HR & Management

How SMEs can recruit Gen Z talent using low-cost methods

13 min read

20 November 2018

Features Editor, Real Business

SMEs are hiring more people than ever before, but how will they convince the next Gen Z generation to join them?

L’Angleterre est une nation de boutiquiers – Napolean Bonaparte spoke those words during the late eighteenth century. But do you remember what the short-on-stature French military man was talking about?

He was talking about the British business ecosystem, commenting, with some relish, that we, the British, were “a nation of shopkeepers”. At the time, this was intended as an insult.

But who’s having the last laugh here? Well, it’s certainly not the deceased dictator. These days, the UK business economy is underpinned by the strength and endurance of small and medium enterprises (including those pesky shopkeepers Napolean was referencing.)

Whilst SMEs are smaller in size than their corporate counterparts, they carry more economic clout in the British business world in terms of employment and combined turnover levels.

This is backed up by statistics compiled by the Federation of Small Businesses. Where in 2017, those employed by SMEs made up a whopping 60% of all private sector employment in the UK and provided a combined annual turnover of £1.9 trillion. This meant that British SMEs accounted for over half of all private sector turnover in the UK.

Breaking this down into numbers provided by a ‘House of Commons’ briefing paper from last year, there were 5.7 million businesses in the UK, and over 99% of these businesses were SMEs. SME employment numbers were similarly impressive and stood at an estimated 16.1 million people, a number that’s increased by 3% since 2016.

So what do all these statistics mean for SMEs looking to attract first-time employees today?

The latest stats: SME employment levels and interest

According to research released this week by Santander bank, small and mid-sized businesses have hired three times more people than larger businesses over the past five years. Additionally to this, SMEs continue to be the main driver of soaring UK employment levels, and could well overtake large companies by 2030.

However, there’s a disconnect here, as according to the research, only a third (35%) of Generation Z and young Millennials leaving full-time education say they want to work for an SME…

But SMEs carry strong employment prospects for graduates?

Well, it means just that. Statistics show that in terms of combined turnover and employment levels, SMEs are going from strength to strength, and look set to take over from larger businesses in terms of employment domination in the UK.

But what does the next generation of people entering the job market want from their future companies? And how can SMEs cater to their needs and recruit them?

Because if SMEs fail to tap into the desires of this generation, they could lose out and lose their command over the employment economy in the process…

Who are Gen Z? And can SMEs cope with their demands?

A survey undertaken by Prospects, a UK graduate careers organisation, asked over 9,000 students about their work intentions over the next 12 months, 37% said they wanted to work for an SME, whilst only 29% said they wanted to start their first job with a larger employer.

But before SMEs crack open the champagne and celebrate their inevitable recruitment success, they need to overcome a few hurdles first.

The new generation of school and university leavers soon to be entering the job market are Generation Z.

Born after 1997, SMEs need to make sure they understand what Gen Z graduates are looking for in a company. This commonly includes their desire for a supportive company culture.

However, their unique experiences and demands (that will be explored later) mean that SMEs have to work a little harder to recruit Gen Zs. However, SMEs can make use of their smaller sizes that give them the flexibility to be able to change their internal processes to attract them.

SMEs have unique characteristics that make them attractive to employees

Firstly, it’s easier for smaller companies to change their internal processes than it is for bigger corporates. This means that with less time and effort, they can make themselves more relevant, and more attractive to Gen Zs, who will soon be flooding the job market.

And luckily, the most popular demands for Gen Zs in the workplace revolve around establishing open communications and a wellbeing culture, and these are aspects that are not as costly to the company purse strings as you might initially think.

SMEs can capitalise on their smaller sizes, and closer intimacy between managers and junior staff to foster an open, more informal and warmer work culture, and that’s something that appeals greatly to Gen Z employees. Let’s find out how they can do it:

HR on a shoestring: How to make your business appeal to Gen Zs today

To appeal to this fresh, and soon-to-be-graduated generation, SMEs need to understand what makes them tick, and what they value in a company. This often goes beyond the role they’ll be undertaking as an employee.

Whilst there are cross-overs between what millennials look for in a job role and what Gen Zs demand, there are some key differences to be aware of. Let’s look at what low-cost aspects businesses can work on to make themselves more attractive to Gen Z talent:

Make clear what extras you offer

Gen Z were born between 1995-2004, and they have witnessed some major financial events in the UK, including the worldwide recession and the rise of university fees.

As this generation is entering the job market with higher levels of student debt, chances are they’ll be looking for competitively paid jobs that offer additional extras. In other words, they want ‘more bang for their buck’.

These ‘extras’ can vary from healthcare cover (for businesses with a little more dollar to spend) to discounts on gym memberships and lower-cost perks such as monthly work drinks and free lunches on a Friday. Depending on your company budget, your team can work out what additional incentives you are able to offer, and, most importantly, how to make these perks clear when you advertise the job roles.

Make your employee benefits digital

As this generation has grown up with the internet, ensure your employee incentive schemes are easily accessible via desktop and especially remote devices such as mobiles.

At a time when there is an ever-increasing importance placed on employee wellbeing and a work-life balance, make sure your business communicates your wellbeing schemes in a clear way that fosters engagement.

For Gen Z employees, this will be through a portal system that’s easily accessible through their mobile devices whilst they’re on-the-go to and from work.

Whether they’re checking in to see what discounts on cinema tickets they’ve got, or how many miles they have cycled to work that week, make this process as digitally savvy as Gen Zs themselves.

Make health a priority 

For smaller businesses that do not have the financial facilities to provide healthcare cover, at least try and offer counselling services at work. However, if this is an expense too far, simply cultivating a culture of openness and consideration when it comes to employee mental health and personal issues will make for an attractive work environment for Gen Zs.

It’s important to remember that Gen Zs are generally more engaged with their collective mental health. So, the communication of these policies have to start at management level, and be communicated as a company policy in recruitment drives, during interview stages, when onboarding new staff, and throughout the employee experience.

This will ensure Gen Z employees know you are taking these considerations seriously and are embedding these values into the fabric of your business.

Ensure these ‘perks’ are continuous 

Gen Zs are discerning and even cynical at times, so make sure you leave no room for them to accuse you of being ‘just another cold company getting candidates through the door with false promises’.

To ensure this doesn’t happen, make sure your HR team, or in absence of an HR team, your senior staff, or even you as the founder, dedicate the time to crafting a long-term employee wellness policy.

This can incorporate the ‘perks’ discussed earlier such as organising regular events including team-bonding days, post-work drinks and even fitness activities.

The short-term expenses and time taken to planning these events will offer pay-offs in terms of securing a benevolent reputation as an employer as well as boosting the wellbeing and productivity of your current workforce.

All this encourages the cultivation of a happier workplace, which means graduates are more likely to stay on after they’ve got their ‘first year of work’ under their belts.

Gen Zs love communication

Circulate wellbeing programmes and other ‘fun’ activities and related news via internal newsletters and informal email ‘shout-outs’. This will forge a sense of community within your business and should reassure your Gen Z graduates that ‘the perk life’ wasn’t simply a short-term trick to attract them to the company.

Make their employee experience ‘personal’

This includes making clear that you care about their professional development. Make this point obvious right from the moment you post the job role online, and remind candidates that this is a company priority during the interview stage.

Act as professional parents (but not in a micro-managing way), make it clear that you want to foster their nurturing and growth as a professional and want them to grow within your company.

This should also encourage their loyalty to the company, as they will feel more valued. Remember that this generation is more sensitive and in tune with their feelings both at home and in the world of work, so ensure you’re just as sensitive in your approach to their development as an employee of yours.

Conclusion: Why should SMEs bother?

We must remember that employee culture changes as quickly as the business landscape does. Instead of seeing the need to make these internal changes as part of appeasing the ‘demanding’ ‘snowflake generation’, we should instead see it as part of a business evolution.

– If making these changes will help SMEs employ even MORE people in the future, and will help them to continue to take the reigns of economic domination away from big corporates, what’s not to like?