A recent article in the Harvard Business Review pointed to the challenges companies are facing in attracting and retaining employees, as nearly 57 million Americans quit their jobs between January 2021 and February 2022. With employees rethinking their work and personal lives, the tight labor market has made it difficult for companies of all sizes to compete for talent. However, smaller companies face unique challenges with limited financial resources to offer traditional salary, benefits, and professional development opportunities compared to their larger counterparts.
Nonetheless, smaller businesses, including fast-growing startups, can stay competitive by getting creative with the benefits and perks they offer, and building positive workplace cultures. Keeping an eye on the future is essential since salaries and benefits are the number-one expense for companies, followed by benefits. While economies of scale may help mitigate some of these costs, it’s essential to plan for growth and ensure that the benefits package can scale alongside the company.
Here are some tips to help smaller companies attract and retain employees by competing with larger companies:
1. Find out what benefits and perks employees value by conducting surveys periodically to keep up with their changing priorities. This is a critical step in competing for talent because no matter how large an investment you make, it won’t pay off unless you provide the benefits and perks your people value the most.
2. Consider a financial wellness program that provides access to advisors who can assist employees as they set and meet their savings goals and improve their finances. With inflation, high fuel costs, and soaring rent affecting personal finances, employees are feeling stressed, which can impact productivity and attendance or prompt them to look for higher-paying jobs.
3. Take a look at voluntary benefits like pet insurance, protection against identity theft or legal issues, childcare benefits, etc. These benefits can deliver real value to your workers through group buying power and enable employees to purchase benefits at a lower rate than if they were purchasing them on their own, without incurring extra expenses.
4. Look for ways to increase flexibility, as the ability to work from anywhere and set their own hours has become extremely important to employees. Workplace flexibility is a way smaller businesses can stand out when trying to attract and retain workers.
5. Be generous with PTO because it’s a “softer” cost than items like health insurance. Generosity with PTO lets employees know the company cares about them as people, which can give a business an edge over a company with more rigid PTO policies.
6. Check your employee demographics and tailor benefits accordingly. While surveying employees to determine what benefits and perks they value is essential to competing for talent, giving some thought to employee demographics (i.e., age range, pay scale, region) and looking for programs that may be especially appealing to specific groups in your workplace can also help.
Smaller companies can level the playing field with larger competitors through custom benefits packages and offering perks that can both attract and retain highly skilled people. Benefits don’t have to break the bank either, as voluntary benefits or flexible work hours can be added without incurring extra expenses. Additionally, benefits like financial wellness checkups can ease employees’ financial stress.
However, as a small and growing business, keep in mind that your benefits will scale as your company grows. It’s important to have a long-term strategy in mind, rather than adding programs and perks piecemeal. If you develop and stick to a strategy, and maximize your flexibility as a smaller employer, you can compete for talent against much larger companies and succeed.