SMEs batten down the hatches to keep good staff onboard

Attracting new talent has become less of a priority for small to medium-sized enterprises, which have turned their attention towards retaining their existing staff.

The 2009 Employment Trends Report by recruitment and HR provider Randstad shows that while hiring expectations have slumped since last year, SMEs are doing their best to avoid having to lay off staff.

While in 2008 more than half (51%) of all SMEs in New Zealand were looking to increase their headcount the number dropped to only 24% this year.

However, the number of SMEs looking to reduce staff numbers increased only modestly from 2% last year to 9% in 2009.

The majority (67%) plan to maintain current employee numbers over the next 12 months.

“Despite these figures and the intense pressure on local SMEs to reduce costs to survive the economic crisis, it is encouraging to see that small to medium sized employers are not making rash decisions to cut their workforce,” Randstad chief executive Deb Loveridge said.

During such “unprecedented” economic times small to medium enterprises would come under increasing pressure to reduce costs, she said.

“The first instinct can be to cut staff numbers, but this can leave employers at a disadvantage when the economy improves, as they find themselves under-resourced and unable to quickly respond to an increase in demand.”

Keeping good staff has become more important than finding new ones for many SMEs – only 13% view talent attraction as their number one priority.

“This significant shift in outlook reflects the changes we are witnessing in the New Zealand economy,” Ms Loveridge said.

It suggests SMEs are focusing on “more pressing concerns, such as managing internal change, people and productivity and human capital costs, rather than attracting and retaining talent”.

The survey also found that 71% of SMEs offer part time/flexible hours and 45% of SME employers think Generation Y employees are the hardest to retain.

Two fifths (42%) of SME employees leave due to a lack of career opportunities and of those who choose to stay 53% say they do so because of the good cultural fit.

However, only 8% of SMEs track the moves of ex-employees in the hope they may return to their organisation.

And nearly half (49%) of SMEs think their employer brand needs improving.

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