Employees of SMEs are reportedly the most happy and satisfied in the UK.  According to the Trades Union Congress, one in four employees of larger firms feel debilitated by low morale.  However, for the small business workforce, satisfaction levels were significantly higher.

The survey questioned 2,500 employees from both larger businesses and SMEs.  YouGov discovered that 21% of staff strongly agreed they were satisfied with their employment role, with 41% tending to agree.  The study also revealed that 58% SME employees questioned were more likely to be loyal to their company, with 64% committed to their roles.

John Wright, national chairman of the Federation of Small Businesses said of the survey results: ‘In terms of the way they treat their staff, small businesses consistently out perform their bigger competitors. ‘Small business owners know their greatest asset is their staff and they are far more likely to treat them as individuals and recognise their needs.’

The level of satisfaction may be related to a number of factors.  The TUC reported that working weeks are now longer, making it increasingly difficult for employees to achieve a satisfactory work-life balance.  This is often reflected in their work performance.   Further, the greater the dissatisfaction felt by employees, the greater the probability of it impacting on their health.  Previous research has found a correlation between work satisfaction and rates of absence, and the associated cost is as much as £70 per day per employee – that equates to nearly £12 billion cost in absenteeism. 

Compounding the issue of job dissatisfaction is the current economic condition, risking performance levels from staff. This problem is more notable in larger firms, where line managers are responsible for managing absences.  Smaller businesses however retain a closer relationship to staff where managers are more aware of staff absence.  This means SMEs may well be better placed to address any areas of dissatisfaction and put measures in place to resolve them.  This direct relationship underpins company loyalty, and generates a culture of greater work performance.  Research has proven this with figures showing that small businesses employing less than 50 staff have a third fewer days lost to absenteeism, compared with larger firms.

It has been suggested that the larger firms could take a leaf out SMEs’ book in developing more personable relationships with staff to improve loyalty, output, and satisfaction.  According to Professor Cary Cooper of Lancaster University Management School, ‘This would be a wise investment given the potential substantial economic and psychological costs of unhappy or dissatisfied workers. Workers who are satisfied by their jobs are more likely to be healthier as well as happier. Employers should make changes after identifying aspects of the job causing the most stress and dissatisfaction.’

It therefore appears that SMEs practice of positive employee interaction improves job satisfaction, leveraging their competitive capabilities.

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