Increasing employer attractiveness in SMEs: Success strategies for dealing with talent

SMEs have always made a significant contribution to the success of the German economy. A significant proportion, namely 42 per cent of German SMEs, are active in the manufacturing industry - more than twice the international average. These companies are the backbone of the German economy - especially in a time characterised by volatility, uncertainty, complexity and ambiguity (VUCA). Above all, identifying the right talent in the right place is seen by global CEOs as one of the biggest challenges of the coming years. A study conducted by our US colleagues in 2024 revealed that 32 per cent see the combination of numerous employees retiring and a lack of qualified workers as a key influencing factor.

More than half of all employees in Germany work for a medium-sized company - often in a personal environment with flat hierarchies. Often, SMEs are family businesses with a corresponding management style. For these companies, it is now important to combine long-standing traditions and established values with modern work concepts in order to increase their attractiveness as an employer, retain their own talent in the long term, deploy it in a targeted manner and keep up with the competition for skilled and junior staff. This is because many skilled workers favour large corporations when choosing a job. They benefit from their strong brand awareness and can often score points with a variety of attractive offers. These include clearly defined career paths with numerous promotion opportunities, further training programmes and international deployment options.

An innovative employer offer means more than just working from home and flexible working hours - it is an attitude. It is about offering employees an environment in which they can fulfil their potential. They should feel part of a "big picture", which makes them willing to commit to their employer in the long term and make a difference through their work. The measures that companies should implement to achieve this and the extent to which this is already successful in practice are described below based on the specific experiences of a customer from the food industry:

1. People enablement: The desire among skilled workers for innovative and individualised further training opportunities is constantly increasing. Personal development programmes and further training are therefore decisive factors in retaining talent and deploying it efficiently and profitably. They should be an integral part of the corporate strategy, as a comprehensive learning approach is essential in order to empower employees in the best possible way. SMEs often have the advantage of flexibility and direct influence due to their flat hierarchies. You can create customised development offers to provide your employees with attractive further training. 

Customer experience: Our customer is already very advanced in this respect and emphasises the importance of training and development programmes being followed by action - what has been learned should also be put to good use. However, the company considers the emotional appeal to be most important. The bond with the product is the distinguishing feature for our customers. The employees work proudly on product creation and see themselves as an important part of product development thanks to flat hierarchies and good emotional ties. The market launch of new products is visibly celebrated within the company with stickers, posters and advertising campaigns.

2. Digitalisation and innovation: In the manufacturing industry in particular, there is great potential to make work processes more efficient through digitalisation and automation and to offer employees innovative ways of working. Medium-sized companies that focus on future technologies can significantly increase their attractiveness as an employer and thus also increase their competitiveness. 

Customer experience: Digitalisation and innovation is often a challenge because our customer does not yet have sufficiently well-integrated systems - a difficulty that other SMEs also report to us. This prevents the employee journey from being experienced by employees and efficiently implemented by managers. In some companies, there is still a complete lack of system support. Others have the necessary connection, but interfaces to other systems in particular are not sufficiently defined. Artificial intelligence is already in basic use, but a holistic perspective on the IT infrastructure is required.

3. Compensation and benefits: Attractive remuneration and benefits are crucial to attracting and retaining the right talent in the long term. A balanced package of salary and benefits shows employees that their work and contribution are valued. However, performance-based remuneration is also becoming increasingly popular. This can not only significantly increase employee satisfaction, but also promote loyalty to the company. 

Customer experience: Our client sees this topic as particularly challenging, as it is not economically possible to keep up with the big players in terms of remuneration. Our recommendation: Offset lower pay with attractive additional benefits, for example in the health sector.

4. Uniform and standardised processes: Standardised processes create clarity and efficiency in day-to-day work, reduce errors and increase productivity. Standardised processes not only offer a uniform way of working, but also promote cooperation and transparency between different teams and departments. The result: a more stable and reliable system that strengthens the organisation's performance and provides a solid foundation for business growth.

Customer experience: For our customer, this is reflected above all in the proximity and accessibility of the HR department. Employees appreciate the personal dialogue and the strong service ethos. Managers also rate the clear contact persons and roles as well as the short coordination channels as a key factor in increasing efficiency.

SMEs have the potential to be recognised not only as employers but also as innovators through targeted, future-oriented approaches and strategic measures. The combination of traditional values and modern working methods could prove to be a formula for success when it comes to not only attracting skilled workers and young talent, but also retaining them in the long term and deploying them efficiently - thus equipping the company for the future.

Feel free to contact us, we look forward to hearing from you.