SMEs press pause on growth plans due to Brexit
ONE in four small- and medium-sized enterprises (SMEs) say their planned business growth and investments have been hampered by Brexit negotiations, according to new research.
The latest SME confidence index from business leader organisation Vistage revealed that SMEs are also pushing back plans to scale up their total number of employees over the next year. 43 per cent of respondents said they will not be increasing headcount over the next 12 months, compared to 36 per cent in the last quarter.
Vistage surveyed 336 UK SME leaders during September.
The research found that business leaders are finding it to recruit the best talent. Around 39 per cent said that it is more difficult to hire top talent today than it was last year.
Vistage suggested this is only likely to get tougher, pointing to Office for National Statistics figures which have highlighted how net migration has fallen, while there is likely to be a workforce deficit in the coming years, with twice as many employees retiring as people of working age entering the market.
“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,” said Roger Martin-Fagg, economist in residence at Vistage.
“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.”
Retaining existing staff is clearly taking on even greater importance for SMEs, with two thirds (66 per cent) of SME leaders improving the training on offer, 58 per cent raising salaries and 55 per cent looking to boost the benefits packages on offer.
Nonetheless, many admit room for improvement, with almost half confessing they do not monitor competitor packages and almost one in three recognising they fall down on succession planning for key positions and critical players.
Despite the issues faced by SMEs, they appear to be in relatively rude health. In fact, the latest SME Health Check Index, compiled by the economics consultancy Centre for Economics and Business Research (Cebr) in association with CYBG, owner of Clydesdale and Yorkshire Banks, found that the economic health of SMEs has hit an 18-month high.