WITH the ever-changing landscape of the job market, employers are faced with the challenge of attracting top talent and retaining them in the company. This is an even more difficult task for small and medium enterprises (SMEs).

SMEs account for 65 percent of total employment in the Philippines and are considered the true backbone of the economy; but they are at a disadvantage in the job market compared to larger corporations due to one crucial factor — salary.

Insights from a report by the JobStreet Salary Guide 2023 indicates a huge disparity in salaries between SMEs and their corporate counterparts. This is true even for some of the top industries; average salaries in computer and IT (information technology), for example, are P55,000 and P82,500 for SMEs and corporate, respectively — or a 50 percent difference. This gap is narrower among rank-and-file employees and grows significantly wider in the management level.

This difference, of course, may be attributed to a number of factors — financial resources, location (there is a greater concentration of larger corporations in metropolitan areas) and industry. However, this does not mean SMEs should always get the short end of the stick. There are certainly ways to make SMEs into more attractive employers:

Increase engagement with your employees. A 2023 survey conducted by Ernst and Young indicates that employees who feel a sense of trust, empowerment and care are shown to have a 40 percent lower likelihood of resigning. Happy employees tend to stay longer. By incorporating programs to regularly check on the employees' morale, pain points and goals, then you help make sure that they are taken care of.

Invest in employee well-being. Challenges relating to the health and wellness of your employees and their family can affect their morale and productivity. SMEs could get a better advantage by providing benefits that promote their wellness whether through enhanced HMOs (health maintenance organizations), mental health support, subsidized purchases of wellness products or services, or even as simple as exercise programs at work.

Emergency assistance. Financial burden can bring distress to employees and severely affect their morale, especially during times like emergencies, enrollment season and hospitalization. SMEs can show a sense of care toward employees through financial assistance, which might be through emergency cash advances or formal salary loan programs.

While very little can be done to impact the factors that cause the pay disparity, SMEs can employ these creative ways to become more competitive employers.

Dominic Hatol is the strategic operations manager at First Circle, a financial institution that specifically caters to SMEs in the Philippines. He is also product manager for First Circle's SME Employee Growth Product (SEGP), which helps employers provide value to their employees through low-cost financing and special benefits related to transportation, health and other necessities. For more information, you may email segp@firstcircle.com.