As South Africa marks Workers’ Day on 1 May, many small and medium enterprises (SMEs) are facing increasing pressure to retain scarce skilled talent in the face of steep corporate salary competition. However, while bigger firms may have the upper hand when it comes to pay, benefits and perceived long-term job security, SMEs can win on experience, agility and autonomy.
This is according to Lawrance Ramotala, area manager at Business Partners Limited, who says while staff retention challenges are being intensified by broader economic pressures, SMEs need to focus on their employer value proposition (EVP). “Most SMEs cannot compete purely on remuneration due to budget constraints. The question is therefore not how to out-pay corporates, but how to build workplaces that people actually want to stay in.”
Ramotala notes that employee retention has become a strategic business issue with direct implications for productivity, service delivery and long-term sustainability. “When skilled employees leave, SMEs don’t just lose people; they lose customer relationships and operational continuity. The cost of repeated recruitment and onboarding can be particularly high for smaller businesses.”
To position themselves as competitive employers, he recommends leaning into non-monetary retention strategies that align closely with what today’s workers are seeking. “Corporates often have more brand credibility, but there can also be more red tape and internal politics. SMEs, on the other hand, are nimble enough to mould their culture to accommodate their top workers with perks like remote work and flexible hours.
“SMEs are also uniquely positioned to offer employees broader exposure and faster learning,” Ramotala explains. “In smaller teams, people often take on more responsibility earlier in their careers, gain visibility across the business and see the direct impact of their work. For many employees – especially younger professionals – that experience can be just as compelling as a higher salary.”
Another effective way for SMEs to retain talent, particularly in skills-constrained sectors, is through investment in skills development and continuous upskilling. “When employees feel that their employer is investing in their growth, it builds loyalty,” says Ramotala. “Training, mentorship and clear pathways for progression send a strong signal that there is a future for them within the business.”
He adds that purpose-driven leadership and recognition also play an increasingly important role. “Workers today are looking for more than a payslip – they want to feel valued and understand how their role contributes to the bigger picture. SMEs that communicate this clearly are better positioned to retain skilled staff, even in a highly competitive market.”
To ease potential doubt around long-term job security – particularly given the current volatile macro-economic landscape – Ramotala says SMEs should prioritise employee engagement. “We find ourselves in a period of extreme uncertainty and disruption, and businesses need to understand that this has a direct impact on people’s career decisions. The businesses that will be best positioned to navigate this tough period will be those with an engaged workforce.”
Finally, Ramotala notes the role that funding can play in enabling SMEs to not only retain top workers but also formalise their people strategies and move from reactive to proactive retention approaches. “When SMEs have the right financial backing and advisory support, they are better able to invest in their people, improve internal systems and plan for sustainable growth.”
As South Africa reflects on the contribution of workers across the economy this Workers’ Day, Ramotala concludes that SMEs deserve particular attention. “Small businesses remain a vital cog in the job creation initiatives of our country and contribute to its economic resilience. Supporting SMEs to retain skilled talent is therefore not only good for individual businesses, but for the wider economy. When SMEs thrive, workers thrive, and so does South Africa.”
