SMEs ditch hybrid work, cite rising costs as top concern
New research indicates that over half of small and medium-sized enterprises (SMEs) in New Zealand have abandoned hybrid and remote working models, choosing instead to return to office-based work. The same study shows that rising costs are a significant concern, with 84.2% of SMEs listing this as their primary business anxiety.
The survey, conducted by Peninsula Group, a leader in HR and workplace relations advisory services, sought to understand the key priorities and concerns for businesses in five countries: Australia, Canada, Ireland, New Zealand, and the UK. It found that business growth, previously the main goal for 58.7% of SMEs, has now dropped to 44.7%. It highlights a tough economic environment, particularly in Australia and New Zealand, where 22.4% and 26.6% respectively state that survival is their main goal for the year.
On a positive note, the UK and Ireland seem to be on a more optimistic trajectory. The survival rate decreased significantly from 38.4% and 34.7% to just 18.8% in both countries. However, staff retention and labour shortages are ongoing challenges for employers, with 41.5% and 45.6% respectively seeing these as major concerns. The research also highlighted the impacts of the cost-of-living crisis and staffing shortages, with 56.3% of employers offering financial remuneration to bolster retention, especially in Canada, where it reached 64.9%.
The study discovered that businesses unable to provide financial incentives have turned to other methods to retain staff. Reward and recognition strategies have surged with a 131% year-on-year increase. However, mental health support is only primarily valued in the UK. Compared to other countries, it stands at 48.7% for the second highest retention aid, an 8% increase from last year.
Amidst the staffing challenges, businesses are becoming innovative. Approximately 46.5% invest in upskilling and training their staff to counteract the ongoing skills shortage. Canadian employers have notably increased their apprenticeship programmes by an impressive 217% in the past year. Globally, such schemes have witnessed a 36% rise. Despite this, recruitment has been listed as the biggest challenge (25.7% of employers), with pay increase requests coming second (22%).
Interestingly, the trend towards a four-day work week has not yet taken root among global SMEs. Only 2.2% have implemented it, with 0.6% having trialled and abandoned it. Instead, 50% of businesses have all their employees in the office full-time. Meanwhile, 14.7% offer flexible working hours, and 10.1% have adopted hybrid work as a permanent policy.
David Price, CEO at Employsure, reflected on the findings, "Despite the tough economic climate, there is an air of optimism amongst small business owners. What's been interesting to see is that recruitment continues to be a struggle when it comes to staffing. Opting for flexible working hours, rather than remote or hybrid working models, has been the top choice to aid employee retention. This shift suggests a need for more collaboration and team engagement, leading to a return to a permanent office-first model, coupled with more flexibility. Employers are seeing the value in retaining employees, who are reaping the benefits of pay raises, upskilling, training opportunities, and flexible working."
