Jan Chmiel explains why talent management will be a more pressing issue than Brexit for SMEs over the next year.
Talent management tops Brexit when it comes to the main concerns for UK SMEs over the next 12 months. While hiring and retaining the best people is often one of the biggest challenges facing entrepreneurs, it has been compounded by an ageing workforce and the return home of many EU citizens in the wake of the Brexit vote.
According to the Recruitment and Employment Confederation (REC), the shortage of staff for British employers worsened in July, with UK businesses not just struggling to hire the brightest and the best but also people to fill roles such as chefs, drivers and warehouse workers. These findings are endorsed by Vistage members in our recent UK SME Confidence Index. We researched SME business leaders and this study revealed that talent management will be a major challenge for half of SMEs over the next 12 months. This includes hiring, retaining and training employees.
Figures from the Rowntree Foundation show that this could be a growing problem over the next seven years. Their research shows that 14 million employees are expected to retire but just seven million people of working age will enter the market, leaving a seven million deficit. Insight from our members in the engineering sector reveals they are also facing a crisis on the skills front. In fact, if they can’t recruit easily from the EU and overseas British business will become less competitive and unable to grow.
While SME business leaders are confident that their sales will increase over the next 12 months, if they can’t find and retain the right people they won’t be able to take their businesses to the next level.
With employment high, the market will become even more competitive, which means business owners will have to offer new packages with salaries above current levels to entice candidates through the door. Employers will also have to find more innovative ways of targeting people that aren’t looking to move jobs such as flexible working, job-sharing, parental leave during the school holidays and share ownership schemes.
While productivity and profit will always be central to business success, our Vistage members claim that ensuring a healthy work-life balance for them and their teams is becoming increasingly important. Successful SMEs recognise the value of having employees who feel fulfilled in life beyond success at the office. It leads to a happier workplace where employees are less stressed, think clearly and make better decisions.
Promoting work-life balance needs to be included in leadership development programmes but not as a one-off, it needs to be part of the business day so that both SME business leaders and their teams adopt good habits.
Here we recommend that entrepreneurs lead by example. If they adopt a good work-life balance routine the rest of the company are more likely to follow. Many of these practices can be easily adopted such as working from home, reduced hours over the summer period and paying for gym membership or cycle purchase schemes.
Certainly, over the last few years there is an understanding among Vistage members that their employees are looking for more than just pay rises and this will become more important in the battle for talent.
In future, companies that effectively attract the best people will be most likely to succeed both at home and internationally. As Steve Jobs of Apple once said: “The secret of my success is that we have gone to exceptional lengths to hire the best people in the world.”
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