Attracting and retaining the right talent is a vital part of any business strategy. But for SMEs, skills shortages can have a significant impact on operations and growth. What can smaller businesses do to find and fund the right talent for their business plans?
The pandemic changed the way business is conducted and forced many to innovate and adapt their product and service mix. Many SME businesses – famed for their agility – have evolved their business operations to meet the new demands of the fast-changing consumer landscape. As a result of this, identifying the right skills and attributes in the workforce has never been more important.
Despite rising price challenges and slowing consumer spend, Capify’s Q1 2022 Confidence Survey found that 51% of SME businesses expect to grow their headcount in 2022, up 6pp from 45% in Q4. Whilst 14% are aiming for growth of 20% or more. Attracting and retaining the right talent is clearly a major enabler for SME growth, with 48% looking to invest in their acquisition and development of personnel. But in an increasingly competitive labour market, SMEs need to use all the tools at their disposal to recruit and retain the workforce they need for their growth plans.
Adaptability
Workplaces have changed dramatically over recent years, with hybrid and remote working becoming more commonplace in a number of SMEs. Many employees – especially across newer generational cohorts – expect their places of work to support a more flexible approach to traditional working practices. SMEs who regularly review their flexible working policies, will widen their access to potential employees – such as working parents – and increase retention in staff who seek a greater work-life balance.
Diversity, Equality and Inclusion (DEI) has been near the top of the agenda for larger corporates for many years. But for SMEs, especially those in growth mode, embedding commitment to DEI initiatives will ensure you are not excluding valuable talent pools from your recruitment process. Consider partnering with organisations that work with under-represented segments of society to
Clarity and communication
Recruitment can be a significant time drain on SMEs who often don’t have the support of HR teams to support candidate shortlisting and interviewing. Being clear on salary, bonus, culture and role expectations at the start of the recruitment process will save valuable time by avoiding misunderstandings from either party.
You should also be clear on your employee benefits programme and regularly review this with new approaches. These do not need to be costly to the business, but may focus on well-being or social impact initiatives such as charity fundraising. This may give you competitive advantage over other employees and will demonstrate to your existing team that the company is continually thinking about their needs.
Funding growth
There is typically a one to four month period before new staff are assimilated to a company’s workflow and culture. Positive returns on your recruitment drive may only be recognised several months after the costs of hiring new staff are incurred.
But with the majority of SMEs concerned about working capital and cash reserves (REF LINK), how do SMEs ensure they are able to invest in new and existing people and remove this barrier to growth? 47% of respondents to Capify’s Q1 2002 Confidence Survey identify these working capital/ cash flow struggles as the primary driver for seeking external finance.
There are several external options that can help you build your cash reserve without having to take funds away from other areas.
A line of credit or secured small business loan could help you build your cash reserve, for example. However, with many finance providers tightening their lines of credit (INSERT REF LINK) and 52% of SMEs stating that they would not be confident of securing that finance from their traditional banking partners, SMEs might be encouraged to explore alternative or specialist financing options.
Alternative financing methods, such as an unsecured business loan, could be much more suited to funding your recruitment plans. They don’t require you to already have large sums of money in the bank and are much more accessible to UK small businesses.
Short term business loans can be perfect to bridge to bolster any short-term cash flow issues. You can agree a loan term of up to 12 months and, by paying back either daily or weekly, manage the repayment in line with your cash flow. This avoids the business being burdened with a large debt that has to be paid back in sizeable monthly sums. Unlike an overdraft facility, the fees and repayments are fixed and cannot be withdrawn unless you default.
Alternatively, a business cash flow loan could help your business start to build its cash reserve within around 24 hours of application. This short-term cash injection can help fund the initial investment in recruitment until the new hires are positively contributing to your profitability.
At Capify we offer a range of business loans to help support your business through high and low periods. Check to see if you’re eligible for one of our loans with our online eligibility checker. Or, if you’d prefer to talk to a member of our team, we’d be happy to guide you through the process. Give us a call today on 0800 151 0980.
Short term business loans (with a repayment period of up to 12 mth) can be perfect to bridge / bolster any short term cash flow issues, as you can agree a repayment period and by paying regularly (either daily or weekly) manage the repayment in line with your cash flow and not burden the business with a large debt that has to be paid back in large monthly sums. Unlike an overdraft the fees and repayments are fixed and the facility cannot be withdrawn (unless you default)
