The People Challenges Facing Employers
SMEs make a vital contribution to the UK economy. They currently deliver £202bn to the economy and this is expected to grow to £241bn by2025,accordingtotheSMEGrowth Watch. The health of this sector is crucial to UK productivity. However, when it can take many months to find suitably qualified candidates then that can severely impact the growth plans of these companies and the economy as a whole. 2 According to the CIPD 3 , recruitment and retention continue to pose major tests, with 41% of employers reporting that it has become harder to fill vacancies during the past year, and 33% claiming that retaining staff has grown more difficult. A recent report from the British Chambers of Commerce 4 suggested that half of UK businesses now find it takes longer to recruit people compared with five years ago, with one in five saying it now takes up to six months to fill a skilled role. Our findings back up these studies. More than three out of four SMEs taking part in our research (77%) said they find it challenging to recruit suitably qualified staff for their business.
The undervalued employee
The recruitment and retention challenges facing SMEs have been exacerbated by a ‘perfect storm’ of low unemployment, and slow wage growth that has squeezed household incomes to levels not seen since the recession of the mid–1990s. This has led employees to look elsewhere in a labour market where good people are in high demand. But employers can’t, of course, simply shrug their shoulders and blame macro–economic factors for their employee woes. They must look closer to home and identify what factors are contributing to a lack of staff satisfaction in their own organisation, from low pay to a lack of flexibility, poor career progression opportunities or the absence of real responsibility. More than ever, SMEs need to ensure they are aware of their employees’ changing expectations and are able to respond to them to minimise the risk of losing staff to competitors and finding themselves in a potentially drawn–out and costly search for suitably qualified replacements. Our findings suggest that the vast majority of SMEs don’t consider this to be a problem in their own organisation. Some 85% of SMEs surveyed think their employees feel valued, compared to just 15% who believe their workers don’t feel valued. This is broadly similar to the feeling amongst representatives of larger businesses taking part in our study. However, employees themselves paint a different picture. Across all sizes of company 64% of workers feel valued by their employer compared to one in three (34%) who don’t. Just 71% of SME employees say they feel valued by their employer, 14 percentage points below the finding from the employer survey, suggesting that employers are unaware of the scale of the problem. More than one in four SME employees (27%) says they don’t feel valued.
And two–thirds of SMEs we surveyed (64%) said they found staff retention challenging.
2 SME Growth Watch CEBR and Hampshire Trust Bank 3 CIPD Labour Market Outlook Spring 2019 4 British Chambers of Commerce, 25 June 2019
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