How to Attract and Retain Top Talent: Benefits SMEs Can Offer Employees

Regardless of the size of a company, one crucial ingredient for success is hiring reliable, talented, and motivated employees, a.k.a. people who make up your A-team and allow your company to thrive. But the work won't stop with simply bringing them on board. For business owners, you must retain such valuable resources – that is, by keeping them engaged and satisfied.

It is especially true for small and medium-sized enterprises (SMEs) – or organisations that employ one to 250 workers at a time – which are quick to suffer the consequences of having fast employee turnover. For starters, losing someone when your staff is already small can instantly cripple day-to-day operations and affect overall productivity. The lack of manpower can also be detrimental to team morale as available employees are forced to pick up the slack, leading to overwork and burnout.

It was expensive, too. According to a report, it costs an average of 50 to 75 per cent of an employee’s salary to replace an individual in the same or similar capacity. For example, for an employee who makes SGD 5,000 a year, a business owner can expect to spend roughly SGD 2,500 to 3,750 in finding, hiring, and training a replacement. 

While the Singapore Human Resources Institute (SHRI) believes there is no one way to truly calculate the cost of turnovers, it is a reflection of how successful a company’s organisational culture is – how effective its hiring policies and management are.

In Singapore’s increasingly competitive job market, it’s no surprise that SMEs are having difficulty recruiting and retaining talent – more so now, when candidates crave more work-life balance and better flexibility, among other things. To be fair, you can also say the same for larger corporations, with the country’s overall employee retention rate being the lowest in the Asia Pacific (APAC) region in 2022 at 53 per cent. 

But why are SMEs often hard-pressed when it comes to maintaining employees? Several factors are at play, a major one being the size of the organisation. (Also read: SMEs In Focus: Why SMEs Lose Talent) 

So what can SMEs do to build up their workforce and ensure it stays strong? The main goal is to keep employees happy with a good balance between what they need and what they want. And with hiring activities in Singapore on an upward trend according to JobStreet’s 2022-2023 Outlook | Hiring, Compensation & Benefits Report, hirers must know exactly what these are to stay relevant – and competitive – in today’s job market. 

From rethinking salaries and performance incentives to enhancing employee benefits and improving working arrangements, here are some tips on how to help your small-to-medium business attract and secure valuable manpower.

1. Match the going rate for offered positions. In a survey, being fairly rewarded financially ranked as the top factor for Singapore employees when considering a job change, and this is true across industries and company sizes. Realistically speaking, though, SMEs are not exactly top of mind for candidates looking to make big bucks—at least, not immediately.

To still have a good shot at attracting top employees, your best bet is to at least match the going rate for the position for which you are hiring. You can’t expect the cream of the crop when you’re offering SGD 3000 for a job paying an industry standard of SGD 8,000. You can check the Explore Salaries tool so you can stay competitive salary-wise.

2. Review wages regularly. It’s not enough to match the market rate upon hiring. Review your employees' salaries regularly – annually, ideally – to ensure they remain aligned with the current market rates and avoid having your employees jump ship for a better-paying gig. Reward accordingly, too, with regular top-ups based on performance or whenever warranted to show your appreciation for their hard work. It goes a long way in building loyalty among your staff and keeping them committed to your company.

In Singapore, the outlook for salary increases looks pretty good.

However, given Singapore’s progressive resident tax rate system, your workers must be aware of changes in their income tax rate and Central Provident Fund (CPF) contributions whenever their salary increases. You can compute the income tax using this online tool. For CPF contribution rates, check this guide.

3. Enhance employee benefits.   Not surprisingly, 85 per cent of employees are more likely to remain with their organisations when their benefits package meets their needs, says a study. According to a survey by data provider WTW, Singaporeans want their employers to focus primarily on the following benefits—retirement, health (or medical insurance), and flexible work—with the first two being a reflection of workers’ concerns for “long-term financial security.”

Moreover, current trends illustrate the growing popularity of “special leaves,” like compassionate leaves (or excused absences due to personal or family emergencies), birthday leaves, and even menstrual leaves for women. Cash for housing allowance and employee quarters are also among the most common forms of additional benefits in Singapore, as well as access to employee assistance programmes that support mental health wellness.

Here are other top benefits that companies are looking to offer and improve on this 2023, according to the JobStreet report, and which you can consider offering, too:

• Work phone package

• Local transportation allowance

• Free parking at the office

• Work activities and events extended to family members

• Medical protection and insurance for family members

• Nursing room at the workplace (for mothers)

4. Offer flexible working arrangements.   With the pandemic forever changing the way we work – and putting the spotlight on the many perks of remote working – it’s no surprise that many candidates now prefer to enjoy some flexibility. It allows them to prioritise the other commitments that they have in life. 

Employers across the board seem to be embracing this, too. One-third of companies are implementing a hybrid working model this 2023, with 3 per cent offering completely remote work. The good news: SME owners may find it easier to meet employee demand for flexible working due to its smaller scale of operations versus that of big companies. It cuts costs, too, particularly on office space expenses.

However, endeavour to equip your employees with the right tools. Provide a laptop for a work-anywhere setup, subsidise WiFi or cellular data for mobile communications, and give access to software and programmes that aid in digitised working.

5. Encourage and support work-life balance.   Given the increased focus on self-care, especially among younger employees (another pandemic effect), a way to stand out as a good employer – regardless of your company size – is to encourage healthy work-life balance among your employees.

How to do this? By providing perks and activities that enhance your workers’ wellness. According to the outlook report, more and more SG companies are looking at offering work-life benefits, such as granting early leaves on Fridays and festive days. They also provide free snacks and drinks at the office and give access to entertainment and fitness facilities at work.

By encouraging employees to take care of themselves, you’re sending a message that they matter – as people, and not just as employees. Such benefits and activities can also help foster better relationships among workers and employers and help make them feel they’re part of a family (which will make it harder for them to leave!).

6. Provide room for career growth. Many talented and ambitious candidates feel like the smaller hierarchy gives their careers little room for mobility. 

To retain your best employees, you must develop a path for career growth or, at least, provide opportunities that offer upward mobility in case higher positions are limited. Collaborate with them constantly, offer one-on-one mentorship and feedback, and provide training and education programs. Allow them the freedom to try new things and explore endeavours outside their work scope, if they’re willing. Such growth opportunities are important because it keeps employees happy – and happy employees stick around.

The company benefits in the long run, too. You equip your organisation with more assets to help your business thrive better. And in this hyper-competitive job market, you might find that it’s easier to groom your own star employees rather than to search high and low (and compete!) for them.

In the war for talent, it may seem that SMEs are at a disadvantage, like a bunch of Davids battling corporate-clad Goliaths. By thoughtfully considering the shifting demands and priorities of today’s workforce, though, employers can even out the playing field and get a shot at landing and retaining the best employees for their businesses. 

Visit our Career Resources page or download JobStreet’s app on the App Store and Google Play for more hiring and employment tips. Click here to download the full 2022-2023 Outlook | Hiring, Compensation & Benefits Report.