Why rewarding your team is critical for SMEs?
Whether the economy is booming or in recession, getting great people is always a challenge. How you reward them is critical, unless it is a voluntary position that people feel passionately about and they can afford to live without income.
What do we mean by Reward? This is not just pay, although that is 70-90% of packages. Pay needs to be both fair and market competitive and hence internal levelling and external benchmarking are important. But it is hard to stand out on base pay unless you have very deep pockets, which most SMEs do not. But standing out from the competition can be key in attraction.
Reward can not only support SMEs in getting, keeping and motivating staff but also in aligning to values, encouraging your team to develop themselves and engaging them.
So, what forms Reward as well as pay? At Reward Heads we define Reward as everything that someone gets from their employer, another word for the Employee Value Proposition. As well as pay that is bonus, benefits, recognition, development and policies such as flexibility and engagement.
Benefits, including pension and wellbeing, are a critical part of the package and can be less about market comparison and more about reinforcing the culture and values of the business and really delivering exactly what your team want. This has been a recent and growing trend – people want benefits that really benefit them, rather than a standard set or what the senior team value.
Of course, that is true of all businesses, so what are the particular challenges for small businesses? Some benefits are harder to secure if the team is small, for example, ones that are risk-based like Private Medical Insurance as there are fewer people to spread the risk over, but most are available. Some can be contracted easily and directly such as Health cash plans, Give as you Earn, and pension, some can require a broker to search the market such as Life Assurance, Group Income Protection.
There are opportunities open to small businesses which are a real challenge for larger ones. Owners and senior team can engage with all of the team much more easily than in large businesses and respond more quickly to individual needs.
It is much easier to understand what people want as you and you don’t need fancy systems to capture information and choices.
The start point is knowing who you are as a business and what you want to reward. That sounds obvious but we have seen examples of real disconnect - an organisation says “we are all about delighting customers” but their bonus scheme is purely about profit, or “we care about our people; we treat them like family” and then offer statutory only maternity and paternity benefits. Reward is a great way of aligning your team around your business goals and being able to reinforce every day what is important.
Victoria Milford, Reward Heads Our mission is to enable everyone to realise their potential through Total Reward: our clients, their employees and our team. Reward Heads are a boutique Reward consultancy operating remotely serving clients across the UK and globally for UK based clients. We work with organisations across a range of sizes and sectors to enable them to make the most out of Total Reward. Our solutions are not pre-made they are tailored to each organisation, its challenges and opportunities. We help organisations to use all aspects of Total Reward - pay, bonus and incentives, benefits, recognition and so on - to attract, retain, motivate and align the best people for their organisation, developing frameworks to support fairness and equity. Reward Heads educate, advise, devise and deliver customised Reward programmes, provide coaching on Reward, and resourcing for Reward roles. Contact us on rewardsolutions@rewardheads.co.uk or follow us on LinkedIn in for articles and content - Reward Heads LinkedIn |
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