New research from AXA PPP healthcare reveals that it costs SMEs nearly £30,000, on average, to replace an employee, with employers looking to focus on employee wellbeing in 2017 to help lower the likelihood of having to recruit new people to replace those who’ve left their business.
UK SME bosses predict that the biggest areas of focus for them in 2017 will be employees’ work/life balance (35 per cent), offering more flexible working practices (21 per cent) and better procurement practices to ensure cost savings (19 per cent).
The focus on employee wellbeing and cost control is unsurprising, given that SME decision-makers say that it costs nearly £30,000 to replace employees in terms of recruitment costs, training time and lost productivity.
2017 also looks like being a good year for job prospects in SMEs, with 24 per cent of respondents looking to hire between 3-5 people and a further 18 per cent looking to hire more than six people. Seventeen per cent expected to add one or two people to their team.
Iain McMillan, Director of SME for AXA PPP healthcare, commented:
“Attracting talented people to drive your business forward involves considerable commitment and investment. New employees need training and time before they’re fully functional and, in turn, begin to reward you with a return on your investment.
“Good people are hard to get and keep so it’s good news that SMEs acknowledge the importance of employee work/life balance. Creating a positive, supportive environment where workers can flourish is key to building and maintaining a high-performance workforce and, at the same time, safeguarding your business from the costly risk of losing valuable people.”
The research also highlighted that 14 per cent of SMEs thought 2017 would see working hours increase – along with employees’ remuneration expectations.