1 out of 4 SMEs in the ongoing labor crisis has less resources

Employee retention challenges have left many SMEs understaffed, according to a new analysis of WorkLife by OpenMoney.

Worklife, more than a quarter of the small companies surveyed as part of its Spring 2022 Small Business Monitor, claims that resources are scarce from a stuffing perspective. Among those facing resourcing constraints, key drivers were employees leaving to pursue new opportunities and better pay and benefits.

Other contributors include financial challenges, labor shortages, declining customer demand, and employees not wanting to return to post-furlough.

As four out of 10 respondents face challenges in retaining employees on a larger scale, resourcing challenges may become more prevalent. Small businesses struggling to retain employees say the main problem is the cost of rewarding employees and incentives in line with their expectations, as well as the idea that competitors are offering more attractive salaries and benefits and lower employee morale.

Also clear indicators are that workers expect more flexible work arrangements after an epidemic, with some respondents acknowledging that workers do not want to return to physical work and that it is difficult to keep employees away from work. One-quarter of companies reported that employees still have concerns about job insecurity, while just under one-fifth cited a lack of understanding of how employees want to be motivated.

It’s not just about retaining employees that can complicate resourcing issues, 28% of respondents point to the challenge of implementing recruitment plans. Among those facing problems, the most notable contributors were finding quality talent with relevant experience, then rewarding employees in line with their expectations, and the perceived inability to provide incentives and pay. One-fifth of businesses are worried about competing with their peers for talent.

Rob Marshall, Head of Product and Proposition at OpenMoney’s WorkLife, comments: While employers are aware of the problems, it is not surprising that spending is seen as a major concern when thinking about their ability to overcome a difficult two years later.

“This strongly suggests that smaller companies need to look for more cost-effective ways to reward employees if they are to hire and retain a team that can help them see the months ahead successfully. – Not calling for financial outlay, but support, flexibility and opportunity that suits employees’ personal needs. “

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