Employee Engagement in SMEs - Aon Hewitt

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Employee Engagement in SMEs - Aon Hewitt

  1. 1. Understanding the employee engagement drivers in the UK SMEsSmall and medium-sized enterprises (SMEs) are crucial to the UK economy but have been some ofthe hardest hit by the current economic climate and the fierce competition for talent. However, despitethe challenging environment, some of these organisations are thriving.Employee engagement goes beyond perception – it measures what it takes to make the companysuccessful. Engaged employees want to and actually strive to improve business results. While in thepast organisations may have debated the importance of employee engagement, today the power ofan engaged workforce is well understood and a sought after asset. More than ever, employeeengagement matters.Aon Hewitt’s employee engagement modelAon Hewitt’s employee engagement construct measures three vital behaviours that employeesdisplay if they are engaged – Say / Stay / Strive. Furthermore, by understanding what drivesengagement and the relative impact each factor has on the current engagement level (improving orlowering), organisations can then plan how to best allocate resources to motivate talent.So how are UK SMEs faring?Aon Hewitt analysis into employee engagement levels of UK-based employees working in SMEs(including UK arms of multi-national companies) shows that 50% of employees are engaged, meaningthat just one in two employees want to and actually strive to improve business results. This must because for concern for organisations who are reliant on these employees to help them navigatethrough the challenges presented by the current economic climate.The engagement score for these organisations is not materially different from the UK market overallwhere 47% of employees are engaged, challenging the perception that it is easier to engage peoplewho work in smaller organisations, and indicating that SMEs are also struggling to manage theemployee engagement agenda.  
  2. 2. More important than just measuring the levels of employee engagement, is identifying the drivers ofengagement. These are the levers that organisations can directly act on to improve levels ofengagement. Aon Hewitt’s research indicates that there are four key drivers of employee engagementin smaller organisations:1. SMEs need to demonstrate to employees that promises are being delivered. As one of the top drivers of employee engagement in SMEs, this is also increasingly important compared to earlier stages of the current economic slowdown. Having committed themselves to these smaller organisations, where resources are likely to be more limited than in larger organisations, employees are showing fatigue and are looking on their organisations to deliver on promises.2. The role of line managers is critical to employee engagement, as it is in larger companies. While satisfaction with the support received from line managers is similar to the UK market average with approximately 60% of employees in both groups believing that they receive the support they need from their line manager, employees in SMEs are less likely to state that their manager manages issues of poor performance than in the UK market overall (44% vs 53%).3. Availability of career opportunities continues to be an important driver of employee engagement in SMEs, and is traditionally one of the areas where these organisations outperform the UK overall benchmark. However, this is one of the areas where satisfaction scores in SMEs have decreased most since 2010 with less than 40% of employees now stating that their managers provide sufficient guidance on career opportunities.4. Employees in SMEs are increasingly looking to leaders to provide direction on company goals and change events. The proportion of employees in SMEs who are satisfied with senior leadership and the communications received from leadership, is surprisingly similar to the wider UK market overall (approximately 45% for both groups), yet leaders in these organisations should be more visible and accessible to employees than in larger organisations. More is required of leaders in the SMEs to connect employees with the goals and challenges in their organisations.What are the implications for SMEs in the UKDespite some differences, the challenges faced by SMEs are similar to the UK market overall.However, this research raises some questions about how SMEs should respond. Why are issues ofpoor performance not being effectively managed? Do managers lack the support or understanding ofhow to deal with such issues? What promises are not being delivered? How can leaders betterconnect employees with the vision and goals of their organisations?Given the increasingly important role that leaders play in engagement levels in these organisations,the leaders in SMEs need to set clear expectations for managers and employees, role modellingbehaviours in relation to performance management and ensuring that managers are empowered andhave access to the training and support networks to ensure that employees are being managedeffectively.Jake Outram | +44 (0) 20 7086 9234 | jake.outram@aonhewitt.comLaura Heathcock | +44 (0) 20 7086 9598 | laura.heathcock@aonhewitt.comAon Hewitt strongly advises that organisations must identify and prioritise their own engagement drivers, rather than relyingsolely on practices in the external market.About Aon HewittAon Hewitt is the global leader in human resource consulting and outsourcing solutions.The company partners with organisations to solve their most complex benefits, talent and related financial challenges, andimprove business performance. Aon Hewitt designs, implements, communicates and administers a wide range of humancapital, retirement, investment management, healthcare, compensation and talent management strategies.With more than 29,000 professionals in 90 countries, Aon Hewitt makes the world a better place to work for clients and theiremployees. For more information on Aon Hewitt, please visit www.aonhewitt.com.  

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