That point was made clear in a new report by the National Center for the Middle Market. It’s a “significant challenge” to attract and retain talent for “the vast majority” of middle-market firms, the report says, with about three out of four leaders of such companies consistently listing talent issues as “highly” or “somewhat challenging” in the organization’s quarterly reports. The problem is most acute in top-management positions.
One reason: Middle-market firms are in a particular bind in landing and keeping the best talent, especially in the current environment of rising overall demand. CEOs must compete with both smaller and startup firms, which can have attractive growth stories, as well as a high level of excitement and energy. Conversely, larger, established firms are also strong competitors because they offer stability and established brand names.
There’s also the matter of competitive compensation when it comes to competing against larger firms. “Many middle-market companies struggle to match the compensation packages offered by larger companies,” the Center found. “They may not be able to offer the same salary, bonuses, stock options, health-care benefits, retirement packages and other financial incentives … that their larger counterparts use to woo candidates.”
Faced with such challenges, the Center recommends that mid-market CEOs consider these four key takeaways in winning today’s battle for talent.
1. A unique employer brand can be attractive. This can help give middle-market firms the edge. “Firms with a solid reputation that offer unique benefits and rewards experience greater success in securing top talent.”
2. Strong “employee value propositions” matter. Middle-market firms with a strong employer brand as well as a strong “employee value proposition” are more likely to report improved company performance, higher revenue and higher employment growth than firms with less-established brands and propositions. That, of course, makes these enterprises more attractive to high-value talent.
3. Top talent candidates seek more than a good salary. Salary is the leading benefit for attracting the attention of a “passive candidate”—someone who isn’t actively looking for new opportunities. But money isn’t everything. The Center’s research shows that “these candidates are also interested in opportunities for growth, work/life balance, and promotion.”
4. Emphasizing middle-market uniqueness can help. Providing company-related or distinctive benefits—especially those associated specifically with a mid-size firm, such as providing career growth opportunities and offering the opportunity to relocate to young, desirable city within the U.S. or abroad—can be the focus of a successful employee value proposition. In addition, “the quality of a company’s associates, meaningfulness of the work, and the company culture are leading components of effective” employee value propositions for mid-market firms, the organization said.