

We all like to know when we’re doing a good job. Often a small pick-me-up can go a long way – especially during tough times. One way to do this is giving a gift card to team members to celebrate events such as birthdays or long service awards through to recognising achievements or demonstrating the right behaviours at work. Not only does this show a degree of appreciation, combining this with other incentives can create a happier and more productive workforce. We’d always recommend a multi-choice gift card that will give your employees ultimate choice on where to spend it.

Work-Life Balance and Wellbeing:

It’s important for all businesses to promote a healthy work environment with flexible work arrangements and a focus on employee wellbeing. A key part of nurturing employee wellbeing is supporting individuals in getting out and staying active. As we enter the summer months, there is no better time to pick back up cycling or start a new hobby. Through benefits like Cyclescheme, employees can get access to bikes at a discounted rate and pay back through salary sacrifice. And, the benefits of active commuting and mental health are clear. BHN data shows that 17% of respondents have taken up cycling to work and all saw positive impacts.

However, wellbeing isn’t only about getting out and about on your bike. Financial wellbeing is just as important as physical wellbeing, in fact, it’s increasingly becoming a leading factor of mental health concerns. Even with whispers of inflation easing, financial anxieties remain for many with a staggering 76% worrying about their future finances, with Millennials feeling the most heat (80%). Consider how financial coaching or support to ease worries about managing money might help your employees. No matter the size of the company, offering a supportive hand can make a huge difference to those who may be struggling financially. Remember, wellbeing means different things to different people, and financial anxiety must be more recognised as a contributing factor to this.

A win-win for SMEs

By prioritising employee well-being and offering comprehensive benefits packages that address today’s realities, SMEs can create a win-win situation. They’ll not only attract and retain top talent but also save money in the long run by reducing costly turnover.  In the end, it’s not about swapping paychecks for employee benefits solutions, but about recognising the changing needs of your workforce and offering a more holistic approach to employee satisfaction.