TAKEAWAYS
New or old, big or small, workplace fairness is every company’s business.
In the midst of immediate challenges that small and medium-sized enterprises (SMEs) may face, such as managing costs and growing their business, preparing for the upcoming workplace fairness legislation may not always be at the forefront of their agenda.
However, it is essential to recognise that ensuring workplace fairness offers benefits to all organisations, including SMEs.
Here are some reasons SMEs should prioritise workplace fairness and start factoring it into their core business objectives:
As the saying goes, “Take care of your employees, and they will take care of your organisation.”
In SMEs with a lean workforce and limited resources, maximising the potential of each team member is even more important for achieving sustainable growth. According to a 2021 survey by the Harvard Business Review, higher perceptions of fairness can improve employee performance by up to 26%.
When employees are treated fairly, they will be more motivated to do their best for the organisation. As a result, they feel more meaningfully engaged and productive, both with the work they are doing, and with the colleagues they are working with.
Creating a fairer workplace can include putting non-discriminatory hiring practices in place, implementing transparent performance management processes and ensuring fair and sustainable wages in accordance with the National Wages Council’s guidelines.
Workplace conflicts are inevitable, but how they are handled and resolved lies in your hands.
A potential misconception among small, close-knit teams is that a grievance-handling process may be deemed unnecessary, as communication channels are relatively more open, and issues can be worked out informally.
But when miscommunication and misunderstandings occur, they can negatively impact staff morale and productivity if they are not managed properly, which could have even more far-reaching consequences in a small team.
SMEs should put in place formal policies and processes to manage and resolve workplace disputes amicably, as this gives employees the assurance that the company cares about them and will find a way to address their grievances.
In fact, a strong culture of fairness not only reduces conflicts and prevents negative emotions from building up, it improves cooperation within teams in the long run. When conflicts are minimised, employees can focus their time and energy on delivering good quality work and achieving business outcomes.
Attracting and retaining talent starts with fairness.
A 2022 report by the World Economic Forum found that 48% of SMEs cite talent attraction and retention as their biggest challenge. In today’s increasingly competitive labour market, what make companies stand out are their culture and values. Those that prioritise and intentionally build a workplace culture based on fairness have a distinct advantage when it comes to attracting and retaining top talent, and can reduce turnover rates by up to 27%.
This can result in cost savings in the long run, helping SMEs – which already grapple with a tighter budget – save on the cost of hiring and retraining new employees.
Despite limited resources, it makes good business sense for small firms to strengthen their HR capabilities. This can include fractional HR, where companies engage HR professionals on a part-time basis – rather than hire dedicated staff – to save costs.
You can also appoint an existing employee – such as a trusted manager or supervisor – to be the dedicated person handling staff feedback or grievances. She/He can be sent for relevant training workshops to equip her/him with the necessary skills for the role.
Achieving a balance between immediate priorities and proactively preparing for workplace fairness legislation is crucial for organisational success. SMEs need to cultivate a culture that embraces workplace fairness along with business growth, as neglecting it can prove costlier in the long run.
If you are not sure where your organisation stands in terms of workplace fairness, perform a quick self-assessment using the Fair and Progressive Employment Index (FPEI).
This article was first published by the Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP). Adapted and reproduced with permission.
© 2024 Institute of Singapore Chartered Accountants