Investing in staff is the secret ingredient to grow a business, say UK SMEs.
New research has found when it comes to growing their business, SMEs believe investing in their staff is key. Nearly a quarter of firms state that after launching their business, hiring new staff has been their biggest business decision, above choosing suppliers and investing in technology.
The study, conducted in partnership with the Centre for Economics and Business Research (CEBR), found SMEs face various challenges when it comes to hiring new staff. More than a third of small businesses report a shortage of necessary expertise among applicants as the main hurdle in hiring.
A further 27 per cent are worried about how they will fund the hiring of new employees, highlighting the importance of tight financial management in ensuring a business can bring on staff as the firm grows, whether at home or as they expand abroad.
Despite these barriers, SMEs remain committed to staff investment, with more than one in five saying if their revenue were to double, their first investment would be to increase their staff numbers.
As businesses grow in size, investment priorities change. Medium-sized SMEs reported if their revenue doubled, a third would invest in new technology first, followed by 22 per cent whose first investment would be new hires. Medium-sized SMEs also reported greater difficulty finding new employees with the necessary expertise. While 35 per cent of small firms said the biggest obstacle to hiring staff was short supply of expertise, this figure increases to 42 per cent among medium-sized enterprises.
Jose Carvalho, Senior Vice-President at American Express, who commissioned the research, commented: “There are many hurdles on the path to business growth and securing top talent is key priority for ambitious SMEs. Whether expanding at home or globally, business owners are looking for partners that can help them attract and retain staff, whether that’s through payment cards which enable rewards earnt on business spend to be gifted to employees, employee expense management solutions or cross-border payment tools to help ensure companies can smoothly pay employees based abroad. SMEs want hassle free solutions which help ensure they are in full control of their cash flow”.
When it comes to managing cashflow, SMEs are most likely to worry about rising costs, followed by how to finance future spending. 18 per cent of SMEs worry about how to prioritise their spending across their departments.