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Giving unhappy and disengaged employees will not boost commitment or keep them at the business, according to new research.

The Workforce Institute at Kronos and Coleman Parkes Research found that 45% of employees believe that the UK’s small and medium-sized enterprises (SMEs) need to focus on providing a healthy work-life balance if they want to boost employee engagement and successfully compete with their large enterprise counterparts.

Engagement is critical to business continuity and success, especially for smaller businesses, with engaged employees much more likely to “go to extra mile” for the business. But you can’t buy employee engagement. The research ranked remuneration a lowly 10th of 11 reasons for resigning, whereas not feeling valued topped the list with 60% naming this as a key factor when considering resignation.

The research showed that, particularly within SMEs, the lack of staff availability, high levels of absenteeism, poor technology, and limited support from team members were the main reasons why 85% of respondents felt they were unable to complete all their daily tasks. This is exacerbated by the fact that employees often perform multiple roles.

Neil Pickering, industry and customer insight manager at Kronos, said: “While they may not have the deep pockets of their enterprise counterparts, SMEs can capitalise on their innate agility, together with less complicated structures and processes, to focus on boosting productivity, innovation and growth through better employee engagement. A core element of this engagement strategy will involve enabling a better work-life balance that employees crave by capitalising on the improved productivity and cost efficiency that can be achieve through a flexible working environment.”

Balancing the needs of employees with the financial needs of the business is critical for employee engagement, however, the research showed that staff are under the impression this is not a priority for business owners. Fifty-nine per cent of respondents think the CEO is only focused on the numbers, rather than the people who deliver the work, whilst only 34% rate employee engagement as strong in their organisation.

The study found that employees at smaller businesses are stretched to the limit. But that can be avoided. Nearly three quarters (72%) cited loss of productivity caused by manual systems, and only 35% rate their productivity as strong. But it only takes a small change to make a radical improvement. Kronos said organisations must focus on implementing the right technology to make working life easier and employees agree, with one in six claiming that better technology would enhance workforce management and boost productivity. Three quarters (77%) of HR and business managers said outdated systems and technology were their biggest challenge.

Joyce Marony, director of The Workforce Institute at Kronos, said: “SMEs should possess a real competitive advantage when it comes to employee engagement and should focus on competing directly with larger organisations on these terms. This research shows that the prospect that SMEs often promote, of providing a healthy work-life balance and a flexible working environment, holds a strong appeal for employees. If these are actioned properly, employee commitment to the organisation will increase, improving retention rates and increasing business efficiency. The impact of employees ‘going to extra mile’ will be much more impactful pound-for-pound against their larger counterparts and can be achieved through better communication and collaboration.”