Brexit related uncertainty is continuing to create headaches for SMEs up and down the country, but it is recruiters who are feeling the pinch more than most. The latest ONS figures showed they are having a contend with an increasingly rigid labour market, with unemployment inching up just 0.1 per cent during Q3 2019.
While unemployment remains low, our Q3 2019 SME Confidence Tracker shows access to skilled employees continues to present a challenge for SMEs with 13 per cent saying it was the biggest challenge they faced. To meet the challenge, SMEs are focusing on upskilling their existing workforces and over a third (34%) have invested in staff training over the last quarter.
SMEs’ attitude towards recruitment has been muted. Just under a quarter (23%) invested in these services last quarter, mirroring similarly low figures from this time last year (24%). This low-key attitude looks set to continue, with just a fifth (20%) intent on an employment drive during Q4.
Reasons to be cheerful
Despite this relatively uninspiring national outlook, SMEs in the North East are giving recruiters a reason to be cheerful. Almost half (49%) of the region’s SMEs are expecting sales growth in the next quarter, which is translating into a mass skills and recruitment drive. The Open University’s Business Barometer found that the region has long struggled from an ill-equipped workforce. In 2018, 85% of the region’s businesses said they had difficulty finding suitable candidates, however this shrunk considerably to 65% in 2019.
This sentiment is reflected in what SMEs are telling us, in terms of where they are channelling their efforts to develop their business. Exactly half of the region’s SMEs invested in staff training in the past quarter, while almost two-fifths (38%) invested in recruitment in the same period, compared to less than a quarter (23%) nationally.
They are also displaying admirable commitment to expanding their workforce over the next quarter (30%), where SMEs typically put the brakes on hiring as the end of the year looms. Indeed, the upcoming general election will ensure this is no typical end to the year.
Finance solutions for an uncertain 2020
Businesses will be wary of drawing up extravagant 2020 plans given the range of economic scenarios the UK may find itself in over the next 12 months. SMEs should be looking to Recruitment Finance to help them operate more flexible recruitment policies to navigate these potential pitfalls. Recruitment funding is ideal for protecting cash flow if you need to pay temporary workers and contractors while waiting for your invoices to be paid.
Like those in the North East, SMEs should be intent on reducing the number of square pegs in round holes in their workforce. It is critical they take advantage of the bespoke cash flow support provided by the likes of BFS to help deliver consistent results.
Read the full Q3 2019 SME Confidence Tracker.