Australia’s small-to-medium sized businesses really are the engine room of the economy – in fact, they’re now said to be contributing as much as 57% of the country’s GDP. What’s more, official ABS statistics found 70% of the nation’s employing businesses in 2017 were small, with only 1-4 employees.
However, despite the deserved optimism around Australia’s very healthy small business sector, these are businesses that face uniquely “small business” challenges when it comes to recruiting and retaining the best talent. That’s because, unlike larger organisations that benefit from economies of scale, they don’t always have the cash to offer employees the most competitive salaries.
A recent Indeed study shows lack of budget is the most common reason why Australian employees fail to secure a pay rise (47%). Meanwhile, only 23% say they were not awarded a pay rise because of a lack of quality work. This could be a problem when they’re operating in the same labour market as the bigger players.
Most Aussies are prepared to trade-in a pay rise for other benefits
So, here’s some great news. Our research also found there are plenty of other ways small businesses can differentiate themselves in front of prospective employees and reward their most highly-skilled workers, aside from offering large pay packets. As many as three-quarters (75%) of employees say they would consider other benefits instead of a pay rise.
The top benefits employees would consider are more annual leave (44%), flexible work hours (41%), healthcare benefits (28.5%), and paid parental leave (11%). This demonstrates employees today value the overall quality of their working life, which sees them recognised and rewarded for their efforts while enjoying a better work-life balance.
As a nation, we’re falling behind when it comes to the issue of work-life balance. While Aussies are on average working less hours than previously, we still ranked 27th out of 35 OECD countries in a recent study by the Australian Institute of Health and Welfare that looked into the issue. An employer who understands what employees really value and who finds ways to help them live their lives better could easily win the top talent over competitors who simply pay more.
Let’s take a closer look initiatives small businesses can implement to ensure they’re seriously considered alongside those larger companies offering big salaries.
Flexible working hours
Thanks to modern technology, such as the cloud and mobile devices, it’s never been easier to work from anywhere, at any time, and with anyone—in real time. As the centralised nine-to-five office routine becomes less relevant to achieving work objectives in some roles, this could be an opportunity for employers to consider how they can help their employees balance work commitments with personal commitments. After all, it’s about the quality of work done—not necessarily the hours spent in the office.
Not only will employees feel less stressed and more able to organise their family life as result of flexible working patterns, but they’ll be happier and more productive too. While it might not be suitable for every organisation, some of Australia’s most prominent employers, including Qantas, Telstra, ANZ, and the ASX offer flexible working policies. Chief Executive of PepsiCo Australia and New Zealand Robbert Rietbroek has been championing family-friendly, flexible work policies since joining the company in 2015.
More annual leave
It’s essential for employers to actively promote a healthy work-life balance. This is because, in today’s always-connected environment, employees are wise to the fact that there could be no end to the amount of hours you can put into a role—all coming at the expense of their personal lives. Some employers expect staff to be accessible on call, and likewise some employees fall into the trap of making themselves available at all hours because they feel obliged. It’s estimated that about $116 billion worth of labour time each year in Australia is uncompensated. That’s simply no good for mental and physical wellbeing, motivation, and all-round productivity.
Businesses can encourage a superior work-life balance among the workforce by offering more than the statutory annual leave entitlements. That way, employees can avoid burnout by taking time out for other activities before returning to work refreshed and energised. In fact, for this very reason, Virgin Group, eHarmony (and Indeed) among others, offer their employees open PTO (paid time off).
In fact, Indeed’s SVP of Human Resources, Paul Woolfe, describes this as simply treating people like adults, putting the onus on workers to make the right call about balancing workloads and leisure time. Such initiatives could lead to better time management and greater productivity among individuals. Reports have revealed employees who believe they have a good work-life balance actually work 21% harder than those who don’t.
Paid parental leave
How an employer supports and caters for the needs of new families could have a huge bearing on amount of quality candidates interested in working for a business.
This means it could be time to think outside the box and consider offering more than the statutory 18 weeks paid parental leave—just like Netflix. The streaming giant has trialled offering employees up to 12 months paid parental leave, recognising the value parents place on spending quality time with their children. While not every employer can offer such a generous scheme, Westpac (who were the first publicly listed company to offer paid maternity leave 22 years ago) have seen the benefits of introducing it.
In 1995, only 35 per cent of female workers were returning to work after having a child. Today that figure stands at almost 96 per cent. Westpac estimate that it costs up to 2.5 times a woman’s salary to replace her if she leaves, due to the cost of recruitment, retraining and inducting people into the business. Costs can be higher still if the role is a specialist one that’s difficult to fill. Keeping that experience and knowledge base in the business is a powerful argument for expanding paid parental leave entitlements.
Employees have become increasingly conscious of the damaging effects of a modern lifestyle – particularly those who work in sedentary jobs. Consequently, employers who support their staff to maintain general health and wellbeing are well received – whether that be through gym memberships, regular health checks, or subsidised health insurance policies. Studies suggest health and wellbeing programs are linked to increasing employee satisfaction, staff retention, and engagement.
Of course, while all these perks cost money, offering one or two could make for a good return on investment when the bottom line is tight. Especially when they’re often more highly valued by employees than the cash itself. And remember, helping employees to achieve a healthy balance between work and their personal lives can mean less time lost to illness and happier staff overall—a win for both sides.
Methodology: This survey was conducted by Censuswide on behalf of Indeed and surveyed 1,006 currently employed Australians in December 2017.