That equates to half of the country’s working population. The impact of SME sentiment and strategy around hiring on the UK labour force and economy as a whole therefore can’t be overlooked. Fortunately, new research from American Express, conducted by Oxford Economics, has shown that UK SMEs feel confident about their hiring ability over the year ahead, despite today's challenging business environment.
The research, carried out annually among senior executives and decision-makers in SMEs across 15 countries, shows attitudes towards talent retention are shifting. Investing in employee training and development, and demonstrating a commitment to ethical and social values, are perceived by SME leaders as more important focuses for attracting and retaining talent than they were in previous years.
Almost two thirds (61%) of UK SMEs are confident about their hiring ability. They deem themselves to be particularly effective at developing skills and retaining talent compared to their competitors. Confidence levels are higher than the global average of 53%, but also marginally lower than last year when 64% of SMEs were of the opinion that they did well at this.
Unsurprisingly, offering a competitive salary remains a key driver for the UK’s SMEs. Nearly one in three (29%), consider it to be the most important means of improving skills, culture and talent in their organisations today. But financial compensation is not the only factor at play. SMEs also recognise the draw of providing their workforce with comprehensive training and development programmes, with 23% considering this important to improving skills, culture and talent - second only to salaries.
Interestingly, offering incentives for long term service is no longer deemed to be such an important factor for improving skills, culture and talent – perhaps reflecting the increasing number of freelance and flexible workers comprising the UK’s workforce. In the long term, offering a competitive salary is still considered the best way to retain and attract SME talent. Equally, providing benefits such as free food and travel are also perceived to be important for talent retention. When it comes to attracting new talent, SMEs recognise the growing importance of being able to demonstrate a clear business commitment to ethical and social values to their employer brand,
Commenting on the findings, Colin O'Flaherty, Senior Vice President and General Manager of Global Commercial Services UK at American Express said “The role SMEs play in hiring and developing talent is vital to the UK economy. Despite operating in turbulent times, and facing fresh challenges for the year ahead, the optimism and focused resilience shown by the country’s SMEs in their outlook and attitudes towards hiring is hugely encouraging.”
1 Federation of Small Business – UK Small Business Statistics