Brexit curbs planned growth and investments for one in four UK SMEs, Index finds
The latest ‘UK SME Confidence Index’ from Vistage has revealed that one in four SME leaders say both their planned business growth (25%) and planned investments (23%) have been impacted negatively by ongoing Brexit negotiations.
When it comes to recruitment, these SMEs are also pushing back plans to increase their total number of employees in the next 12 months and a growing number concede they will not be growing headcount in the next year. This is up from 36% to 43% in the last quarter.
As and when these businesses do ramp-up recruitment, recent industry figures suggest there may be tougher times ahead. ONS reports show that net migration in the UK has fallen to the lowest level in three years; down to 246,000 from 327,000 in the last year. Combine this with a workforce deficit likely to emerge over the next seven years – a result of 14m employees retiring but just 7m people of working age entering the market – and the odds are stacked against talent hungry SMEs, Vistage says.
Roger Martin-Fagg, Vistage economist in residence, commented, “There is no doubt in my mind that SMEs will face one of the toughest recruitment challenges they’ve ever encountered in the months ahead. I suspect around 750,000 disillusioned workers will be moving to other parts of Europe to seek a more stable economy. This means the fight for the cream of the crop will be rife for UK businesses. We will quickly see that many of the people choosing to flee the UK for ‘pastures green’ are the lifeblood of vital industries. These combined factors means automation is crucial for business survival.”
Already 39% of SME leaders admit that it’s far more difficult to hire top talent today than it was a year ago. In response, 61% have resorted to using social media channels to recruit and more than half (55%) are hiking salaries to lure them in. As to what employers are looking for, four out of ten rank social skills as the number one attribute followed by management skills such as delegation and communications (37%).
As result of these recruitment challenges, SME leaders are more aware than ever of the need to look after existing staff, with 66% upping their game on training, 58% increasing salaries and 55% bolstering benefits packages. When it comes to business strategies for talent management, however, SMEs concede there is room for improvement:
- Almost half (49%) do not monitor market or competitor packages
- 38% say they do not have an effective process in place to continually attract the best talent
- 29% fall down on succession planning for key positions and critical players
- 17% do not effectively align their talent and business strategy
- A further 17% do not identify current and future skills gaps effectively
Geoff Lawrence, director of Vistage UK, said, “There are certainly interesting times ahead for UK SMEs, but for many it’s about shifting the business strategy in order to cope with the increased uncertainly of Brexit. With many of those surveyed still in ‘ScaleUp’, it seems leaders remain optimistic that uncertainty won’t douse their flames of growth.”
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