- New research from Three Business shows UK SMEs are collectively planning to invest £20.4bn in recruitment, equivalent to an extra 630,000 jobs paying the UK average annual salary of £32,000 per year[1].
- Nearly a quarter (24%) of SME leaders surveyed say they are planning to prioritise investment in recruitment and nearly three in ten (29%) in staff training and development, as 23% of SME leaders say retaining and hiring talent is one of the most challenging factors of running a business.
- Collectively and across areas including marketing, staff training and development and implementing digital technologies, they’re planning to invest £252 billion in growth next year - a sum that is approximately equal to the value of the economy of Finland.
- This comes as over three quarters (76%) of UK SMEs feel optimistic for the year ahead, expecting an average 15% year-on-year revenue growth in 2024.
- Commenting on the Ambition Index, business mogul and mentor, Sara Davies, says: “The UK’s SMEs are vital contributors to the economy and to their communities, and I’m genuinely excited looking ahead to next year knowing there is so much appetite for growth and investment.”
Small and Medium Enterprises (SMEs) in the UK are prioritising investment in recruitment in 2024, planning to spend a whopping £20.4bn collectively to help them achieve their ambitions to grow.
New research outlined in the Ambition Index from Three Business – the B2B arm of the mobile network Three – has revealed that UK SMEs are looking ahead to a promising 2024 with a renewed sense of optimism and ambition, despite the challenging economic environment.
Recruitment was one of the top investments cited by UK SME leaders when asked about which factors will help them to achieve their growth, prioritised by almost a quarter (24%) of those surveyed. Other areas of investment included: marketing (33%), staff training and development (29%), customer service (27%), and adoption of AI and other digital technologies (22%).
While all regions across the UK said recruitment would help them to achieve growth in some capacity, Scotland was the region that aims to prioritise recruitment investment the most, with almost a third (31%) of Scottish leaders surveyed planning to invest in it next year. Looking at sectors, 31% of Construction & Development and 27% of Architecture, Engineering & Building SMEs plan to invest.
While 30% of UK SMEs say that growing their staff will be a focus for their business in 2024, 16% feel that recruiting and retaining staff are amongst the biggest challenges in the next 12 months. Meanwhile, almost a quarter (23%) feel that retaining and hiring talent is one of the most challenging parts of running a small business.
Contrary to the International Monetary Fund’s (IMF) gloomy outlook, that Britain’s economy will be the slowest growing among G7 nations next year, UK SMEs are looking forward to a promising 2024, as they expect to hit an average of 15% year-on-year revenue growth, bringing overall SME turnover from £2tn in 2023 to £2.3tn next year[2].
Despite the ongoing challenges, three quarters (76%) of UK SMEs are feeling optimistic about the coming year, while 69% feel resilient. This sets them in good stead for achieving their growth ambitions, with 70% saying that growth is a priority for them in the next 12 months.
Mike Tomlinson, Managing Director at Three Business commented: “Small and medium businesses are the lifeblood of the UK economy. Despite the difficult environment, it’s great to see that SME leaders have risk-proofed their businesses and are now ready to invest in their future, grow and take on the challenges of the next 12 months. The biggest asset in any company are its people, therefore the focus on not only the recruitment of new people to fuel growth, but also the upskilling of existing staff is coming through as a strong priority for UK businesses. At Three Business, we work in partnership with SMEs in all sectors and regions to make sure connectivity is an enabler for growth.”
Jonny Spratt and Martin Hamer, Directors of Spratt and Hamer, acoustic consultants featured in the Three Business report, commented: “The marketplace has definitely changed in recent years. We’ve had people leave and also had struggles in recruiting. Now, with more work in the pipeline, we are in a position to look to grow again. We have begun investing more in our staff, both in recruiting new people and upskilling our existing employees. This has increased the number of projects that the company can be involved in, opening up new avenues for the business and providing it with optimism for the year ahead.”
Commenting on why she’s supporting the Ambition Index, business mogul, investor, mentor and TV star, Sara Davies says: “The last few years have presented numerous, often unforeseen challenges, but I work with some amazing businesses and leaders and have been so impressed by their resilience and how they have adapted. The UK’s SMEs are vital contributors to the economy and to their communities, and I’m genuinely excited looking ahead to next year knowing there is so much appetite for growth and investment, as The Ambition Index shows.”
[2] Calculated using baseline 2023 revenues from ONS data, October 2023