bird cloud silver image credit pixabay/cocoparisiennePeninsular Group, the HR and health & safety services firm, has published findings from a survey of over 79,000 SMEs from five of the countries it operates in. Employer respondents in Australia, Canada, Ireland, New Zealand, and the UK answered questions about their concerns and trends for the year ahead.

The survey asked six fundamental questions.

  • What are the top concerns for employers in 2024?
  • What are employers’ top business goals for 2024?
  • When it comes to staffing, what challenges are employers facing right now?
  • What support are employers offering to aid retention?
  • How have employers handled the ongoing labour/skills shortage?
  • How many employers are still offering hybrid/remote working?

Headlining the results was that 84.2% of SMEs see rising costs as the top business concern. This outstrips labour shortages (45%) and employee retention (45%). The results from the different countries were broadly the same. With the UK having the greatest concern about rising costs (87%) and Canada the lowest (82%). Australian employers were the most concerned about labour shortage (53%) and retention (45%).

Amongst those rising costs are pay rise requests, cited by 28% of Irish respondents as their biggest challenge. It is a familiar issue linking retention and recruiting top talent. If you pay more to recruit top talent, other employees will demand more, not just in the firm that recruits but also in the firm they were recruited from.

Alan Price, Peninsula Group Chief Operations Officer
Alan Price, Peninsula Group Chief Operations Officer

Alan Price, Peninsula Group Chief Operations Officer said, “Despite the tough economic climate, there is an air of optimism amongst small business owners as we move into 2024. Compared to this time last year, while recession remains a top concern, it’s been overtaken by rising costs – unsurprising given the ongoing cost-of-living crisis, conflicts in the Middle East and Ukraine, and soaring interest rates.

“Employers feeling the financial pinch are turning to reward and recognition and enhanced benefits instead of financial remuneration to aid retention in tough economic times. Here in the UK there is concern amongst small business owners around the affordability of pay raises, with a huge jump to National Minimum Wage and National Living Wage due in April.”

Looking forward

Despite the concerns respondents are positive about the year ahead. With 44% aiming for business growth as their main business goal, and 20% are focused on survival. What isn’t clear is what the remaining 40% are focused on. It might have been useful to understand what the options for this question were. Are the remaining 40% looking to maintain the status quo (is that survival?), sell the business or something else?

The survey seeks to identify how employers will meet the retention challenges in 2024. In Australia and New Zealand (both 58%), flexible working is used as a lure to attract and hook to retain talent. In Canada (65%) and the UK (49%), employers prefer financial remuneration.

Pay increases are broadly used to help retain staff, with Canada (80%) and British employers (53%) the highest and lowest responses.

The days of hybrid working, first seen en masse in the pandemic, appear to be broadly over. Only 15% (the highest) of British employers have made hybrid working a permanent feature. Canada (5%), Australia (7%) and New Zealand (5%) have broadly insisted that all workers return to the office. What the survey didn’t appear to ask is how hybrid differs from flexible working; the latter, it seems, has remained, though there was no analysis of this.

Price continued, “It’s also interesting to see that the majority have returned to the office full-time. While hybrid working is likely to remain for some businesses, this signals a behaviour shift that we can see reflected in the number of job vacancies listing a permanent office-first working model as a requirement.

“It’s clear that this will be a tough year for many businesses, but there is also a mood of opportunity. Employers are seeing the value in retaining employees, and, in turn, employees are reaping the benefits. More than half were given a pay raise, and employers are looking at creative ways to retain employees, such as upskilling and training opportunities or flexible working where a pay raise is not possible.

“As January starts – traditionally the time of year when most people look for new jobs – it’s no surprise that business owners are looking at ways to upskill and retain their own employees, rather than having to spend time and money recruiting.”

Enterprise Times: What does this mean

There are some interesting results from this survey, though the question set appears to be limited in scope and does not allow a more detailed analysis. The apparent lack of responses from an employee perspective also makes it slightly unbalanced in terms of seeing what really matters to them. Is flexible working and even hybrid working important? Will there be a backlash for those companies not offering hybrid working?

The findings also contradict a survey by the Chartered Institute of Personnel and Development that published survey results in May 2023. It found that 83% of UK organisations have hybrid working in place, with 45% having a formal policy around it. Flexible working is not just popular, but legislation will make it possible for employees to request flexible working twice within twelve months, and employers cannot refuse without consulting the employee.

2024 looks like another tough year, despite the optimism, as inflation still has an impact across the business landscape and in the pockets of employees.

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