Although the economy is slowly recovering, there is no doubt that the business situation is still challenging. As small and medium-sized businesses seek to expand, employee engagement, motivation and morale have never been more important. For any business to be successful it is vital that staff are motivated and are working well within the structure of the company.

Measures such as implementing flexible working hours, remote working and staff training initiatives can ensure that employees are happy and motivated, and thus perform at their optimum levels for their employer. Forward-thinking organisations have been employing a range of innovative ideas when it comes to meeting the challenges of engaging, developing and retaining talent in financially challenging circumstances.

Top tips from the CIPD on how to develop creative talent responses:

Improve talent schemes
For those firms that have had to postpone or scale back talent management initiatives, the downturn represents a perfect opportunity to review and develop the effectiveness of their talent schemes so that they are as beneficial to staff as possible.

Focus on existing talent
Although there are many distractions related to the downturn it is more important than ever that talented employees continue to perform as effectively as possible and are fully engaged and motivated. As an employer you must ensure that your most talented and valuable staff are happy and motivated and feel that their skills are being developed. If your firm does not have the spare finance available to hire an external trainer, then consider internal training. For instance, can a promising junior member of your staff shadow a senior manager for the day?

Think creatively
On the whole, recruitment freezes or reductions are encouraging business owners to be less risk averse in their promotion decisions. Line managers currently have to think much more creatively and carefully before they go to the external marketplace. This helps organisations fully utilise the skills of their existing workforce and provides existing employees with more opportunities. However, if internal candidates are more likely to be given stretch appointments they must be provided with effective support. Try to also innovate with your talent assessment and development processes.

Implications for small firms
Smaller organisations have an opportunity to lead the way around talent innovation at this time. Most have never had the luxury of vast corporate resources and budgets to attract, develop, retain and deploy talented employees. There are more opportunities to attract great employees who have lost faith in the larger corporations and are looking for stability and trust. The personal approach and culture of smaller businesses should also make for a more attractive employer in the current marketplace.

Talent is easier to keep track of in SMEs and it's simpler to ensure that individuals are being matched with appropriate assignments. Try to combat negative perceptions about career development by introducing lateral moves, project work visible to senior managers and instead of external advertising, promoting from within the company.