Beyond the bottom line: How to motivate, engage, and retain small business employees

Today’s workforce, especially millennials and Gen Z, are not motivated by long-term promises or end-of-career rewards. Instead, they crave purpose, recognition, and work that reflects their personal values and ethics.

Author: Jeremy Lang, managing director at Business Partners Limited

As we mark Worker’s Day on 1 May, it is essential for small business owners to rethink what truly drives employee loyalty, productivity and motivation, especially if they want to retain top talent in 2025. In today’s landscape, financial metrics are no longer the primary focus.

Purpose over pay

Gen Z and millennials are redefining what success looks like in the workplace. Career growth is no longer tied to tenure or job titles, but to a sense of purpose and personal fulfilment. A recent HR Future article notes that 63% of Gen Z professionals consider growth opportunities as a key workplace factor – but this growth needs to be transparent, merit-based, and aligned with their values.

These generations want to work for companies that do more than just generate profit. They’re drawn to businesses that stand for something – whether that’s sustainability, mental health advocacy, community upliftment, or ethical leadership. According to Human8, over 70% of Gen Z employees in South Africa expect brands and employers to contribute positively to society.

The rise of human-centred workplaces

The shift we’re seeing is not just generational – it’s human. The last few years have reminded us all just how much mental wellbeing and work-life balance matter. Flexibility, empathy, and emotional intelligence are becoming just as important as KPIs.

We are now operating in what some call the “disconnect economy” – a cultural response to digital overload and constant connectivity. People are opting out of always-on hustle culture in favour of intentional, human-focused living. For employers, this means offering flexibility, setting clear boundaries, and prioritising mental health initiatives is not a bonus – it’s a business necessity.

As leaders, we must ask ourselves: are we managing people, or are we empowering humans? The companies that build environments of trust, openness and psychological safety will have the edge.

Recognition is the new reward

In a world of instant gratification and hyper-personalisation, annual reviews and service awards feel outdated. Employees today thrive on real-time, authentic recognition.

Small businesses can do this better and more cost-effectively than their large counterparts. Create systems for peer-to-peer appreciation, celebrate small wins regularly, and ensure leaders are trained to give constructive, timely feedback. It’s not just about the praise – it’s about being seen.

Customise, don’t generalise

A one-size-fits-all approach does not work. Employees want personalisation, whether it’s in how they’re rewarded, how they work, or how they grow.

Small businesses have the advantage here. Unlike corporates, you don’t need to get dozens of departments aligned before implementing change. Take the time to understand what your people actually want. Offer optional wellness stipends. Let people choose between training courses or flexi hours. Ask what matters to them, and act on it.

Workplaces built on trust

Loyalty today is reciprocal. Employees will stay if they feel they are part of something meaningful and if they trust their leadership. Transparency in decision-making, honest communication about company goals, and involving employees in shaping culture all go a long way.

As younger generations continue to dominate the workforce, it’s clear that businesses must embrace a more human-centred leadership style. This means shifting the focus from control to empowerment, from uniformity to individuality, and from profits to purpose.

It’s tempting to cling to the idea that people should be grateful just to have a job. However, time will prove that the most successful SMEs in 2025 will be the ones who value and view their employees as their competitive advantage.

Prioritising purpose, flexibility, empathy, and trust will go beyond retention to building a culture that motivates people to give their best. And that, in the end, is worth far more than a gold watch.