With SMEs facing a challenging business environment, there is a way to boost performance without great expense. A large proportion of small and medium firms experience issues with their productivity -
93% of small and medium firms surveyed in London and 78% of businesses across Yorkshire, the South West and East England 1.
As a solution, some firms are turning to the world of employee benefits to address this, with 46% looking to wellbeing measures such as flexible working, while 36% are offering other perks and incentives 2. In the UK, 99% of all private sector businesses are either small or medium enterprises 3, so this will have a major effect on the wider UK economy.
A new survey of approximately 10,000 firms found SMEs are likely to be the most heavily and negatively affected by the UK leaving the European Union. Leading the research, Dr Ross Brown said: “Brexit-related concerns could result in a range of negative consequences for UK SMEs, especially the impact on reduced capital investment, which critically weakens and undermines their ability to grow and prosper 4.” Businesses, particularly SMEs with reduced budgets, need to look internally at making more of the resources already available. A benefits package supporting workers in their most vulnerable moments is one way to make a workforce happier, engaged and therefore more productive.
SMEs worry about competition, with 64% of UK ones facing competition from new digital players in their industry 5. Keeping up with new, digitally savvy competitors is difficult and investing in digital can be expensive.
An alternative is investing in an even more valuable resource than technology – employees.
Employee benefits are a security blanket that can increase employee loyalty and therefore retention. Unum figures show that the loss of an employee earning £25,000 a year or more costs a business an average of £30,614 – a major strain for any SME to bear 6.
SMEs are also less likely to have an HR department or Financial Director than their larger competitors, as well as potentially smaller budgets. It means they may be less likely to consider employee benefits as a source of employee satisfaction. But those that have can give themselves an advantage when it comes to recruitment and retention in the SME world.
As costs escalate, 55% of small businesses in the UK fear survival 7. A common misunderstanding about employee benefits is they are expensive, however, an employee benefits package could be a relatively low investment. Some are menu-based and can often be tailored to suit any size or shape of organisation. If we take Unum as an example, Keith Bale, Head of Partnerships, says: “Employee benefits are there to support workers. But that support can also help to increase loyalty and productivity among staff. For employers it can be a win-win. “At Unum, there is an option to mix and match benefits. It’s a case of finding out which benefits your employees want and letting them figure out a solution for you.” Facing the issues surrounding workplace productivity means looking after employees. And for that, employee benefits can provide a high-impact solution.
1,2 TheHRDirector.com. (2018). London SMEs struggle with productivity
3 FSB. (2017). UK small business statistics
4 University of St Andrews. (2018). The impact of Brexit on UK small and medium-sized enterprises
5 SME Insider. (2016). SMEs must adapt or struggle
6 Unum. (2014). The Cost of Brain Drain
7 Mi Business Mag. (2017). Challenges facing SMEs for 2017