By Damon Anderson UK Managing Director, Employment Hero
Bringing on a new employee is no small feat for a small firm. The decision to make the hire in the first place can require serious justification and paperwork, let alone the actual onboarding process. It’s an essential and exciting part of growth – but not simple. Luckily it’s usually very rewarding.
But we’ve noticed a trend in some of our research and conversations with SMEs that is a bit troubling. A significant number of employees are joining small firms and then rapidly leaving for a better-paying job at a larger firm – with their experience at the smaller company a useful foot in the door for a role somewhere that might have a higher budget for salaries. We coined the term ‘salary springboarding’ to describe this situation.
A survey we conducted of SME leaders found that just under a fifth of new hires in white collar firms like finance and insurance were leaving within six months – meaning that a new insurance adjuster has a higher chance of leaving than a new barista. These are obviously roles where there are big firms always on the hunt for talent, with salary packages to match. 89% of the SME leaders we talked to struggled to match the salaries of larger firms. This kind of thing is obviously perfectly legal – but it does leave a sour taste in the mouth of SMEs.
So how to combat it?
The first method is in the interview process. Try to ask probing questions about why they are leaving their current role and delve deep into their time at other firms. If they seem to have a pattern of always leaving other employers relatively quickly, ask them about that, and make clear that you see the role as a long term one.
For new employees, look out for signs that they might be hoping to leave quickly. A hesitancy to join or commit to longer term projects is a telltale sign. Another is a lack of attention to process or detail – if an employee wants to stay at your firm for a while they will probably want to learn how things are done within the company quickly. If they seem to be blase about that kind of training that could be a sign they are looking to leave quickly.
But these warning signs are useless if you don’t know how to address them.
To make sure employees feel valued enough to stay, you have to offer them real value. That means embracing what makes a smaller company more rewarding than a larger one. Smaller firms can typically let employees progress up the responsibility ladder fairly quickly – so make sure they know that if they perform well a new title and higher pay won’t have to wait for some arbitrary deadline, but could happen whenever you think they are ready. Emphasise the width of experience and flexibility to do things differently that a role at a smaller firm will offer, in comparison with the slower and more rigid processes somewhere larger.
And don’t be afraid to use “sticky” benefits to your advantage. A salary sacrifice scheme for a car or bike costs your company very little but makes quitting a job that much more difficult. Other benefits like insurance and gym memberships cost something but could be the difference between someone staying or going. And brand new digital benefits platforms make managing all this stuff far easier for everyone involved.
Ultimately, some employees are always going to move onto pastures that seem greener at the time. Sometimes this is legitimately because the job simply isn’t the right fit – and there’s no point trying to stop that. But if you do right by your employees ahead of that, you’re unlikely to see this happen very often.
