Do your employees feel valued?
One in three British employees (34%) don’t feel valued by their employer, according to new research from Moorepay, the payroll & HR software and services provider.
The findings, published in a new report titled “The Engaged Employer” released today which focuses predominantly on smaller and medium sized businesses, reveal that three in four SMEs (77%) are struggling to recruit suitably qualified staff, and two-thirds (64%) are finding it difficult to retain them.
These challenges have been exacerbated by a ‘perfect storm’ of low unemployment and slow wage growth that has encouraged people to start looking for new opportunities at a time when good people are in high demand.
Despite this, SMEs are in many cases unaware that their workforce doesn’t feel valued. The study highlights a ‘value gap’ between employer and employee perceptions, with just 15% of SMEs believing their workers don’t feel valued, significantly less than the 27% of SME employees claiming to feel this way.
Stephen Bevan, Head of HR Research Development at the Institute of Employment Studies and co-author of 21st Century Workforces and Workplaces, explained: “The existence of this ‘perception gap’ between SMEs and their employees is worrying if SMEs are going to avoid losing out in the ongoing war for talent as the squeeze on labour supply tightens still further.
“To compete for skills, they must differentiate themselves from their competitors. Doing nothing is not really a credible option, even for SMEs with more constrained resources and less immediate access to specialist HR support. Companies need to make employees feel valued and make their reward and benefits packages fit for purpose, flexible, personalised and effective.
“It’s no coincidence that many of the companies which have achieved the best rates of customer loyalty also have high levels of staff loyalty – they are strongly linked and are often driven by the same philosophy of management. If businesses treated their employees as just another important group of customers and clients and constructed an ‘offer’ which both anticipated and responded to their needs, they would be much more likely to thrive.”
SMEs ‘out-gunned’ by larger rivals on benefits
The report examines the employee benefits being provided by businesses to recognise, reward and motivate their staff. It reveals that in a competitive labour market where small businesses are in direct competition with larger firms, they are being comprehensively outgunned by their larger rivals, who are more likely to provide almost every type of employee benefit.
Over one in five (22%) of all employees surveyed said their employer provides none of the benefits mentioned, rising to one in three (34%) for employees of SMEs.
What employees want: financial and flexible rewards
The vast majority of SMEs (87%) agree that in 2019, employees are looking for more than just pay. But while one in three SMEs (30%) believe ‘soft’ benefits have no or only slight importance in recruiting and retaining staff, the study reveals that some of these benefits are highly appealing to employees.
The most popular benefit for workers in SMEs is financial bonuses and incentives, cited by 30% of respondents. This is followed by the provision of pension contributions over and above the minimum legal requirement, cited by over one in four employees (27%).
Beyond the top financial rewards, it is flexibility that holds most appeal for SME employees, with four of the top eight most attractive benefits offering some form of flexibility or improvement to work-life balance. Flexible working or remote working is viewed as the third most important benefit overall, cited by one in four SME employees (26%). The option of working a four-day week is named as important by 24% of respondents working for SMEs, and performance-based leave, where additional leave is granted as a reward for hitting performance targets, is prioritised by one in ten (10%).
Anthony Vollmer, Managing Director at Moorepay, said: “For all the popularity of new types of benefits and ways of working, traditional financial rewards like bonus pay and generous pension schemes still hold the most appeal for workers. But people want different things at different ages, life stages, and depending on their lifestyle. So it is vital that benefits packages are relevant to employees, of value to them, and simple to manage from both sides.”
Flexible and/or remote working is much more popular for younger age groups, as are benefits that provide some form of social interaction, including the organisation of team social events or the provision of social space within the working environment, such as games rooms or chill-out rooms.
Women place significantly more importance than men on benefits that allow flexibility – particularly flexible and/or remote working, which is cited as important by 35% of female employees compared to just 26% of male employees.
The cost-benefit analysis of benefits
The study flags concerns around the significant proportion of SMEs that are not even considering the implementation of benefits that are among the most popular with workers. One in five SMEs (21%) say they won’t consider providing financial bonuses or incentives, despite them being the most important benefit for employees, and potentially a powerful motivational tool to drive productivity at the same time as staff satisfaction. Another one in five (19%) won’t consider offering flexible and/or remote working, despite its considerable popularity; and one in four (27%) won’t even think about offering an Employee Assistance Programme.
Anthony Vollmer added: “Business owners and managers have to consider the financial and time costs of benefits programmes and weigh them against the rewards they can generate, in terms of employee satisfaction, engagement, loyalty and productivity. Historically, SMEs have been put off providing many benefits because of the belief they are time-consuming and cumbersome to manage. While this may have been true in the past, today’s technology platforms allow employee benefits programmes to be implemented and managed easily by time-pressed owners, senior managers, and employees.
“Of course, employee benefits are just one tactic in the battle to recruit and retain the best people but, if devised and managed properly, they can help businesses deliver a great employee experience and reap the rewards of happy, loyal and motivated workforces.”
Percentage of employees (all sizes of business) who don’t feel valued, by region
|Region||Percentage of employees who DON’T feel valued by their employer|
|Yorkshire & the Humber||34%|
|East of England||32%|