- One in five (20%) SMEs report having problems with a high level of staff turnover
- A quarter (24%) of bosses say outgoing staff leave their company go to a larger organisation in the same sector, with almost a fifth (23%) seeking a career change
- Providing a healthy work/life balance (28%), flexible working opportunities (26%) and relevant training (23%) are the most common ways that SMEs try and retain best employees
- Word of mouth (24%) is the most used tactic for business leaders to attract new talent
The latest Aldermore Future Attitudes report reveals that over two thirds (67%) of SMEs, representing 3.82million* small and medium sized businesses across the UK, find it difficult to hire qualified staff members or keep existing talent in the company.
Hiring and retaining employees is fraught with difficulties for any business. The study, which surveyed over a thousand business decision-makers across the UK, found that the most commonplace concern is finding the right people (32%), with key employee positions often difficult to fill (20%).
Retaining good members of staff once they have been found is a concern for over a quarter (26%) of business leaders, with a fifth (20%) admitting to currently having a problem with a high workforce turnover. Over one in seven companies (15%) find it hard to adequately develop employees who demonstrate great potential, and younger employees can be particularly difficult to keep on board (15%). Almost one in three (29%) say that they have experienced an increase in staff leaving their business compared to 12 months ago.
When looking at the reasons behind employees moving onto pastures new, bosses say the most common motive is a change in career (23%), followed by wanting quicker career progression (21%) and a pay rise (19%). In terms of where they then go, nearly a quarter of their employees (24%) land a job at a larger organisation in the same sector, a further one in seven (16%) move to a larger company in a different industry and over one in ten (13%) go to another SME in a similar industry.
Most small and medium-sized organisations in the UK (76%) recognise they must make an effort to avoid employee churn and to keep their best people. Most commonly they do this by ensuring staff have a healthy work/life balance (28%) and flexible working opportunities (26%), followed by offering relevant training courses (23%) and giving staff regular pay rises (21%).
When recruiting new talent or when replacing staff members who have left the company, word of mouth remains the most reliable method of attracting new candidates (24%). More than one in six (17%) business leaders choose to advertise new roles and one in seven (15%) hire external recruitment agencies.
Carl D’Ammassa, Group Managing Director, Business Finance at Aldermore, said: “It’s a job seeker’s market out there and this trend looks set to continue over the coming years. Talented workers within the SME industry are able to find new employment quite easily, with many individuals moving on when they feel they can get a better deal or could progress further and quicker in a different environment. Competition for the best industry talent has always been fierce and business leaders need to put measures in place to ensure their companies are attractive places to work for ambitious employees.
“The best people can have a significant, positive impact on how that business performs, so therefore it is heartening to see that the majority of SMEs acknowledge that it is important to make an effort to keep talented people by offering a good work-life balance, flexible working, and valuable training. This is to be applauded, and many larger employers could learn much from their smaller peers about maintaining staff satisfaction.”
For further information, journalists can contact:
Carmel McCarthy, Aldermore Press Office
Phone: 020 3553 4292
Mobile: 07464 644754
Tom Pavey-Smith, Lansons
Phone: 020 7294 3606
Mobile: 07917 165588
Notes to Editors:
Research conducted by Opinium Research between 26 and 31 October 2017 with a nationally representative sample size of 1,008 senior decision makers in SMEs.
* SMEs figure – calculated using Federation of Small Business statistics that say the UK has 5.7m SMEs (2017 figures). Aldermore Future Attitudes research showed that 67% of SMEs have encountered challenges when hiring qualified staff and retaining good employees. 67% of 5.7m = 3.82m
For further information about Aldermore, please review our Notes to Editors page.