Small businesses set to be swamped with almost £23 billion in recruitment costs alongside cost of living crisis according to latest research from Westfield Health.
Key Findings:
SMEs will be hit by surprise recruitment costs, with £22.5 billion needed to replace the 7.5 million small business workers looking to move roles
Replacing staff will cost UK businesses a total of £41.9 billion as well as battling soaring energy and running costs
While job satisfaction is high among UK workers, nearly half (46%) are still considering changing jobs
The latest research conducted by Westfield Health reveals that 46% of workers across the UK are considering moving jobs, resulting in a potential £41.9 billion cost to businesses. Small businesses will be overwhelmed by the cost of talent, with recruitment costs hitting £22.5 billion.
Despite this, more than three-quarters of workers (76%) said they were either satisfied or very satisfied with their job. These findings demonstrate that businesses unaware of the exodus coming their way may struggle to retain talent, even when improving their employees’ job satisfaction. This is going to hit SMEs particularly hard who will be faced with mammoth unplanned recruitment bills alongside fighting soaring running costs.
Commenting on these results, Dave Capper, CEO at Westfield Health, said: “Even though our research reveals the good news that many employees are happy at their current job, a worrying amount of people are still considering leaving.”
“The average cost of hiring someone new is around £3,000. Coupled with the cost-of-living crisis, struggling with retention of workers could have a big impact on businesses, especially if the UK heads into a recession. SME leaders are facing huge financial challenges as it is, pair this with further unexpected recruitment bills and there’s a real cause for concern.”
The research also shows that whilst around half of workers don’t have a preference (53%), more than a third (34%) say they’d prefer to work for an SME with fewer than 250 employees. Smaller businesses are seen to lead the way when it comes to particular perks, with over a half stating working at an SME gives them better contact with senior leaders (60%), maintains a good workplace culture (48%) and allows them to have a better work-life balance (35%).
On the other hand, larger businesses with more than 250 employees ticked the more traditional benefits. In general, employees stated that working at a larger business offers better salaries (40%), career progression (44%) and physical health support (51%). However, working at a bigger organisation may come at a cost, with those working at larger businesses taking, on average, more sick days off per year compared to those working at an SME.
Dave expands: “Those working for bigger organisations tend to note salary and career progression as key benefits – both of which help toward talent retention. They’re also more likely to have wellbeing benefits, however a key part of keeping employees happy is looking at the overall context these perks are provided in — the culture of an organisation.
“Our research shows that those working at SMEs enjoy the fact that their company has a better workplace culture and a more tight-knit community within the business, something which is much harder for large companies to change and get right.”
“There’s a David and Goliath battle for talent on the horizon where smaller businesses have a real opportunity to play to their strengths and use these qualities to attract and retain talent.”
“For SMEs looking to attract top talent away from large businesses, prioritising company culture and bridging the benefits gap with small investments in key areas, like mental health support, could be the key to recovering and thriving in the post-Covid economy,” said Dave.
Prioritising People And Perks
Due to limited resources, SMEs need to be smart when considering investments in their company – especially during financially testing times. When looking to bridge the gap between the perks of working for a larger organisation and an SME, businesses will need to invest strategically in benefits that meet employee expectations, deliver ROI and play to their strengths.
Dave adds: “We already know that wellbeing is strongly linked to workplace culture. Our previous research showed that 85% of people say there’s a link between wellbeing and workplace culture, meaning investing in your people’s wellbeing has a strong, positive impact on your business.”
Capitalising on culture could be the strategic move businesses need to retain top talent and avoid heavy recruitment costs: more than half (64%) of employees say they would leave their job if the workplace culture did not fit.”
“Knowing that people are satisfied at work but are still willing to leave is troubling for employers – especially SMEs that are already fighting against inflation and increasing costs.”
“To avoid the potential exodus of workers and soaring hidden recruitment costs, businesses will need to prioritise the benefits that matter most to employees, such as creating a great culture through wellbeing support. Not only will it help with employee retention, but it will also make a lasting impact on employee health and performance, delivering tangible business benefits,” concludes Dave.