More than a third of SMEs face a shortage of necessary expertise when it comes to hiring new staff, according to a new survey.
The survey from American Express® shows nearly a quarter (23%) of firms state that after launching their business, hiring new staff has been their biggest business decision above choosing suppliers (20%) and investing in technology (19%).
The study, conducted in partnership with the Centre for Economics and Business Research (CEBR), found SMEs face various challenges when it comes to hiring new staff. More than a third (35%) of small businesses report a shortage of necessary expertise among applicants as the main hurdle in hiring. A further 27% are worried about how they will fund the hiring of new employees, highlighting the importance of tight financial management in ensuring a business can bring on staff as the firm grows, whether at home or as they expand abroad.
Medium-sized SMEs reported if their revenue doubled, a third (32%) would invest in new technology first, followed by 22% whose first investment would be new hires. Medium-sized SMEs also reported greater difficulty finding new employees with the necessary expertise. While 35% of small firms said the biggest obstacle to hiring staff was short supply of expertise, this figure increases to 42% among medium-sized enterprises.
When it comes to managing cashflow, SMEs are most likely to worry about rising costs (55%), followed by how to finance future spending (19%). 18% of SMEs worry about how to prioritise their spending across their departments.
American Express says SMEs should consider incorporating hiring into their overall growth strategy, being flexible about hiring budgets because situations change and maintaining a positive cashflow.