Over 3/4 small businesses predict growth next year despite cost-of-living challenges
The UK’s small businesses are looking to grow, with nearly 9 in 10 UK small businesses (88%) making plans to hire this year, but 69% of those say it has been hard to fill vacancies, according to new global research from Intuit QuickBooks. What’s more, 68% of UK respondents say they expect it to get harder to hire in the next 12 months, compared with only 48% in the US, as the current skills shortage continues.
Small businesses are facing issues with hiring, including 83% of applicants lacking the relevant skills they need for the job, and many applicants asking for too much pay (78%). In addition, 62% of small business respondents say one or more applicants haven’t shown up on their first day in the last year. Due to these challenges, 89% of UK respondents struggling to hire employees are turning to gig workers, contractors and freelancers instead.
SMBs increasing benefits and pay as much as possible to retain staff, but still forecasting growth in next year
Small business owners’ growth plans could be impacted by the pressure of the cost-of-living crisis on their finances. Over three quarters (76%) of UK small business employees have proactively asked for a pay rise this year, and 91% of these cited inflation when asking, compared with only 63% doing the same in the US.
In response to these pay increase requests, 88% of UK small business owners have increased pay this year. However, they have now reached their max, with over three quarters (78%) saying they have increased pay as far as they can.
Instead, to retain staff, 87% of the small businesses surveyed have expanded their benefits offering, with 67% giving employees flexible work options, 52% giving employees more time off work, and nearly a third (32%) even implementing a 4-day working week for employees. Offering more benefits doesn’t necessarily fix the problem, as 78% of the small businesses say they have offered as many benefits as they can, and any more would be unaffordable.
Despite the economic situation and hiring challenges over three quarters (77%) of UK small businesses predict business growth, with 89% saying they will want to hire more employees in the next 12 months.
Nick Williams, UK product director at Intuit QuickBooks, says: “Despite the considerable challenges with hiring and retaining staff, small businesses remain positive about the year ahead. Everyone is being impacted by the cost of living crisis and small businesses are stretching their budgets as much as they can to help their employees. Now more than ever, small businesses need to make sure their back-office operations are running as efficiently as possible to avoid any costly errors. Having their finances in order can be one thing off their minds, as they look to navigate the challenges and look to grow.”
Jack Moore, partner at Page Kirk says: “Running a small business is challenging at the best of times, not least during an economic crisis. Many of these business owners are bending over backwards to keep doing their best work whilst looking after their staff during these tricky times – but help is at hand. We accountants are keen to act as extra support for them, helping to ensure their finances are in order to allow them to focus fully on the day to day of running their business.”