SMEs focus on staff increases in coming year

More than a third of the UK's small and medium-sized enterprises (SMEs) expect to increase the size of their workforce by more than 10% over the coming year, according to a new survey.

David Sapsted

6 October 2021

The survey of more than 250 SMEs by alternative lender Capify, also found that 41% of the companies put recruitment and/or training as their key business priority.

Wage increases since coronavirus pandemic began

A separate study showed that staff in professional, scientific and technical services – including financial management, scientific R&D and agricultural - had enjoyed the UK’s wage increases since the pandemic began 18 months ago.

Finding new staff the major challenge

The SME survey found that more than a third regarded finding new staff as the major challenge over the coming year.John Rozenbroek, chief financial officer at Capify said, “It’s positive to see UK SMEs putting their staff at the forefront of business strategy, with people and training coming as a top priority for the majority of businesses in our latest survey."People are truly a business’s greatest asset and it’s encouraging to see so many SMEs valuing this in their future plans with clear plans to expand their workforces.“We know that the small business community is resilient and it’s promising to see that many are optimistic about the future, with investment and future growth important priorities.”

SMEs do have concerns, with rising inflation, energy issues and the end of furlough

However, Mr Rozenbroek added, “With the end of furlough, rising inflation and the recent issues around energy prices, it’s no surprise that SMEs do have some concerns to keep in mind.“It could be a challenging 12 months for SMEs in many sectors as margins become tighter – especially if increased overheads need to be managed alongside adding new staff."The study on wages, which compared average salary figures compiled by the Office for National Statistics (ONS) for January 2020 with those in July of this year, found that those working in professional, scientific and technical services enjoyed 11.4 increases – the highest across all UK industries.Average monthly pay packets in the sector had gone up from £2,270 a month in January last year to £2,529 this July of this year, according to research by data analysts N.Rich for software developers Bacancy Technology.

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Highest and lowest UK wage growth?

Though positions in financial services saw only the third highest percentage increase of 10.6% (behind the 10.8% in arts, entertainment and recreation) the sector recorded the highest rise in cash terms with average wages going up from £2,883 to £3,191 per month.At the other end of the spectrum, employees within the accommodation and food services sector saw the lowest wage growth, both in percentage terms and raw financial increases, seeing an average increase below 1%.A spokesman for N.Rich commented, “This breakdown shows a number of interesting facts surrounding the UK’s most lucrative industries for personal financial growth over time."The rising demand for financial guidance, agricultural suppliers and medical research and development over lockdown has clearly impacted the wages received by the employees of these businesses.”