Research carried out on 1,000 employees from UK companies of fewer than 250 staff has shown that small and medium-sized companies (SMEs) should focus on retaining their staff.  It also gives insight into relevant HR trends including reward and recognition, engagement and future of work.

The survey - carried out by Sodexo Engage, an Employee & Consumer Engagement company - found that 52 per cent of SME staff would prefer to work for a large company and 32 per cent were thinking of leaving their present employment this year.

For SME job hirers - who have smaller budgets to work with - this provides a challenge and experts advise them to retain their staff by ‘playing to their strengths’ namely, company culture.

Jamie Mackenzie - Director at Sodexo Engage - stated that because many SME employees are already joining bigger companies, leaders of the smaller businesses need to re-evaluate their retention strategy.

He said:

“While SMEs may not be in a position to compete financially, they have plenty of strengths to play to. Building on company culture, that places recognition at its heart, can improve employee experience and boost retention.”

Although pay was significant for employees - with 43 per cent of respondents saying that low pay was their main complaint when working for a small company - company culture was named as an attraction. 

However, 91 per cent of those surveyed felt that their work was more recognised in a small business and 42 per cent preferred the close-knit community. Another factor mentioned by 42 per cent was the opportunity to have a better work/life balance, whilst 36 per cent cited better company values.

Sophie Forrest - of consultancy ForrestHR - said that by investing in their strengths, smaller businesses can beat large companies in the race for talent.

She stated:

"One of the key advantages of a smaller business is the family feel-the-fact that you’re not a cog in the machine, the boss knows everyone’s name, their children’s names and where they went on holiday. Amplifying this is one way of increasing the sense of staff belonging and instilling loyalty; flexible working, family-friendly policies, supporting positive work-life balance and team building exercises are all strategies you can deploy to strengthen that family feeling.”

She remarked that the variety of tasks in smaller businesses also enables HR leaders to create interesting and varied jobs, adding:

"And because the boss does know everyone, SMEs also have a tremendous advantage in being able to create a culture of recognition, where the whole team knows and applauds when someone is doing well, which this research shows is invaluable in making employees feel like they belong."