How SMEs can attract and retain the right talent
SMEs have to rethink their approach to attracting, retaining and managing talent as the workforce environment evolves rapidly. Find out which strategies and resources will allow them to attract and retain the right talent.
It’s no secret that small to medium enterprises (SMEs) require a pool of skilled talent to develop and execute innovative strategies for business growth. Yet, one of the biggest challenges SMEs face in Singapore is the limited pool of local, highly-skilled staff, many of whom prefer to work with multinational companies (MNCs).
The “Great Resignation” has hit close to home and is set to continue. Nearly half of Singapore SMEs (49%) surveyed say they aren’t finding it easy to deal with the “Great Resignation,” with 62% of Singapore SMEs revealing that more staff are resigning now compared to 2021.
Another survey of workers across the Asia-Pacific reveals that 1 in 5 employees intend to switch to a new employer within the year.
“And because companies might have shrunk in size as a survival response to the pandemic, rehiring now is a real issue,” explains Irvin Seah, Senior Economist at DBS Bank. “It is not so easy to get the necessary headcount to operate at pre-pandemic capacity—manpower shortages will inhibit their operations and expansion plans.”
Global talent shortages reach a 16-year high as 3 in 4 employers report difficulty finding the talent they need with the right blend of technical and soft skills. Many Singapore SMEs (65%) now find it difficult to hire or find replacements, with 52% of Singapore SMEs seeing few or no qualified applicants when they try to hire.
This rapidly evolving workforce environment encourages SMEs to rethink their approach to attracting, retaining, and managing talent. Despite challenges, help is always at hand. SMEs can tap into the following strategies and resources to help them attract and retain the right talent.
1. Make culture a talent attraction strategy.
Culture is unique to an organisation. It must be defined alongside the company’s purpose, mission, vision, values, and employer branding. As culture can often feel vague, SMEs must clearly define their culture and make it felt among internal and external stakeholders, including job applicants.
A strong company culture wins the best talent for two reasons. For one, it fosters employees who become brand ambassadors. Employees with a solid connection to culture have higher levels of engagement and will speak highly of the company as a great place to work.
Second, talented people want to work for organisations with strong cultures. They want a workplace with a purpose, mission, and values that resonate with their own. They also want a company to invest in honing their skills and developing their careers.
For Susan Cheong, Managing Director and Head of Talent Acquisition and Talent Management at DBS Bank, building a culture of diversity and inclusion gives organisations access to talent with varied and valuable skills, experiences, and perspectives.
“Embracing diversity and inclusion is important as it enables you to attract the best people, build the best teams, and produce the best work,” explains Cheong. “By building a culture of inclusion, you can harness the power of a diverse workforce to succeed in this complex, interconnected world and create impactful outcomes for businesses, customers, and communities.”
2. Tap into temporary or contract hires.
Companies turn to a contingent workforce to help manage workloads when experiencing headcount shortages. Contingent workers are not on the company payroll but provide services to the organisation. This group of workers may include contractors, consultants, advisors, and temporary or contract hires. In Singapore, 60% of companies surveyed have already adopted a contingent workforce, hiring temporary or contract employees.
There are many benefits to having a contingent workforce. For one, it offers flexibility for workforce planning, making it easier for SMEs to upsize or downsize as needed. In Singapore, 66% of companies surveyed turn to a contingent workforce to fill specialised roles to ensure business continuity. Having a contingent workforce also ensures the availability of talent with specific skills on a short-term or a per-project basis, giving ample time for evaluation before hiring them permanently.
To attract top talent for your contingent workforce, reward them the same way as full-time employees. In Singapore, 35% of companies surveyed offer the same rewards to contingent workers to attract top talent for critical service delivery, thereby preventing project delays or any risk of hindering company growth.6 Pay your contingent workforce on time with ease with DBS GIRO Payroll, a secure and cost-effective way to process large volumes of payments.
3. Provide flexible work arrangements.
Providing flexible work arrangements (40%) and allowing remote work (31%) are among the most-used HR strategies by Singapore SMEs to encourage employees to stay.1 Evidence also suggests a statistically significant relationship between flexibility and attrition—more flexible organisations have significantly less attrition over the past 12 months.
In Southeast Asia, flexibility is a bigger retention driver (66%) than a four-day workweek (50%). In Singapore, the trend continues, as 64% of employees surveyed prefer flexibility over a four-day workweek (36%). Across the Asia-Pacific, two-thirds of employees surveyed who can work remotely prefer hybrid work.
But flexibility works both ways: SMEs must be careful not to overlook employees who work fully remotely or fully on-site, as preferences vary. “The engagement is just different when you are not able to gel together on a face-to-face basis, so that cannot be underestimated,” explains Cheong. “But the more important question is, do you give your people preferences? Only then can the structure come into play.”
Employees in Southeast Asia differ in how they define flexibility. For some, flexibility is about controlling the hours they want to work (33%), or working from any location (24%). For others, it is about choosing the days they work (19%), or being evaluated based on work performance instead of work hours (18%).
As employees have different expectations of flexible work arrangements, a one-size-fits-all approach will not work. SMEs are encouraged to give their employees a considerable choice regarding where they work (i.e., in the office, from home, remotely, or on a hybrid basis) and when they work (i.e., fewer hours, more flexible hours, or fewer overtime hours).
4. Improve financial incentives and healthcare benefits.
Improving financial incentives (29%) and providing healthcare benefits (29%) are among the most-used HR strategies by Singapore SMEs to encourage employees to stay.
The COVID-19 pandemic took a toll on employees' physical and mental health worldwide. Supporting employee well-being has become a priority among companies, and ranks third among the most popular strategies to address manpower shortages in the Asia-Pacific. However, adoption leaves much to be desired—only 36% of employees surveyed say their employer supports their physical and mental well-being.
As such, SMEs can attract and retain the right talent by supporting employee well-being through improved financial incentives and healthcare benefits. DBS offers comprehensive and affordable health solutions for near-term and future needs. Safeguard the health and wellness of your employees so you can focus on sustainable long-term growth.
To protect her employees amid the COVID-19 pandemic, Ms Summer Lee, founder of The Tattletale Agency, availed of the DBS Workplace Wellness Programme and SME Package Policy. “It’s important my employees know they matter, and they are the key to growing the business together,” shares Lee. “I want them to feel cared for, so I ensured their medical and wellness needs are fully covered.”
5. Provide upskilling and career progression opportunities.
Companies are also filling the talent gap through training and upskilling, which helps strengthen skills to cope with evolving demands. In Singapore, 56% of companies surveyed employ this strategy to address talent gaps.
“Recognise the need to reskill and upskill your manpower,” shares Seah. “The overall business landscape has changed, and upskilling your manpower is one of the ways to cope with this disruption.”
Evidence suggests there is significant room for improvement around upskilling. Less than half (45%) of employees surveyed in the Asia-Pacific say their company is upskilling its workers, with 42% expressing worries their employer will not teach them the technical skills they need. Rather than seeing upskilling as a short-term fix to address immediate skills gaps, SMEs must view upskilling as a strategy to develop a competitive workforce.
To help SMEs upskill their employees, DBS BusinessClass partnered with SkillsFuture Singapore to curate SME Academy. Its curriculum provides in-depth foundational classes for SMEs, assisting businesses to scale up and remain relevant amid disruptive times. It also includes plenty of networking opportunities so you and your employees can connect with like-minded individuals and leading industry experts.
If your employees prefer to learn from home, they can still upskill via the DBS BusinessClass Online SME Academy. Don’t let these bite-sized online classes fool you—they are packed with actionable insights from subject-matter experts and industry practitioners.
Through Online SME Academy, Mr Terry Peh and his team at Good Dog People, an online pet supplies store, picked up new digital marketing and branding skills, all from the comfort and safety of their homes.“Since we are an e-commerce business, we’re always trying to improve our user experience and create more engaging content. I was glad that DBS had a wide range of solutions to help us upskill our digital capabilities,” shares Peh.
To further future-proof their workforce, SMEs can enrol their employees in the DBS SME Skills Booster Programme, a newly established partnership between DBS BusinessClass and SkillsFuture Singapore. Through the programme, SME employees can hone their skills and capabilities in areas such as digital and transformation, sustainability, banking and finance, and cyber wellness. Additionally, the programme provides SMEs with training needs analysis, learning and development advisory and services and easy access to accredited training programmes. This way, SMEs can better understand their skills gap and manage their human capital.
“No one knows for sure what the future will bring. But if we can stay agile, embrace innovation, upskill and even reskill when necessary, I think we’ll be ready to seize any opportunity that comes our way,” adds Peh.
At DBS, we know how important it is for SMEs to attract and retain the right talent. Through our range of digital solutions, we help you train for uncertain times and upskill for the future.
 PWC, What nearly 18,000 workers across Asia Pacific think about work today. Asia Pacific Workforce Hopes and Fears Survey 2022: Time for a rethink? August 2022.
 ManpowerGroup, The 2022 Global Talent Shortage, July 2022.
 Gallup, Culture Wins by Attracting the Top 20% of Candidates, June 2018.
 Deloitte, Global Business Driven HR Transformation: The Journey Continues, 2022.
 HumanResourcesOnline, The contingent workforce in Asia Pacific: 2022 trends and insights HR must know, April 2022.
 HRM Asia, Flexible working shaping the future of work in ASEAN, May 2022.
 HumanResourcesOnline, Workers in Malaysia and Singapore prefer flexible work arrangements over shorter workweek, June 2022.