Half of SMEs are concerned about attracting and retaining talent in 2023 - Business Leader News

Half of SMEs are concerned about attracting and retaining talent in 2023

As UK SMEs prepare to navigate the year ahead, widespread staff and skilled labour shortages are a key area of concern, with almost half of SMEs (47%) concerned about attracting and retaining talent in the next 12 months, according to new research from solution-led fintech provider Nucleus Commercial Finance (NCF).

The staffing issue is even more acute among those with up to 250 employees, with 68% concerned about staffing in 2023. Among this group, almost a third (31%) say it’s of “high concern”.

Among those SMEs that identified attracting and retaining talent over the next 6-12 months, a range of options are being explored. More than two in five (42%) SMEs are hoping that investing in staff training will help bridge the anticipated skills gap, while more than a third are having to increase staff wages (36%). One in three (33%) reveal that they are investing in staff benefits and perks, 22% are having to offer a bonus one-off payment to help attract new employees, and 18% plan to invest in a mass recruitment drive to source and appoint new talent across their businesses.

For others, looking further afield for support will be the main focus in 2023. Around one in five (19%) have little choice but to potentially accrue higher costs and outsource work to overseas support to maintain productivity, while 15% say that they plan to hire from overseas.
What is particularly worrying is that for some, there is no clear solution. At least not yet. 7% of SMEs admitted to not knowing what they’ll do to address staffing issues and around one-in-ten (9%) are unlikely to take any direct steps to address their concerns this year.

Chirag Shah, Founder and CEO of Nucleus Commercial Finance comments: “UK employers are continuing to struggle with what has been, and looks like continuing to be, one of the worst staff shortages since the late 1990s. Hiring challenges, exacerbated by the lockdown recovery and a shortage in skilled, and overseas workers has a direct impact on the ability of the economy to make up growth losses.

“Businesses – and SMEs in particular – have a multitude of issues facing them this year. Staffing is a key area of concern, and our research indicates there are many business owners looking for ways to reinvest into their people to ensure they’re attracting and retaining the top talent, while hiring opportunities are scarce. This is why it is essential that businesses have easy access to commercial lending so that they are able to reinvest into their businesses and deploy all the avenues available to them to ensure they are keeping employees engaged and the right people are walking through their doors.”