Moving forward, some employers may need to obtain a sponsor licence to recruit the staff they need from abroad. To avoid causing any disruption, especially for key/senior roles, the sooner an employer can get ahead of the process, the better.

Credits: Paida Dube, Employment Solicitor  - DavidsonMorris

Recent researchsuggests that German SMEs are outpacing those based in the UK at an alarming rate; causing a deficit that means if UK workers could catch up to our German counterparts we’d see an increase of £57 billion go back into the economy each year. Such a figure, however speculative, is certainly not to be ignored, so the question must be asked: what could we learn from SMEs in Germany to boost productivity at home?

What has caused such a gap?

Natwest is the company whose research has brought this productivity gap to the fore; they’ve performed extensive research into how German SMEs are excelling in business. The way these firms treat staff has come out on top of a list of areas in which they’re outperforming other countries, including the UK. German companies apparently place workplace culture and employee welfare at the top of their priorities, with employee benefits packages and rewards for good performance proving to have a substantial positive impact on productivity.

Moreover, it is apparent that not only are UK businesses falling behind our European brethren in revenue but that productivity levels in the UK have dropped in the first quarter of the year by 0.5% - a not insignificant amount.

How could we improve?

It’s important not to see this production gap as a negative, but instead use it as a way to learn how we can improve from a country which has proven time and again to be the most productive in Europe. Though many companies can’t see a way to change, there are certain things we can do to ensure we boost productivity.

Research suggests that the focus of UK economy and government remaining firmly on other tasks - such as sorting out the best deal possible for Brexit - has put pressure on UK business which is taking its toll on productivity levels. Some have speculated that endlessly changing stories about Brexit provide an unwanted distraction for an otherwise productive workforce.

Investing in workplace culture and introducing and prioritising measures which boost morale should be immediately adopted. Investing money in areas of the business, perhaps by securing a loanfrom money experts like GIC capital could also be a massive boon to SMEs throughout the UK. 

GIC Capital is a fantastic source of advice on how SMEs can improve production rates. Find out morehere.

One of the biggest challenges facing SMEs is always finding the right staff to add to the workforce. It’s a perennial issue and something that businesses in every sector deal with. The right employee can add enormous value to a business, whilst the wrong choice can have serious impacts on smaller businesses.

With new figures  revealing a paucity of workers, with Brexit further impacting the numbers, what does this all mean for SMEs?

Employment is High

Employment numbers in the UK currently stand at their highest for nearly half a century – which is when records began, so this high is indeed a historic one. This is great in general terms for the economy and the workforce, but it also leaves SMEs with a much smaller candidate pool to source talent from.

34 percent of SME bosses revealed that they simply cannot find the right people to fill the vacancies they have. When surveyed, the main reasons bosses gave for this struggle were these: perceived lack of job security, absence of name recognition and a lack of perks to offer in contrast to bigger companies. Many bosses also pointed to the Brexit factor.

Brexit

The Office of National Statistics has borne this out. Their figures show that the European workforce in Britain has declined by 28,000 in a year. For SME employers, this means a scarcity of European talent, many of whom have the skills they need.

It’s a complex process, but there are concrete factors playing into the leaving of European nationals. The UK economy is recovering in fits and bursts, but not on a solid upward trajectory. At the same time, economic recovery in various EU nations is making the prospect of home seem much sweeter to many European workers in Britain. Playing into this is the mental aspect of Brexit. Many European nationals have found the political climate very different to when they first arrived in the UK and, as such, feel more comfortable returning to their home countries or other EU nations.

A Tightening Labour Market

With more people in work than there has been for 46 years and a loss of European candidates, SMEs are facing a labour market that simply doesn’t have the workers to give.

Access to skilled, talented employees is vital for SMEs to grow and thrive, so where are they going to get the manpower they need? One solution is government reform. Changes to the Tier 2 visa would enable more SMEs to find the talent they need internationally. Aside from this solution, SMEs are going to have to get creative and proactive in finding the right candidates, emphasising their future potential and current benefits. 

Moving house is often described by those who have experienced it as the most stressful time during their lives. The upheaval of your life and the need to pack up all your belongings and sometimes, relocate to a completely different part of the country, is understandably, a fairly hefty challenge.

Despite this, it hasn’t stopped people moving home throughout their lives, either to upsize, downsize of relocate for a new job. That is, until now. A recent study that was based on census data over a 40 year period has revealed that both renters and homeowners are much more likely to stay put than they were during the 1970s.

So, what is driving this resistance to relocate?

The research seems to have revealed a pattern of social change and seems to further indicate a slowing down in social mobility.

A fall in upsizing and downsizing

Back in the 70s, it was much more common for people to progress in different directions on the property ladder. That is, either moving up it to bigger and better housing or in a downward direction by downsizing. During the 70s, 55% of people would move over the course of a decade, but by the 2000s this number fell significantly to 45%.

An aging population

There is also speculation that a fall in the number of people choosing to move house and relocate could be thanks to an aging population that continues to grow. Considering the fact that people now live, on average, for a decade longer than they did during the 70s, this conclusion would seem to make sense.

The lack of affordable housing

It’s no secret that the UK is currently being blighted by a severe lack of affordable housing, something that the Prime Minster is desperately trying to address. With house prices continuing to rise also, there is much less choice and availability for those with dreams of relocating, causing many people to choose to stay put.

Job insecurity 

There is certainly more than one factor contributing to a rise in job insecurity in the UK. The rise in automation, the uncertainty of Brexit and the pressure for businesses to remain productive in an ever-changing economic landscape are just the tip of the iceberg. Feeling insecure in job roles could be contributing to people staying in their homes and commuting longer distances instead of relocating for work. 

The impact of Brexit is far-reaching and is likely to negatively impact on a number of industries, one being hospitality. 

At present around 3 million EU nationals work in the hospitality sector in the UK and the changes that are set to take place could impact on legislation as well as individual’s right to work.

The current situation

Out of the 3 million EU nationals that work in hospitality, 700,000 are based in London, which is the equivalent of 1 in 7 jobs in the capital. When you compare these figures to the UK workforce as a whole, it becomes apparent that the hospitality sector is much more reliant on EU nationals than other industries. 12.3% of the UK hospitality workforce is composed of EU nationals, whereas the national average is much lower, at just 6.9%.

The hospitality industry relies on these EU nationals to help sustain growth and it is likely to be impacted by changes to legislation, which would mean that the flow of workforce would be restricted or would mean that those already employed would need to leave thanks to changes in legislation and contracts.

So, what can businesses within the hospitality industry do in order to continue to grow and succeed in light of Brexit changes?

Buckle down with training

It is already apparent that Brexit is going to result in a serious skills shortage and gap, so in order to remain competitive, hospitality businesses will need to invest in training members of staff that they are able to hold on to. Businesses should consider the merits of in-depth college courses for long-term employees.

Removing negative perceptions about the industry

One of the main issues that has blighted the hospitality sector over the years is the negative perception about the industry. Many deem it be full of zero hour contracts with long hours and poor rates of pay. Businesses should focus on promoting the potential for long-term and fulfilling careers by offering graduate schemes and paying more attention to creating a positive company culture.

Creating working partnerships

In order to remain successful, the hospitality industry needs to consider how teaming up with colleges and universities for working partnerships can help them to remain relevant. Government support will also be needed in the form of incentive-led schemes, enabling those who have been unemployed for a long time to return to work.

The collapse of Carillion, a major British multinational facilities management and construction services company, has highlighted some major downfalls within the UK construction industry and has even led to a report being published by Constructing Excellence, revealing that 43% of construction firms prioritise immediate financial goals over organisational resilience.

So, what else have these reports revealed about the financial situation of construction firms and what steps can be taken to improve it in terms of building better financial models?

The findings

The reports revealed that senior business managers and executives within the construction industry highlighted a number of financial issues as being detrimental to their business goals, including inadequate budgets, insufficient senior management focus on resilience and a lack of skills or knowledge related to ensuring business continuity could be achieved.

At present, the construction industry is a major player within the UK economy, contributing £138bn in value added to the UK economy and employing 3.1 million people, which equates to 9% of the total UK workforce.

With the uncertainty of the UK economy still a present issue, what can leaders within the construction industry do to remain on top?

Embrace the benefits of new technology

Providing staff with new technology will ensure that the industry remains dynamic and will also help with boosting productivity and efficiency. For example, 3D BIM modelling can help with project planning and also material acquisition.

Listen to your staff’s needs when it comes to training

If you want to improve your company’s credentials, it’s important that you listen to the people that are working for you and adjust your training accordingly.

Manage your client’s expectations 

With large construction projects, it’s inevitable that there are going to be setbacks and areas of tasks that don’t go exactly according to plan. Because of this, it’s important that you set realistic timeframes and expectations with stakeholders before going ahead with a project.

Planning is everything

It might sound fairly obvious and rudimentary, but effective planning is crucial to businesses that are operating within the construction industry. A good place to start with planning improvements would be to look retrospectively at other projects that you have completed and consider what could have gone better in terms of planning. 

The impending doom of Brexit is still hanging over many SMEs heads, particularly with regards to expanding and trading globally and boosting profitability.

Recent figures released by accountancy firm Moore Stephens have revealed that only 6% of SMEs that were polled felt that the government is listening to and taking on their concerns about leaving the EU.

This statistics suggest that the Government have their work cut out for them when it comes to convincing SMEs that leaving the EU will be beneficial to them.

So, what are the benefits and drawbacks of leaving the EU for SMEs?

Benefits

The chance to expand into more vibrant marketplaces

Some think that Brexit will enable UK businesses to diversify into make dynamic markets operating outside of the EU. In China and India for example, growth rates are still strong and significant even despite recent slowdowns in trading.

More talented workforce

Brexit could help your business in terms of accessing a wider and more talented staff pool. At present, the freedom-of-movement obligations mean that there are limits on non-EU immigration. Liberating these obligations could mean that it would be easier for your SME to recruit high-calibre staff from non-EU countries.

A reduction in red tape

A lot of the EU regulations that are currently in place burden SMEs, particularly in terms of time consuming bureaucracy that can impede on innovation and growth. Leaving the EU may mean that the government is in a position to roll back some of these regulations.

Drawbacks

Slowing down of trade within the EU

Membership of the EU means that UK SMEs can export to Europe easily and the lack of import taxes also allows businesses to operate at the same level as companies across the Continent. Leaving the EU would negatively impact on both of these factors.

UK investment

There is speculation from those who are against Brexit that leaving the EU could damage the UK’s reputation as one of the world’s leading financial centres, which could in turn result in a decline in UK investment across the board.

The economy and jobs

Figures from 2000 have revealed that around three million UK jobs are linked to trade within the UK. Exiting from the EU may mean that SMEs will struggle in terms of a lack of EU residents moving to the UK in pursuit of work.

While there is still uncertainty surrounding whether we will have a hard or soft Brexit, it is important that SMEs prepare whatever the outcome is in 2019.

It’s impossible to know what the best course of action to take is because the overall decision is still unknown, but making small changes can help SMEs to stay prepared. Read on to find out more.

Consider a hedge fund

The sterling has already dropped in value, something that many businesses are feeling the effects of. While it has been beneficial for exporters, it has meant an increase in costs for importers. As Brexit negotiations continue, exchange rates could fluctuate even more and businesses will need to come up with ways that they can manage this risk. Hedging products that are considered complicated by traders is one resolution, as is creating a foreign currency bank account, which should help to manage the risk of changeable exchange rates.

Negotiate with suppliers for flexible contracts

If your SME works with suppliers on the continent, it may be beneficial to you to think about negotiating more flexible contracts with them before you make any decisions. If you don’t do this, you may find your business in a less than desirable financial situation if currency movements shift in the wrong way. Tariffs and custom duties might also be applied, which could mean you’d have to fork out even more money. 

Reconsider grant funding strategies

There is still a lot of uncertainty with regards to the continuation of EU grant funding, however, advice from Government is that businesses should continue to apply for these until more is known about how these types of grants will operate in the future. In the meantime, organisations can assess whether UK grants are available and can monitor how these develop. For SMEs it is also worth looking for new domestic opportunities that might arise post- Brexit. 

Unfortunately, it is still impossible to know what the future holds for SMEs regarding Brexit. Some are concerned about the implications while others are not. Either way, preparing for the worst-case scenario will help businesses to identify strengths and weaknesses of their current business operations.

If your SME is looking for expansion funding, or overdrafts, find out about the finance options that we have available here. 

With SMEs in the UK continuing to flourish and being hailed as the backbone of the British economy it may be time for them to set their sights further afield and expand their offering overseas.

This is something to think about, especially given the fact that Brexit has opened a lot of doors for businesses that are interested in doing more on a global scale.

While Brexit has sparked a lot of uncertainty in the market, it may be necessary for small British companies to set their sights further than home turf, where economic growth has stalled and inflation is rising again.

So many SME’s have the potential to expand overseas, especially in our increasingly digitised and connected culture where communication between countries and organisations is fluid and easy to achieve.

Unfortunately, many companies are looking upon Brexit as a wholly negative thing and choosing to hone in on the uncertainty that it is presenting. They aren’t looking at the bigger picture and recognising the potential that there is to turn their business into a global brand.

This is something that GIC Capital as a company can help them achieve with the range of funding options that we have available for SMEs. The working capital service that we offer is carried out by our team of handpicked lenders and will ensure that each and every SME has the ability to meet its full potential.

Expanding globally may be something that all SMEs need to consider, especially given the fact that consumers in the UK seem to be becoming more frugal with their finances.

Advances in technology is making it easier than ever for UK companies to export their goods as a wide pool of markets are now at their fingertips.

Online marketplaces like Amazon and eBay also mean that companies won’t have to funnel time and money into creating their own shopping portal for regional sales. Such websites are accessible globally and ensure that companies can engage with consumers from all corners of the globe.