The new deal: how employee expectations are reshaping people & culture in SMEs
If you run a business, and no matter whether you’re a global conglomerate or a small to medium business, you’ve probably felt it already: what people want from work has shifted – and it’s not shifting back.
It’s not just “Gen Z being fussy” or “people not wanting to work”. Across age groups, employees are weighing up jobs differently: flexibility, wellbeing, meaningful work and decent leadership now sit alongside pay, not behind it. Recent Australian surveys show work–life balance now outranks pay as the top priority for jobseekers, with salary, working environment, management quality and career development rounding out the top five.
For SMEs, this can feel confronting – especially when you don’t have deep pockets or a corporate HR team. The good news? You don’t need beanbags and a meditation room. You do need a clear, honest people proposition and managers who follow through.
Let’s unpack four big expectation shifts and what they mean in practice for smaller organisations.
1. Work–life balance and flexibility are no longer “nice to have”
Flexible working is now a core decision-maker for many candidates. Research with Australian employees shows work–life balance and flexible work as two of the top drivers of retention – yet most organisations still mandate some office attendance, and a significant share require full-time office work.
At the same time, right-to-disconnect laws are coming fully into force for small businesses from August 2025, giving employees a legal right to refuse unreasonable contact outside normal hours.
What employees now expect
Reasonable boundaries around contact after hours
Some say in when and where they work, where the role allows
Workloads that feel sustainable, not permanently “emergency mode”
What SMEs can realistically do
You may not be able to offer fully remote work, but you probably can:
Tidy up scheduling and rostering so start/finish times are predictable
Be explicit about out-of-hours contact (what’s an emergency, what isn’t)
Offer micro-flexibility – e.g. a later start/finish one day a week, school-run adjustments, occasional work-from-home for desk-based tasks
Match policy to reality – if your handbook says you support balance but managers text at 9.30pm, employees believe the texts, not the policy
Small, consistent moves here do more for culture than a glossy “flexible work” statement on the website.
2. A stronger employee value proposition (EVP) – even on a small budget
An Employee Value Proposition is essentially the “give and get” between you and your people – why someone would join, and why they’d stay.
Advisers are warning that traditional EVPs based mainly on pay and promotion are no longer enough; employees are also weighing culture, leadership, flexibility and growth.
What employees now expect
A clear sense of what it’s like to work here before they sign
Honesty about both the upsides and the trade-offs
Some tangible benefits that recognise real life (time in lieu, autonomy, learning opportunities, etc.)
What SMEs can realistically do
You don’t need a corporate benefits brochure, but you do need a story. For example:
Name your EVP clearly: “We’re a growing trade business that offers fair pay, predictable rosters, approachable leaders and a genuine say in how we work.”
Be specific about benefits: extra day off at Christmas, paid study time, tool allowance, RDOs, flexible start/finish times, etc.
Check that what you say externally matches the lived experience – employees spot the gap instantly, and it erodes trust fast.
If you can’t afford to be the highest payer, you have to be clearer and more intentional about everything else you offer.
3. Leadership, trust and psychological safety are under the microscope
Employees are increasingly choosing (and leaving) jobs based on their experience of leadership and culture – not just the brand name on the door. Global and local reports highlight trust, flexibility and a sense of purpose as core ingredients of attractive workplaces.
For SMEs, this usually comes down to a handful of owners and managers. The way they behave is the culture.
What employees now expect
Managers who communicate clearly, give feedback, and are consistent
A workplace where they can raise issues without being punished
Some say in decisions that affect their day-to-day work
What SMEs can realistically do
Invest in your people leaders: short workshops or coaching on giving feedback, handling conflict and running 1:1s are often more impactful than another technical course.
Make “how we lead” part of your culture: write down some simple leadership expectations (e.g. “no surprises”, “feedback early, not at crisis point”, “we listen first”) and hold each other to them.
Model accountability at the top: when owners admit mistakes, keep their promises and take action on poor behaviour, it sends a clear signal that standards matter.
You don’t need dozens of HR policies; you need leaders whose behaviour is predictable, fair and aligned with your stated values.
So what does this mean for your business?
If you strip away the jargon, the shift in people and culture expectations comes down to three questions employees are asking themselves:
Can I live a decent life while doing this job?
Do I feel respected, informed and fairly treated here?
Is this role taking me somewhere, or keeping me stuck?
You don’t need to be perfect on every dimension. But if your answer is “no” or “not really” to all three, recruitment and retention will only get harder.
For SMEs, the opportunity is to:
Get really clear on what you can offer (and stop pretending to be a mini-corporate if you’re not)
Make sure your managers are actually living those promises
Build simple, human systems around flexibility, feedback, workload and development
That’s the new deal. Employees aren’t just looking for a pay packet; they’re looking for a sustainable, respectful and future-focused working life. The SMEs that respond thoughtfully – rather than dismissing these expectations as entitlement – will be the ones with the talent advantage over the next few years.
If you’d like help translating these ideas into something practical for your business – from tightening up your policies to coaching your leaders – we can support you.
Book a complimentary and confidential chat to get started.
