Small firms on top for employee engagement

Small businesses are better at engaging employees than their larger counterparts because they offer incentives other than big pay packets, according to a new survey.

The Australian Institute of Management surveyed a total of 3,368 businesspeople about employee engagement, and found small businesses do it much better than their larger counterparts.

According to the survey, 65% of respondents from small businesses say they care about the future of their organisation, compared to 49% of those in large businesses.

Only 10% of people working with large organisations “strongly agree” they feel appreciated by their employers, compared to 26% of those in small organisations.

Thirty three per cent of survey participants said they are considering leaving their employer. Of that number, 50% are planning to leave in the next year.

Susan Heron, chief executive of AIM Victoria and Tasmania, says the survey reveals a high level of employee disengagement in the Australian workplace as a result of poor management.

The survey also reveals that one third of Australian managers admit they are underperforming at work.

“This shock finding reveals too many Australian organisations lack effective leadership and drive, and are delivering substandard outcomes to their customers and other key stakeholders,” Heron says.

“The flow-on negative impact of such underachievement is enormous when you take the big picture view of the Australian economy.”

Heron says big pay packets are not enough to retain employees, with the survey revealing that pay is ranked tenth on the list of factors keeping participants in their current jobs.

“In the survey, pay is ranked well behind ‘no career advancement’ as the key reason people are considering a move,” she says.

“Even for those people who are looking to leave their employer, pay is not the most important motivating factor.”

“Employers need to consider a wide range of engagement factors such as job satisfaction, good relationships with coworkers, new and interesting challenges, feeling valued, training and development, flexible work arrangements, as well as pay.”

Heron says the challenge for start-ups is to understand the skills it requires for success, and to devise strategy with regard to the recruitment and retention of staff.

“In any company it comes down to cash flow, but particularly in a start-up. You want your bottom line to be black and the only way you will get that is with good people,” she says.

“If smaller organisations get it wrong – [with regard to staff recruitment], it can be devastating because there is no room for margin.”

Heron says start-ups have an opportunity to negotiate with their staff regarding employee benefits and offer tailored packages.

According to the survey, the sectors providing the greatest career and employment opportunities are IT and communication services, consulting and professional services, finance and insurance, mining, and education and training.

Survey participants identified the top 10 employee benefits that organisations provide:

• Flexible working arrangements.
• Salary sacrifice.
• Mobile phones/laptops.
• Time in lieu.
• Bonus schemes.
• Training/study allowance.
• Work from home.
• Employee discounts on products and services.
• Free car parking.
• Novated leases.