The landscape for small and medium-sized businesses (SMBs) in 2024 is marked by shifting priorities and evolving concerns. A recent survey conducted by Peninsula Group across five countries shed light on the challenges faced by 79,000 SMBs in Australia, Canada, Ireland, New Zealand, and the UK.
Shifting Priorities in the Face of Economic Challenges
Growth, which was the primary business goal for 58.7% of SMBs last year, has seen a significant dip to 44.7%. This decline reflects the harsh economic realities faced by businesses globally. Notably, Australia and New Zealand are grappling with survival goals, with 22.4% and 26.6% respectively prioritizing survival in the year ahead.
In contrast, the UK and Ireland exhibit more optimistic trends, with only 18.8% in both countries listing survival as their top goal, marking a substantial improvement from the previous year.
Rising Costs and Staffing Concerns at the Forefront
The survey reveals that 84.2% of all businesses are most concerned about rising costs. Staffing challenges come in second, with 45.6% citing labor shortages and 41.5% expressing concerns about retention.
The impact of the cost-of-living crisis and staffing shortages is evident, with 56.3% of employers offering financial remuneration to enhance retention. Canada takes the lead in this aspect, with 64.9% of employers providing financial incentives.
A noteworthy shift is observed in the strategies employed to address retention challenges. While financial incentives remain prevalent, there is a 131% increase in the use of reward and recognition programs. Mental health support, though valued, sees a decrease in adoption except in the UK, where it remains the second-highest retention aid, showing a commendable 8% increase from the previous year.
Innovative Approaches to Skill Shortages and Recruitment Challenges
To offset the ongoing skills shortage, 46.5% of employers globally are investing in upskilling and training for their existing staff. The rise of apprenticeships is significant, with a global increase of 36%. Notably, Canadian employers stand out with a remarkable 217% increase in apprenticeship programs year-over-year.
Recruitment challenges persist, with 25.7% of employers listing it as their biggest staffing obstacle. Pay increase requests follow closely at 22%.
Working Patterns and the Reality of a 4-Day Work Week
Contrary to the headlines around a 4-day work week, only 2.2% of SMBs globally have made this shift. Additionally, 0.6% experimented with it but found it unsuitable for their businesses. Instead, 50% of all employers maintain full-time in-person work, 14.7% offer flexible working hours, and 10.1% have embraced hybrid working as a permanent policy.
A Positive Outlook for 2024
Raj Singh, CEO at Peninsula Canada, reflects on the findings, stating, “Despite the tough economic climate, there is an air of optimism amongst small business owners as we move into 2024.” He notes a notable surge in employers dedicating greater resources to the development and growth of their staff.
“In 2022, we found that the top concerns were labor shortages and employee retention. Faced with these obstacles, SMBs acknowledged that fostering employee retention was key. By prioritizing the professional growth of their employees, businesses not only mitigate the effects of labor shortages but also cultivate a skilled and motivated workforce.”
“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.”
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