SMEs find new ways to tackle the recruitment challenges of low employment
Near record-low levels of unemployment have resulted in over a quarter (27 per cent) of SMEs struggling to hire skilled workers in Q1 2018,according to the latest SME Confidence Tracker from Bibby Financial Services (BFS).
Finding new staff and retaining existing employees are some of the key challenges faced by SMEs. Over a fifth (23 per cent) of SMEs say they have had to increase wages to retain skilled workers and 22 per cent are having to offer higher salary packages when hiring due to increased competition. While gaining access to skilled workers is a problem across all sectors, it is a particular challenge for the construction sector, with more than a third (37 per cent) of SMEs saying that hiring skilled labour is a concern.
Despite this, SMEs are determined to combat the skills shortage, with more than two-fifths (42 per cent) planning to invest in training and developing existing staff and a quarter (24 per cent) bringing in new talent over the next three months.
These latest investment figures come as confidence among the UK’s SMEs has rebounded to 2015 levels, with the overall index rising by six basis points from 58 in Q4 2017 to 64 in Q1 2018 and 39 per cent of SMEs reporting sales growth during the quarter. SMEs are also feeling more confident about the future, with half (50 per cent) expecting sales to increase over the next three months.
Commenting on the findings, Sue Farmer, Head of Recruitment Finance, Bibby Financial Services, stated:
“The figures speak for themselves. Low unemployment and increased competition has created an environment where SMEs are struggling to hire the skilled workers they so desperately need.
“What’s encouraging to see, is that business owners are thinking on their feet and exploring other ways to tackle this ongoing challenge. 42 per cent of SMEs plan to ramp up investment in upskilling their existing staff as a means to plug the gap.
“With many firms reliant on overseas workers, it is, unfortunately, likely that this issue will only worsen when the UK leaves the EU next year. It’s important that businesses recognise the significant benefits that can be garnered by training existing employees.”
Despite the confidence boost, SME’s face further obstacles, with 14 per cent freezing staff recruitment as a direct result of the recent increase in pension contributions. Meanwhile, with Brexit negotiations underway, over two-fifths (43 per cent) of SMEs say uncertain economic environment and Brexit are holding back investment.