Recruiting new staff has become a top priority for UK SMEs with more than one in three expecting to increase the size of their workforce by more than 10% over the next 12 months, according to a new study by alternative lender Capify.
More than 250 SMEs were involved in the survey, which also found that an additional 58% expected their staff numbers to stay the same and only 7% were anticipating a reduction.
When asked to prioritise areas for investment over the next 12 months, people and training came top of the list with 41% of SMEs identifying it as a key business priority.
However, finding new staff is expected to be a big challenge, with 36% of SMEs highlighting it as a challenge in the year ahead. The issue of COVID and possible future lockdowns topped this list with 55% of SMEs worried about the impact the virus may have. Rising inflation came second in the list, with 34% of SMEs concerned about escalating costs.
John Rozenbroek, CFO/CCO at Capify said: “It’s positive to see UK SMEs putting their staff at the forefront of business strategy, with people and training coming as a top priority for the majority of businesses in our latest survey. People are truly a business’s greatest asset and it’s encouraging to see so many SMEs valuing this in their future plans with clear plans to expand their workforces.
“We know that the small business community is resilient and it’s promising to see that many are optimistic about the future, with investment and future growth important priorities.”
The figures on recruitment expectations are in stark contrast to the previous 12 months, with the Capify survey finding that 24% of businesses had reduced their staff numbers during the pandemic.
Around 64 per cent of SMEs said they had also accessed the Coronavirus Job Retention Scheme (CJRS), with the government support ending on 30 September, analysts estimate that around 700,000 people may lose jobs, hours or earnings, so it remains to be seen how this will impact SMEs and the availability of labour across key sectors.
“With the end of furlough, rising inflation and the recent issues around energy prices, it’s no surprise that SMEs do have some concerns to keep in mind,” added John.
“It could be a challenging 12 months for SMEs in many sectors as margins become tighter – especially if increased overheads need to be managed alongside adding new staff.
“With future growth as a priority, SMEs must ensure strong cash flow in their business, no matter the industry. Alternative finance options have been instrumental in helping SMEs through this period and they will no doubt play a huge part in supporting growth goals for the future.”