Growing a business is as complicated as it gets but, what's even more complex than that is maintaining a positive growth while competing on a global stage with new challenges.
According to the Department for Business, Energy & Industrial Strategy, 99.9% of the UK's 5.7 million businesses are small or medium-sized businesses (SMEs) at the start of last year. Which means that only 0.1% of UK enterprises employ over 250+ employees and out of all the SMEs, 60% accounts for private-sector jobs in the UK – totalling to about 16.3 million roles across the country with a combined annual turnover of £2 trillion.
That said, in terms of death rate, Merchant Savvy reported an average of 11.6% of business closures in each trading year, equating to almost 328,000 failings on an annual basis. Given the extent of these figures, it's crucial that businesses understand the challenges and find viable solutions that will reinvigorate business strategies. Based on the results of our client survey, here are the three challenges that UK enterprises commonly face and how they can be addressed to future-proof your business' performance:
Problem 1: Attracting and recruiting talent in a limited pool
In competitive sectors like rail, automotive, construction/infrastructure, electronics and renewable energy, businesses have reported a significant skills shortage that heightens an already high vacancy rate. The unique scenario on hand is that enterprises are struggling to scale the team to meet the manpower needed to execute projects.
Workers in these select disciplines are in such high demand that they now have the upper hand when it comes to selecting and accepting offers. This hinders not only the planning and growth in these sectors but creates a slow flow of business in an otherwise booming market. Enterprises who are undermined by the lack of new talent must initially work towards accurately identifying areas of employment that are the most difficult to recruit and find means to tackle this issue.
Businesses facing a scarcity of talent in their markets can look to the talent pool in a relevant sector and take advantage of the available expertise. Deloitte and the Manufacturing Institute’s Skills Gap and Future of Work study has already found that 66% of skilled workers are ready and willing to move from one organisation to another for higher pay or signing bonuses. As such, automotive companies can look to attract workers in the aerospace market and the rail industries can look to highways and etcetera by offering either better pay or signing bonuses to bridge the gap.
Problem 2: Retaining workers and maintaining the reputation
Retaining hired talents in organisations is the second most common business challenge in competitive sectors and, it's easy to see why. Businesses that formerly face a skills shortage typically fail to create an adequate employee engagement strategy that will address retention issues. And this is often due to a slight oversight in the fact that the same reasons why and how they attract workers from another organisation or industries are the same factors that will result in the loss of talents within their organisation – from pay to flexibility and even misalignment of skills and duties. The increase in competition for specialist skills particularly in fast-growing industries will present a complex challenge and opportunity to forge a new, dynamic HR strategy that retains talent.
To combat low retention rates, enterprises should inspect internally and work towards building a longer-term strategy that influences a more positive employment future. One of the ways to do so is by creating a sustainable and engaging HR-to-Talent ecosystem.
The traditional employer-employee relationship is rapidly changing and, workers in competitive job market sectors are increasingly expecting a variety of benefits, structure and potential so incorporating a more dynamic approach will be a step in the right direction to retaining talents. For enterprises that are unsure of the reasons why or how should seek consultations for strategic advice to stay ahead in the market.
Problem 3: Issues with the internal hiring process
Whether it's hiring at scale or not, enterprises with a rigid or more traditional hiring structure are reportedly failing to fill vacancies with quality workers. The lack of support, specialism and resources available has meant that hiring managers are spending too much time on various tasks and not enough time dedicated to screening or interviewing potential employees. In most instances, this is inhibiting growth and delaying the delivery of projects which ultimately affects revenue and business performance.
Businesses in competitive sectors should take a greater analytical-based approach where talent is sourced. The volatility of the job market combined with the shortage of expertise in select industries mean that HR executives will need to apply the same discipline used in business forecasting to successful source or hire the talents.
Particularly in some fast-growing market with an increasingly maturing workforce, organisations will have to rethink traditional employment relationships and stance to attract the younger generation of workers – from delivering an exceptional candidate experience to hiring a diverse workforce and managing a consistent, positive employer brand – companies must leverage all means to achieve better outcomes. The other way to effectively address hiring issues is, of course, seeking expert guidance from recruiting professionals.