The end of the furlough scheme in September will be a watershed moment for the UK’s
smaller businesses. For those facing continued income losses as a result of the pandemic, the ability to recruit and retain high-quality talent will play an important role in the strength of their recovery.
Our latest Small Business Monitor research revealed that 43 per cent of smaller firms are
planning to grow the size of their workforce when the furlough scheme comes to an end, but also uncovered a number of potential hurdles ahead.
In fact, some 17 per cent of SMEs told us they see recruitment and retention as one of the biggest challenges facing their business.
When looking at retaining existing employees, keeping employees engaged remotely was cited as a challenge by more than a quarter of SME decision makers (26 per cent), as was sourcing quality candidates with relevant experience for the organisation (23 per cent).
The cost of hiring and a lack of understanding around how employees want to be rewarded and incentivised (23 per cent respectively) and the cost of doing so with existing employees, in line with their expectations (20 per cent), were also among the hurdles faced.
Digging deeper, it seems competitor concerns could also be coming into play. Two-thirds (66 per cent) of decision makers we engaged with expressed concerns about how attractive they would appear to existing and potential talent when compared with their peers, while the latest data from the Office for National Statistics (ONS) showed that job vacancies had reached a record high across the UK overall 1.
Standing out from the crowd
As we move through the recovery phase, firms wanting to set themselves apart and connect more closely with workers ultimately need to consider where and how they could be providing greater flexibility and support. A positive we can take from these challenges, therefore, is that by and large decision makers seem to be recognising this, and thinking about ways to help their new-look post-pandemic business seem more attractive.
For example, we found that SMEs see flexible working options (19 per cent), help for mental wellbeing, such as how to manage stress (18 per cent), and green benefits (16 per cent), such as charitable donations via salary sacrifice and electric vehicle purchase schemes, as factors that could make a positive difference to the way that they are viewed by staff.
Businesses are also recognising the need for financial support in difficult circumstances, such as in areas such as income protection and life assurance (14 per cent), and better car/home insurance rates (12 per cent). Interestingly, this was on par with more ‘traditional’ benefits like shopping and gym discounts (both 13 per cent).
Financial support – the lowest hanging fruit for employers?
While this broader focus on employee wellness is positive, particularly encouraging is the increased focus on benefits to support financial wellbeing. Poor financial health can have a corrosive effect on a person’s mental and physical wellbeing, which often leads to a knock-on impact on their overall engagement, motivation and productivity at work. In this way, this traditionally overlooked area may well be the one where firms are able to make the most meaningful and immediate difference.
For example, if a firm has had to put employees on furlough or reduced salaries, practical financial support like income protection or critical illness could immediately strengthen an individual’s financial foundations. Meanwhile, adding free financial advice to a core benefits package could provide a vital lifeline to staff struggling with their personal finances, while sending a message that the business values employees enough to help them secure the long-term financial future of both them and their family.
As the seeds of recovery grow further, ultimately it will be those employers who continue to put emphasis on where and how employees need support who are likely to build closer working relationships. This in turn may not only encourage workers to stay and strive to support the company’s recovery, but also inspire new talent to want to join a successful and caring business.
