It is true that businesses of all sizes are struggling to retain and attract talent, however I find that this is more so for SMEs as they often find themselves with an inadequate toolkit to address the challenge. The same old approaches aren’t working in the present circumstances and will not build the capabilities such SMEs will need in the long run.

Research after research, from allover the globe, is clearly indicating that SMEs seem to all agree that attracting and retaining talent is their present number-one challenge — with a higher priority than dealing with supply-chain disruptions or managing the increase in costs. The problem is that research also clearly indicates that many SMEs lack the tools to address this challenge and increase talent retention. It is true that SMEs have a number of inherent weaknesses when it comes to addressing the talent issues they face, but they also have critical strengths. SMEs have a need for talent that is greater that larger companies, because they tend to grow faster, whilst frequently they operate with weak talent planning capabilities. Moreover, SMEs lack three crucial talent assets and capabilities. First, they don’t attract CVs simply by virtue of being famous. Second, SMEs don’t have deep pockets and are therefore unable to compete for talent by throwing money at the problem, at least not on a sustained basis. Thirdly, HR teams in SMEs are either very small or non-existent.

There are however steps that SMEs can take to leverage their strengths and prevail in the present tough talent market.

1. Pinpoint the problem. It’s important for SME business leaders to identify and prioritise exactly which talent they’re lacking — the solution for a shortage of middle managers is different than one related to a shortage of machine operators.
2. Revamp the recruiting process. A few relatively simple changes can make a big difference in recruiting. First, make sure to write job adverts and job descriptions to emphasise the benefits of working for you, instead of just specs and requirements. Second, expand your talent pools. Many SMEs have inadequate or antiquated talent-acquisition processes that miss opportunities to seek diverse talent or to use techniques and technology to find passive candidates and career switchers. Third, as SME business owners and leaders you need to work your networks harder, starting with the networks of your current employees.
3. Craft a retention strategy. People who leave a company almost invariably get more pay at their new company, but that doesn’t necessarily mean money motivated their departure. Research shows that non-financial issues like engagement, close relationships with peers, and opportunities to learn and advance are important elements of an employer’s value proposition. These are too often taken for granted in SMEs.
4. Build better leaders & bosses. Research shows that dissatisfaction with their immediate boss is the number-one reason people leave their jobs. SMEs rarely invest in leadership training development, though it can be done affordably. Such an investment would help rising leaders to stay and improve retention on their teams.
5. Get explicit about career paths. Many SME business leaders seem to think that their people will find out about opportunities to advance from the so called “grapevine”. That is not enough. SMEs need to be much more direct in ensuring that employees hear about opportunities directly and have personal discussions about career goals. SMEs often have few management layers, so advancement and development often happens from lateral moves.
6. Create an inclusive culture. Those values-based motivators like being valued by the organisation and the boss, having a sense of belonging and having a work-life balance – are so important….coupled with giving more support for the other stages of the “employee life cycle” like training, leadership development and succession planning – are all ways to instill inclusiveness into a company culture.
7. Yes, money matters. SMEs need to set a whole business strategy designed for retention and take an open minded approach to benefits. Being more flexible, SMEs can be much more creative than their bigger companies when it comes to offering creative and flexible reward packages.

While SMEs come to the talent competition with evident weaknesses, they bring significant strengths as well. Their talent management processes are scanty, but the companies also tend not to be weighed down by rigid, bureaucratic processes. This should give SMEs a nimbleness when it comes to recruiting and promoting — a very real advantage when you need to move fast when you spot someone you want to employ or need to keep. Because top management is closer to the rank-and-file, SMEs should be better able to seek and act on employee referrals. When it comes to job flexibility, they can see what bigger companies offer and raise the stakes like offering a better work-life balance.

By combining these advantages with focused initiatives, as outlined above, SMEs can get through the current talent acquisition & retention challenge and find themselves with stronger long-term talent capabilities as well.