[UK] 89% of SMEs can’t match salaries offered by bigger companies

New research has revealed the struggle that the UK’s SMEs have when trying to hire new talent, Business Leader reports.

Talent management platform Employment Hero surveyed 514 SME hiring leaders across a range of sectors. It found they were consistently losing prospective hires to larger multinational organisations. 

The survey’s respondents reportedly included leaders at micro-organisations with less than ten employees and larger organisations with up to 500.

Employment Hero’s research revealed that the average vacancy:

• Cost £3089 to advertise, a 68 per cent increase on the cost in 2022.
• Received 10 or fewer applications.
• Took 31 days to fill.

There were, however, significant differences between SMEs. Smaller businesses of less than ten employees such as cafes and bars typically spent less on job ads and received fewer applications but hired faster.

In addition, government data from the ONS suggests that these hospitality businesses face the highest vacancy rate, with around one in 20 (4.9 per cent) unfilled positions at the end of August.

A consistent theme across the survey was reportedly competition from larger organisations who could offer more generous salaries. A majority (89 per cent) of SME business leaders said they were having trouble matching the salaries of larger organisations while 69% said they struggled to compete with multinationals for talent.

White-collar SMEs in sectors such as insurance and finance were the most at mercy to these multinationals and faced the most acute challenges. These sectors saw more expensive job ads (£5,316), a longer time to hire (46 days), and a higher turnover rate. According to the survey, 17 per cent of new employees left within six months, meaning a newly-hired barista has more chance of remaining in their role for six months than an insurance adjuster.

Ben Thompson - CEO and Co-Founder of Employment Hero - said, “Recruitment isn’t working for SMEs. They are the backbone of our economy but can’t keep up with a hiring environment of increasing complexity and cost, where huge multinational companies can easily outspend them in the race for top talent. We just can’t stand by and watch our small business community, especially those relying heavily on seasonal workers during crucial times like Christmas, lose ground after facing such a tough time through Brexit and the pandemic.

“To tackle this, SMEs have got to play to their strengths in the hiring game, spotlighting what makes them stand out – things like their unique culture, flexibility, and growth opportunities. This requires creating a work environment that’s not only adaptable but also lines up with what employees are really looking for. It’s about giving candidates the chance to really make their mark and have a visible impact on the business.”

Source: Business Leader

(Quotes via original reporting)

New research has revealed the struggle that the UK’s SMEs have when trying to hire new talent, Business Leader reports.

Talent management platform Employment Hero surveyed 514 SME hiring leaders across a range of sectors. It found they were consistently losing prospective hires to larger multinational organisations. 

The survey’s respondents reportedly included leaders at micro-organisations with less than ten employees and larger organisations with up to 500.

Employment Hero’s research revealed that the average vacancy:

• Cost £3089 to advertise, a 68 per cent increase on the cost in 2022.
• Received 10 or fewer applications.
• Took 31 days to fill.

There were, however, significant differences between SMEs. Smaller businesses of less than ten employees such as cafes and bars typically spent less on job ads and received fewer applications but hired faster.

In addition, government data from the ONS suggests that these hospitality businesses face the highest vacancy rate, with around one in 20 (4.9 per cent) unfilled positions at the end of August.

A consistent theme across the survey was reportedly competition from larger organisations who could offer more generous salaries. A majority (89 per cent) of SME business leaders said they were having trouble matching the salaries of larger organisations while 69% said they struggled to compete with multinationals for talent.

White-collar SMEs in sectors such as insurance and finance were the most at mercy to these multinationals and faced the most acute challenges. These sectors saw more expensive job ads (£5,316), a longer time to hire (46 days), and a higher turnover rate. According to the survey, 17 per cent of new employees left within six months, meaning a newly-hired barista has more chance of remaining in their role for six months than an insurance adjuster.

Ben Thompson - CEO and Co-Founder of Employment Hero - said, “Recruitment isn’t working for SMEs. They are the backbone of our economy but can’t keep up with a hiring environment of increasing complexity and cost, where huge multinational companies can easily outspend them in the race for top talent. We just can’t stand by and watch our small business community, especially those relying heavily on seasonal workers during crucial times like Christmas, lose ground after facing such a tough time through Brexit and the pandemic.

“To tackle this, SMEs have got to play to their strengths in the hiring game, spotlighting what makes them stand out – things like their unique culture, flexibility, and growth opportunities. This requires creating a work environment that’s not only adaptable but also lines up with what employees are really looking for. It’s about giving candidates the chance to really make their mark and have a visible impact on the business.”

Source: Business Leader

(Quotes via original reporting)