Ambitious SMEs Are Prioritising Talent Investment

Ambitious SMEs Are Prioritising Talent Investment

SMEs are up against numerous challenges when hiring new staff, and a third of SMEs say their number one hurdle is a shortage of necessary expertise among applicants.

New research has shown that SMEs believe the key to growing their business is investing in their workforce.

The study from American Express found that hiring new staff was the biggest decision facing businesses after launching, for almost a quarter (23%) of SMEs.

This came above choosing suppliers (20%) and investing into technology (19%).

The research, conducted in partnership with the Centre for Economics and Business Research (CEBR) and American Express, explored the many challenges SMEs face when it comes to hiring new staff.

Jose Carvalho, senior vice-president at American Express comments, ‘There are many hurdles on the path to business growth and securing top talent is key priority for ambitious SMEs.’

The main obstacle in recruitment, for 35% of SMEs, is a shortage of necessary expertise in their applicants.

Over a quarter (27%) also have concerns about how to fund the recruitment of new employees.

Despite these hurdles, SMEs are still committed to investing into their workforce, with more than one in five (22%) saying if their revenue were to double, their priority investment would be to increase their staff numbers.

As organisations grow and mature, their priorities for investment also change. Medium-sized SMEs said if their income doubled a third (32%) would chose to first invest in new technology.

A further 22% reported their first investment would be into new hires.

Another interesting contrast is medium-sized SMEs reported having greater difficulty finding new employees with the necessary expertise than their smaller counterparts did.

While 35% of small enterprises said the biggest hurdle to hiring staff was a short supply of expertise, this figure increased to 42% for medium-sized firms.

Large firms are not exempt from these obstacles either. Our own research shows that 40% of large companies also say that finding talent is their biggest problem.

Interestingly, the research also uncovered a likely reason why organisations perceive the talent pool as shallower than it may be.

The research showed most organisations only focus on skills, experience and education – or hard criteria – when evaluating candidates.

They aren’t including “soft” criteria as part of the job requirements, such as personalities and behaviours, and are unintentionally shrinking their own candidate pool.

While behavioural drives and motivational needs can be more challenging to identify than hard criteria, they can be a key leverage point for SMEs to tap into a wider pool of talent.

Have you heard the comment “hire for attitude, train for skill”?

What would your priority be if your income doubled?

How is your organisation increasing your talent pool?

We’d love to hear your thoughts, share them with us below!

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