The importance of talent acquisition and retention for SMEs
SME business owners face numerous challenges, not least when it comes to tackling organisational design (Org Design). Failing to address some of the key elements of Org Design can make it difficult to implement and sustain effective growth strategies.
At a glance
- SME’s are grappling with a significant labour and skills shortage, making it essential to develop effective strategies for attracting and retaining skilled employees
- A well-structured bonus scheme for senior management can significantly boost motivation and overall performance
- We outline five crucial tips for creating an effective bonus scheme for senior management teams.
Chloe Carey, HR Consultant at Elephants Child, explores the key challenge of Talent Acquisition and Retention facing business owners who are navigating Org Design as part of their growth and expansion plans. She outlines her thoughts below specifically around bonus schemes for senior managers.
One of the most pressing challenges facing our clients is attracting and retaining skilled and experienced employees. Almost all identify talent acquisition as one of their major concerns. We are seeing business leaders trying to build strong senior management teams (SMT) around them to address a skills gap, or perhaps to allow them to take a step back or step up to operate in a more strategic space.
What we do know at Elephant’s Child is that the UK is currently experiencing a significant labour and skills shortage, finding good people is difficult. Failing to address talent acquisition and retention strategies as the root cause leads to operational inefficiencies, increases in staff turnover and ultimately decreased productivity.
Activities such as planning the remuneration package for a role are essential when recruiting senior talent and the pre work involved in defining and structuring incentives and performance related pay should be factored into the early stages of your acquisition and retention process.
Elephants Child recently worked with a mid-sized architectural firm based in London with ambitious growth targets. They recognised that their existing bonus scheme was not effectively motivating all of their senior directors. The scheme lacked clear metrics and failed to align with the company’s strategic objectives.
Following our work, the implementation of the new bonus scheme has had an immediate positive impact. Senior directors feel more motivated and engaged. They know that their efforts in business development and sales are now being recognised and fairly rewarded. The company now also has the mechanisms in place to see any increase in new client acquisitions and overall sales performance.
Top tips for creating a bonus scheme for senior management
Here are 5 top tips to creating a bonus scheme for your senior management teams:
- Clear role expectations – Understand where the role adds value, and what it could mean to the bottom line if the person in the role reaches their true potential, scope that out and set some objectives around the delivery.
- KPI’s and reporting – Understand how you will measure whether the person doing the role is adding that value
- Make it pay – Benchmark the market rate for the role but also consider the value-add. Separate the value-add element and package that up as a bonus. A bonus linked to clear objectives and measured properly will pay for itself.
- Understand what really motivates the employee – Talk to them openly during the recruitment process about their needs, wants and ambitions to see if they align with yours. This approach builds loyalty and ultimately an ongoing relationship which should pay dividends for everyone.
- Longer term – If you want someone around for the longer term then it may be appropriate to consider the options for long term incentives such as Share Options or EMI schemes, giving key players some real motivation.
Ready to elevate your talent acquisition and retention strategies?
Contact us today to discover how we can help you build a robust leadership framework that drives growth and enhances productivity.
We work in conjunction with an extensive network of external growth advisers and SME specialists, such as Elephants Child, who have been carefully selected by St. James’s Place. The services provided by these specialists are separate and distinct to the services carried out by St. James’s Place and include advice on how to grow your business and prepare your business for sale.
Where opinions are given these are not necessarily shared by St. James’s Place.
SJP Approved 11/03/2025