Overcoming the Growing Pains
Without the people who run them, businesses are just brand names and physical assets. It is talent that drives employment and output in our economy and talent which is the most precious resource.
Today the employment landscape is a challenging environment, employment levels are high and skills are in short supply. The Recruitment & Employment Confederation found that availability of temporary agency workers is becoming a bigger problem with nearly half (47 per cent) of employers believing there will be a shortage of appropriate candidates across all sectors, up from a third (35 per cent) in March. It is not just larger companies that are struggling to hire either.
Our SME Confidence Tracker research found that, during Q1 2018 many SMEs (Small and Medium Sized Enterprises) focused on internal investment, with two-fifths (41%) choosing to invest in training and developing existing employees.
With near-record levels of employment, it is evident that business owners recognise the opportunity in training existing employees during a time of skills shortages across many industries.
Over a quarter (27%) of SMEs told us they are struggling to hire people with specialist skills such as Engineering and IT. Additionally, firms have concerns over losing skilled employees. Almost a quarter (23%) said they have increased wages to ensure that they can retain leading talent within their businesses.
If the UK is to tackle this ever-increasing skills shortage, it requires specialist recruiters that can continuously source and place candidates in required roles. To do this it is vital that such businesses have sufficient cashflow and support services in place, enabling them to consistently deliver for their clients.
The SME recruiters we speak to will often encounter the first signs of growing pains. These are incidents whereby an SME recruiter needs to take on more staff to meet client demand, but their cashflow prevents them from taking on more talent to fulfil demand in the temporary recruitment market.
It is critical for recruiters to get their cashflow under control so that they can scale quickly and meet the demand for talent. Keeping pace with a competitive jobs market is hot on the agenda for recruiters in 2018.
Here are several actions that recruiters can take to be ready to scale quickly:
- Review your cash reserves – do you have a cash reserve? If so, do you know how long this will last if you need to take on more talent to fulfil future client demands? Reviewing your cash reserves can be a good way to plan for growth and enable you to meet payroll obligations on time.
- Commit to making efficiencies – Are you instructing good timesheet practice by taking steps to reduce employees non-billable time? Efficiencies can be made by adopting new software or training staff to use those systems more effectively.
- Act on payroll – Many recruiters will spend precious resources running and managing back office and payrolls. With recruitment finance, SMEs can outsource this to a funder so they can focus on the commercial priorities of their business.
- Review your business plan – When companies grow quickly they can often lose sight of their strategy, as they get caught up in the day to day hustle and bustle of business. It is a good idea to review your business plan and your strategy regularly and check if you are applying it or if the plan needs to be updated. This will make sure you run a business that has a long-term path for growth rather than one that needs to continuously react.
We also have dedicated local teams who can offer you the best financial solutions for your business. Talk to a member of our team today on 0808 2310 865.