How can SMEs improve staff morale, cost effectively?

Retaining and motivating skilled employees is repeatedly cited as one of the biggest issues facing small businesses. The key drivers of staff morale, can be categorised under 3 dependencies:

1. Remuneration;

2. Progression (i.e. availability of promotions, and training and/or upskilling opportunities); and

3. Non-monetary rewards (such as working conditions, corporate culture, quality of workplace, social influences etc).

Dependencies 1 and 2 typically have significant cost implications on the business and for most small businesses it is not possible to compete in monetary terms with the mammoth corporations. However, do not despair, one of the beneficial aspects of running a small business is that you typically don’t have the same level of bureaucracy as a big corporation and you should use this to your advantage. Here are a couple of easy and non-monetary changes you could introduce to celebrate your “small-ness”:

  1. Release some control & increase employee autonomy

Employee job satisfaction is strongly linked to the level of input and autonomy employees feel that they have over their role. Therefore, give them more control over daily tasks and avoid micro-managing to see them feel more empowered, confident and productive. You can use a project management tool, such as, to ensure projects remain on track and give you complete transparency over the process though.

  1. Facilitate communication

One of the best things about working for a small business is that employees feel more connected to the business strategy and usually the owners, compared to working for a faceless conglomerate where they can feel like a cog in a very large machine and struggle to value their own contribution. Utilise this to your advantage by keeping employees informed on your strategy and results. Also seek your employees input and ideas and capitalise on the knowledge already within your business. Consider introducing a private social media network such as Grapevine, to facilitate constructive communication.

  1. Offer flexible working arrangements

79% of people want to work from home at least part-time, and 36% say they would choose this perk over a pay raise, according to If work from home is not an option for your business (although arguably that is rarely true with appropriate infrastructure), then consider alternatives that might be more suitable, such as flexi-time or offering extra holiday days for big events (e.g. moving house, having a baby etc) to show employees that you value their work-life balance. These are low cost incentives which are shown to significantly improve overall job satisfaction. It could be something you offer to key employees or managers initially as a promotional perk associated with taking on more responsibility.

4. Improve your corporate culture

Make your business a fun and flexible place to work. Think dress down Fridays, social events, maybe even consider installing a TV for big sporting events (Olympics, World Cups etc), or order some beers/pizzas on Friday afternoons. It needn’t be every week but an occasional bit of fun allows you and your team to bond and create a productive, collaborative environment.

If your staff are happier coming to the office and feel they are offered some flexibility they tend to be less concerned with the bottom dollar and are willing to work harder for you.

Some of these non-monetary rewards can be introduced immediately at no cost whatsoever but in order to facilitate the others effectively (such as remote working, employee knowledge sharing and increasing employee autonomy) it will require appropriate systems and structure to be in place first. However, with a small amount of investment (approx £50 per month for a team of 5) there are tools, such as (see below) which are highly effective at improving morale and increasing employee productivity, engagement and thus retention. provides a simple solution via its Grapevine product which provides your business with a private social media network. This is a fun way to create a collaborative working environment and encourage every employee from the mailroom to the CEO to communicate and share ideas. It works in exactly the same way as Facebook but it is 100% secure and confidential, as it is private for your company. It therefore means you can use it freely and as a fully searchable knowledge archive for years to come. All data will be tagged, stored and categorised making it indispensable for everything from dealing with recurring issues, client pitches, driving strategy and more.

Furthermore, also offers a modular suite of other useful tools from CRM, project management (to aid the employee ownership point also), expenses, timesheets and lots more which you can pick and choose to suit your business. If you would like to know more about Grapevine or any other products please contact us with any queries at or by using the form below

Related:  Why should SMEs prioritise knowledge sharing?




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