SMEs feeling the squeeze with rising costs the top concern for 84.2% of global businesses heading into 2024: Peninsula Group reports

MANCHESTER, England, Jan. 3, 2024 /PRNewswire/ -- According to a new survey, 84.2% of SMEs list rising costs as their top business concern.

Peninsula Group conducted a survey of 79,000 SME's across 5 countries – Australia, Canada, Ireland, New Zealand, and the UK – to see what the top priorities and concerns were for employers in 2024.

The global survey revealed:

• Growth is the main business goal for 44.7% of SME's; a significant drop from 58.7% this time last year, reflecting the tough economic environment faced by businesses around the world. Australia and New Zealand appear hardest hit, with 22.4% and 26.6% respectively listing survival as their main goal for the year.
• It's more positive news for the UK and Ireland, however, with just 18.8% in both countries listing survival as their top goal, compared to 38.4% and 34.7% respectively a year ago.
• Rising costs are the top concern for 84.2% of all businesses, while staffing continues to be a big issue. Labour shortages came in second highest at 45.6% with retention in third place at 41.5%.
• The cost-of-living crisis and staffing shortages are having a significant impact, with 56.3% of employers offering financial remuneration to help retention. Canada ranked highest here, at 64.9%.
• Those who are unable to give financial incentives are turning to reward and recognition to aid retention; this saw a huge 131% increase YoY. While mental health support was highly valued in all countries last year, this year it's only in the UK where mental health is the second highest retention aid, with 48.7% of employers continuing to offer it - an increase of 8% from last year.
• Employers are also getting creative as they look to offset the ongoing skills shortage with 46.5% investing in upskilling and training their existing staff. Apprenticeships are also on the rise, with a 36% increase globally. Canadian employers especially are turning to apprentices with a massive 217% increase YoY. 25.7% of employers list recruitment as their biggest challenge staffing wise, with pay increase requests coming in second at 22%.
• In terms of working patterns, despite all the headlines surrounding a 4-day work week it's clear that this is not a reality for many businesses. Only 2.2% of SMEs globally have moved to a 4-day working week, with a further 0.6% having trialled it and found it did not work for them. Instead, 50% of all employers say that their employees are all in the workplace full-time, 14.7% have flexible working hours, and 10.1% have made hybrid working a permanent policy.

Peninsula Group Chief Operations Officer Alan Price says "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.

"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."

Notes to editor

Full survey data and more information is available HERE

About Peninsula

Peninsula protects employers across the globe with employment law, HR, and health & safety services.

From small start-ups to well-known brands, we support tens of thousands of businesses with HR and health & safety. Business owners reduce their legal risk and save time with our expert advice, documentation, and more.

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