With Ireland at full employment and roles getting harder to fill, John Cradden outlines ways SME employers can hold onto existing talent.
It’s almost an old saying these days in the recruitment sector: it’s far easier and cheaper to keep top talent than to find it in the first place.
While any company with a growth strategy will need to recruit, keeping your existing top talent engaged and productive will ultimately do more to keep your strategy on track.
“Given the greater responsibilities and significance of each employee at a smaller firm, it’s not hard to see how higher turnover rates can have a more damaging impact on a company’s ability to succeed”
It’s likely you’ve heard the reasons why focusing on retention is just as important as recruitment, but some of them are worth reiterating:
- It minimises the costs of hiring and training new people
- Existing employees adapt faster to change and have valuable institutional knowledge
- Long-term employees have stronger ties to the company and are less likely to hit moral and stability by leaving
- More likely to contribute to the bottom line through strong relationships with customers and promoting a stronger employer brand
Tight labour market
For SMEs, of course, talent retention comes with a few extra challenges in 2025, including lower unemployment, tighter labour markets, and fewer of the HR resources enjoyed by bigger firms that are needed to develop retention strategies.
Add to that rising costs in the form of recruitment expenses, payroll increases and the cost of living, all factors that are foremost in many minds, according to a recent Peninsula Ireland survey of SMEs.
Given the greater responsibilities and significance of each employee at a smaller firm, it’s not hard to see how higher turnover rates can have a more damaging impact on a company’s ability to succeed and grow in the long-term.
So when it comes to retaining your valued employees, what steps are working and what steps aren’t so effective?
Pay right
Pay will always be important, but research suggests 80% of employees who are persuaded against leaving the company by an offer to raise their salary still leave within six months.
In other words, it takes far more than just a competitive salary to keep good people.
In a nutshell, building a positive company culture and providing flexibility can make all the difference.
Offer flexibility
Starting with flexibility, offering hybrid or remote working as a core measure to achieve work-life balance will allow staff to balance personal responsibilities with professional ones and increase job satisfaction.
Allowing employees personal time off or to undertake voluntary work will show that you care about their wellbeing and self-development. Similarly, supporting staff during big life events such as marriages, deaths, parenthood, elder care, or career shifts can help strengthen their loyalty.
Develop your people
In terms of company culture, providing opportunities for professional development and supporting them in seeking promotion are but two great ways to show employees that their company cares about their career and long-term future.
And there is definitely more room for improvement among SMEs in this regard.
A 2024 report by Skillnet Ireland shows that just 27% of SMEs have a talent development strategy versus 72% of large businesses (250+ employees) – although 21% of SMEs said they planned to create one over the next year.
Recognise commitment
The whole industry around employee financial rewards has grown massively, such as bonuses, cycle to work or TaxSaver commuter ticket schemes, and gift vouchers.
But so has the understanding that employees like to be recognised for their efforts and hard work. This could be as simple as praise expressed in any number of ways or regular positive feedback, but also non-financial rewards such as extra time off, career development plans and additional flexibility.
A major 2022 meta-analysis of academic studies by the Chartered Institute for Personnel and Development (CIPD) found that employee recognition and non-financial rewards tended to have largely positive effects on work performance. Its effect on retention, while not quite as big, was still positive.
One Irish company leading the way in terms of facilitating social recognition and rewards among employees is Workhuman, which operates employee reward and incentive schemes on behalf of some of the world’s biggest companies. It’s also been recognised itself as a top workplace by a number of media outlets as well as Ireland’s Great Place to Work Institute and recently opened a new innovation space on Dublin’s Dame Street.
Mitie Ireland, a facilities management company, has been acknowledged by IBEC as one of the top 100 companies in Ireland for Employee Wellbeing for two consecutive years and the only company in its sector to have received the Ibec KeepWell Mark, an accreditation that demonstrates commitment to employee health and wellbeing.
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