Small Business Employee Engagement – the vital role of remuneration

Posted in : Supplementary Articles ROI on 21 March 2023
Legal Island
Legal Island
Issues covered: Pay and Remuneration

The role of remuneration in employee engagement and retention cannot be overemphasized. While salary is a critical component of remuneration, it is not always the most efficient way to compensate employees. Employers must look beyond salary and focus on benefits that add value to the employee. The benefits offered should amplify the employer's money, meaning that the perceived value to employees should be greater than the cost to the employer. This way, clever SMEs can pass on maximum returns to their employees without breaking the bank.

Remuneration plays a critical role in establishing trust with employees. Employees who feel undervalued will not trust their employer to make other critical business decisions. That is why it is essential to remunerate employees fairly. Underpaid employees may feel undervalued, which may lead to poor employee engagement and retention.

Clever SMEs move money from their payroll to the benefits account to maximize the benefits offered to employees. When done correctly, benefits cost less than the perceived value to employees. Employers can get creative with the benefits offered, including partnering with other SMEs to offer scale and referring employees to other SMEs. This approach can make employers stand out in the job market and provide a competitive advantage over other businesses.

The top benefits that employees find attractive include health plans, health insurance, critical illness cover, and pension contributions. Employers must focus on remunerating employees in a way that minimizes the cost of employment and maximizes the benefits passed on to employees. Employers should also tailor their remuneration strategy to fit their type of business while motivating employees. By focusing on mighty clever remuneration, SMEs can stand out in the job market, attract and retain top talent, and achieve a competitive advantage.

The lead textbook in this space is “Mastering Small Business Employee Engagement 30 Quick Wins  & HR hacks from an IIP Platinum Employer” by Barry Phillips and Jayne Gallagher

This article is correct at 21/03/2023

The information in this article is provided as part of Legal-Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article.

Legal Island
Legal Island

The main content of this article was provided by Legal Island. Contact telephone number is 028 9446 3888 / 01 401 3874 or email

View all articles by Legal Island