Job satisfaction doesn’t equate retention for SMEs, research reveals

Commentators say SMEs are not given enough credit for levels of job satisfaction but will ‘struggle’ competing with larger firms for talent

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Small and medium firms (SMEs) are facing a mass exodus of employees from the workplace, despite high levels of job satisfaction, a report has found.

Research by Westfield Health has found that just under half (46 per cent) of SME workers across the UK are considering moving jobs, despite three-quarters (76 per cent) being very satisfied with their job. 

Conducted as part of its Wellbeing for SMEs report, the survey of 2,000 employees found many small businesses could face up to £23 billion in recruitment costs, as a predicted 7.5 million workers look to move roles. It also estimated that the combination of replacing staff and rising energy prices will set SME’s back a total of £41.9 billion.

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Wes Wilkes, chief executive at IronMarket said SMEs have a much more acute sense for job satisfaction than they are given credit for. He added, “any exodus of workers is likely to be staved by a combination of fear, recessionary worry and 'worker warehousing' as hiring has been challenging”. 

Meanwhile, Liz Beck, CEO and leadership coach at Aspiring HR, said factors ranging from the economy to individual career aspirations are driving people to change roles, and that SMEs often find this difficult. “SMEs can sometimes struggle to respond in these areas due to their size, range of opportunities and affordability for pay increases and additional benefits,” said Beck, adding that smaller businesses are going to be “challenged to compete with offers from larger organisations”. 

Indeed, the research suggests that SME employees favour larger organisations as two-fifths (40 per cent) said it would offer a better salary, while 44 per cent believed a larger company would offer better career progression, and half (51 per cent) said better physical health support. 

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However, there is hope for SME recruitment, as the research found that over half (53 per cent) of workers don’t have a preference for where they work, while over a third (34 per cent) would like to work for a company with less than 250 employees. 

Almost two-thirds (60 per cent) said that smaller companies allowed them better contact with senior leaders, while just under half (48 per cent) said SMEs maintained a good workplace culture. Additionally, over a third (35 per cent) said smaller companies allowed them a better work-life balance. 

Elaine Briggs, chief education and partnerships officer at Future Fit for Business, said that training and development will play a key role in SMEs wishing to retain their staff. 

“To reduce costs on recruitment, the focus needs to be on retention, which comes from training your staff to do the job well, empowering them to take ownership of their work and rewarding them for that work,” said Briggs. 

Similarly, Dave Capper, CEO at Westfield Health, said there was a “David and Goliath battle for talent on the horizon” but smaller businesses have a real opportunity to play to their strengths  

“For SMEs looking to attract top talent away from large businesses, prioritising company culture and bridging the benefits gap with small investments in key areas, like mental health support, could be the key to recovering and thriving in the post-Covid economy”, said Capper. 

Martin McTague, national chair of the Federation of Small Businesses (FSB), said: “The prospect of more outlay on recruitment for small firms at a time when many are struggling with inflation in almost every area of operation is a very unwelcome one, especially as small businesses are far less likely to have a dedicated recruitment resource in-house.”

He added that the recent Scaling Up Skills report from the Federation of Small Businesses (FSB) found that of those small businesses that have tried to recruit in the past 12 months, 78 per cent have experienced difficulties in recruiting staff due to various reasons. These include, alack of individuals with relevant qualifications, skills and experience (82 per cent) and a low number of applicants generally (60 per cent).