1 In 3 UK SMEs Struggling With The Cost Of Staffing

30th June 2022

1 IN 3 UK SMES STRUGGLING WITH THE COST OF STAFFING, ACCORDING TO NEW REPORT BY NATWEST RAPID CASH.

New research* by NatWest Rapid Cash reveals the employment challenges facing recruiters and SMEs, and how current and future job market trends are creating new opportunities for employers, and employees.

According to the research, 34% of SMEs are struggling with the costs of staffing. This has led to more vacancies across the job market. 85% of recruiters say businesses are struggling to employ the talent they need, with the challenge starkest in Greater London (92% of recruiters), the East of England (90%) and Wales (93%). The research has also identified that the shortage of candidates is particularly affecting the Healthcare, IT and Technology sectors.

Rising operational costs and a squeeze on cash flow mean that offering higher wages cannot be the sole way for companies to fill their vacancies. Employers and recruiters need to find new ways to attract (and retain) the best candidates.

Health and wellbeing benefits have always been valued by employees. But the post-pandemic shift towards hybrid working has increased the focus on work that fits around people's lives, not the other way around.

Will the four-day working week work?

On Monday 6 June 2022, more than 3,300 workers at 70 UK companies started working a four-day week with no loss of pay. The trial is based around a 100:80:100 model - 100% of pay for 80% of the time, in exchange for a commitment to maintain 100% productivity.

The report's researchers asked recruiters for their views on this new working pattern:

79% of recruiters think the four-day working week will become the norm before 2030

86% of recruiters think the four-day working week is a good thing (employers measured slightly less at 76%)

The top three pros of the four-day working week for recruiters are: (1) happier employees - 80%; (2) more flexibility for staff - 73% and (3) increased employee retention - 56%

But the report has also identified potential issues for employers, as well as a five-year timeframe for a four-day working week to substantially transform the job market:

The top three cons of the four-day working week for recruiters are: (1) having to find cover for workload - 44%; (2) reduced hours might reduce work output - 43% and (3) compression could cost money - 33%

Only 21% of recruiters believe that the four-day working week will change the job market considerably in the next year, but this jumps to 61% if we fast-forward five years


Natalie Kerr, Chief Commercial Director at NatWest Rapid Cash says, "Recruiters clearly see the four-day working week and personal wellbeing gaining popularity among employees. But many businesses are reluctant to provide a better work/life balance due to increased operational costs.

"At NatWest Rapid Cash, we believe the most effective way for SME employers, and recruiters, to meet staffing challenges is to strengthen their working capital. Cashflow is key when it comes not only to staffing but also to having the flexibility to adopt new models of working, and to make the most of growth opportunities.

"NatWest Rapid Cash has been designed for just this, helping businesses improve their cashflow by unlocking capital in unpaid invoices."

The post-Brexit landscape, pandemic, conflict in Ukraine and subsequent cost-of-living crisis have all led to operational challenges for SME businesses. And with a four-day working week predicted to have a significant impact on the job market, it will be the companies with the finances to embrace change that will achieve their business goals.

*Survey carried out by Censuswide on behalf of NatWest Rapid Cash during May 2022 - with a sample size of 500 recruitment agencies, 500 SME employers, 2,000 office workers. The topics discussed include the four-day working week, its effect on the recruitment industry, employee productivity, mental health, standards of living, the UK economy, personal finance, work-life balance, and business finances.

ABOUT NATWEST RAPID CASH
Rapid Cash offers a modern line of credit unlocked by your unpaid invoices, offering greater flexibility and automation than most traditional finance facilities.

Read the full report HERE