Why SMEs Should Never Discount Employee Engagement

Employee engagement is a concept that works wonders in any organisation regardless of its size. 

Every nation has its own set of criteria in defining SMEs. The EU states that any company with 250 or fewer employees with an annual turnover of up to EURO 50 million is deemed an SME. While in Singapore, SMEs are establishments with 200 or fewer workers, with an annual turnover of no more than $100 million. 

Despite various definitions of SMEs, these companies are facing similar issues when it comes down to keeping their employees engaged. 

SMEs account for 99% of domestic companies and drive 50% of Singapore’s GDP. According to research by enterprise resource planning company Synergix Technologies, SME employs 10 staff on average and creates jobs for about 65% of all workers.

Traditional SME (small and medium enterprise) leaders may overlook the power of employee engagement since everyone and anyone at the workplace feels like family. However, familiarity should not be confused with effective engagement. 

Unfortunately, although SMEs play a crucial role in sustaining the nation’s economy, most employee engagement strategies tend to focus on the dynamics involved in bigger corporations that make up the ultra minority (the remaining 1% of all businesses.) 

However, the lingering problems in SME employment trends around the world such as high staff turnover rates should prompt an evaluation of employee engagement as a solution. 

Multiple studies have proven that an engaged workforce leads to a significant increase in productivity and worker retention. 

Hence, employee engagement is a powerful aspect of organisations that should not be overlooked, especially in smaller establishments that require all the support they need for growth and development,  

Some SME leaders may believe that employee engagement isn’t a priority due to the small scale of their HR. But this might prove detrimental to overall staff morale and organisational advancements. Here are some reasons why SMEs should never discount employee engagement.

The Challenges of SMEs

Poor Branding

SMEs face a separate set of issues from larger, well-established enterprises. For starters, hires may not wish to affiliate themselves with poor company branding. On the other hand, working for a worldwide conglomerate instills pride and belonging from the first day of employment. Employers are likely to have a sense of privilege by being associated with a company synonymous with prestige and success. 

Alternatively, employees might enter an SME with the mindset of leveraging onto a bigger company. As such, workers are likely to limit themselves to a short-term role right from the start. This results in an actively disengaged workforce that proves problematic for the SME in the long-run.

Solution: While it is impractical for smaller companies to match up with the rich history of a 100-year old enterprise, SMEs can focus on the uniqueness of their work culture, which makes them stand out from among the crowd. Engaged workers need to find a reason to build a connection with their workplace – if it isn’t from time-honoured reputation, it has to come from somewhere else. 

For example, London-based healthy snacks supplier LioBites promotes a dynamic work culture that reflects the business’ core values of maintaining a healthy and balanced lifestyle. The SME’s colour schemes are vibrant and fun, while employees are encouraged to embrace a proactive and flexible work schedule. Workers may choose to work full days or half days according to the immediate scope of their tasks. 

Similarly, Aspect IT, an IT Support SME goes the extra mile in managing staff welfare by employing the monthly services of a yoga instructor who provides stress relief lessons. The Company reports that productivity levels had improved by 12% just six months after the launch of the initiative. 

Fewer Development Opportunities

Some SMEs may lack the resources to provide effective training and development for their employees. This may be a problem in terms of employee engagement. According to the U.K. L&D Research Survey in 2018, 94% of participants shared that learning and development were critical to their success.  

Modern employees are constantly looking for jobs that provide self-growth and development. SMEs may find themselves ill-equipped (lacking the funds and trainers) at providing employers with the growth opportunities they seek. 

Solution: The costs of training are often fixed values. However, the structure of employee training and development programs should be flexible. 

It is unlikely for any management rule book to state that employees must be overloaded with information to achieve noticeable improvements. In other words, training and development may be costly but SME leaders have the freedom to plan how they’d like to invest in the most effective L&D approach. 

Ultimately, success does not lie on how much a company spends on L&D but the type of strategy involved in delivering those lessons. 

Micro-learning is one effective training technique that dispenses small volumes of information delivered at rapid speed. The method enables employees to retain information via small summarised lessons as compared to lengthy training seminars. 

Over 58% of respondents in a survey by Software Advice, a learning management system company, shared that they were more willing to use their company’s learning tools if they were broken up into smaller and more accessible lessons. 

Hence, SMEs can still create a highly stimulating work environment for their workers despite resource limitations by prioritising key needs and delivery methods. 

The Benefits of SMEs

Additionally, SME leaders should turn their attention to one major advantage of smaller companies – their “compact workforce”. It simplifies the entire employee engagement process by making it easier for management to recognise the unique strengths and needs of each employee and providing the ideal conditions for them to go above and beyond in their contributions. 

No employee enjoys being a faceless unit of work. An SME sets the perfect stage for every worker to express their unique selves in ways that are difficult or impossible within a colossal enterprise. SME leaders should leverage on this notion to foster a positive environment where every voice is given a chance to be heard and empowered. 

Singaporean SME initiative, NTUC U SME recommends a positive landscape with its four pillars of employee engagement: protection, progression, placement, and privileges

This essentially translates to a small but effective workplace where employees can learn, grow, and stay while under the care and guidance of responsible and visionary leaders – the hidden potential of every SME. And that is why SMEs should never discount employee engagement.


StrengthsAsia has helped many individual and corporate clients all throughout the region in empowering leaders by enabling breakthrough experiences for both leaders and followers. If you want to learn more about the Strengths Leadership Program, feel free to reach out to us here.

A devotee at the altar of language and a celebrant of expression. Laurenzo has written for various SMEs, MNCs, startups and international brands over the last three years. He specializes in topics of psychology, lifestyle, employee management, and digital trends.

Aly is StrengthsAsia’s marketing and communications guru and lead editor. She's over the top inquisitive and everyone in the company knows her as “The Googler” as she practically googles everything. Honestly, we all worry for her… She is also the Principal Trainer for our one of a kind ice cream team building workshops in Asia.

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