Finding new staff and retaining employees were some of the biggest challenges faced by SMEs in the first quarter of 2018, Bibby Financial Services' research has revealed. It found that 23% of SMEs have had to increase wages to retain skilled workers, and 22% are offering higher salary packages when hiring because of increased competition.
While accessing skilled workers was a problem across all sectors, construction was found to be facing particular challenges with 37% of SMEs in the sector citing this issue.
However, SMEs have strategies to tackle their skills shortages, the research found. More than two-fifths (42%) said they are planning to invest in training and development for existing staff, and a quarter (24%) said they want to bring in new talent over the next three months.
Business confidence among SMEs was also found to have improved overall, with 50% expecting sales to increase over the next three months. Meanwhile, 39% of SMEs reported sales growth within the first quarter of 2018.
Commenting on the findings, head of recruitment finance at Bibby Financial Services, Sue Farmer said: “The figures speak for themselves. Low unemployment and increased competition have 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.”
However, the report warned that SMEs still face further pressures, with 14% freezing staff recruitment as a direct result of recent compulsory workplace pension contributions increases. As the UK prepares to exit the EU 43% of SMEs said that an uncertain economic environment and Brexit are holding back investment.
Farmer added that as Brexit is likely to lead to talent deficits it is important that employers focus on training staff.
“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,” she said.
Bibby Financial Services’ SME Confidence Tracker surveyed 1,000 SME owners across the UK. The research was conducted by Critical Research.