The Robert Half 2019 Salary Guide reveals nearly five million1 UK SMEs, the equivalent to four out of every five (82%) small and medium-sized companies, are struggling to attract the skills they need. As a result, many are being forced to offer salary packages higher than originally expected to recruit the right talent.
More than half of CEOs (53%2) admit they can’t find candidates with the necessary skills to help them navigate an increasingly digitalised business landscape. These include data analysis and digital skills, as well as softer skills such as resilience, adaptability to change and critical thinking.
These concerns are set to increase with the uncertainty of Brexit and the potential decrease of skilled talent.
According to the recruitment specialist, this widespread shortage of specialist skills has created a ‘buyer’s market’ for those candidates who possess the key skills in demand. As a result, many businesses are increasing their recruitment investment to secure the right talent, while also preparing for the UK’s exit from the European Union. More than two in five (43%) SMEs say increased remuneration levels have been necessary in the last three years to secure the best quality candidates – more so than large businesses (35%*).
The Robert Half 2019 Salary Guide also found that seven out of 10 businesses are paying more than they initially planned to secure their favoured candidate, as a fast-paced market drives increasingly competitive salary negotiations.
Matt Weston, UK Managing Director at Robert Half commented:
“Technology and digitalisation is rapidly changing the UK business landscape. This, coupled with uncertainty around Brexit, means that businesses must adapt their recruitment strategies to ensure they are equipped with the right talent to keep up. However, the skills desired within certain roles remain specialist and unobtainable without presenting a competitive offer. The skills required is changing at faster pace than their adoption among the mainstream UK workforce, creating a ‘buyer’s market’ for those who possess them. Attracting, securing and retaining the right talent will rely on faster hiring times, flexible recruitment strategies and competitive remuneration packages.”
Pressure on businesses to invest in measures to retain top talent
In order to cope with the intensifying war for talent, companies are investing in training and workplace benefits. Skills development is now a crucial component of job satisfaction. More than three in four (76%) employers said their staff wanted to leave if they were unable to provide them with training. However, SMEs lag behind large companies in the training they currently offer staff (52% versus 68%**) meaning top talent is likely to be attracted elsewhere.
Factoring in recruitment fees, remuneration and onboarding costs such as training, employee “churn” is estimated to cost businesses £30,0003. Many SMEs are investing in softer benefits to increase retention levels – while 39% currently have an employee wellbeing programme in place, over a third (34%) offer flexible and remote working.
Matt Weston added:
“For SMEs, it may be more difficult to compete for a candidate against larger organisations on financial compensation alone. However, by considering their long-term talent pipeline, SMEs are able to compete on non-salary benefits, career opportunities and responsibilities of the role. SMEs have an opportunity to show employees they are valued members of the workplace. While salary will always be an important factor, offering people ways to work happy will be vital in the war for talent.”