Adapting to workforce challenges as an owner managed business

Article by Bishop Fleming.

Bishop Fleming is a partner for Growth Forge 2024, a business acceleration programme for ambitious tech companies. Learn more here.

How can owner-managed businesses deal with workforce challenges in an evolving landscape?

The fourth in our series dedicated to helping owner-managed businesses navigate their challenges in a changing landscape, focusses on navigating workforce challenges.

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In the dynamic landscape of today’s business environment, workforce issues represent a critical concern for owner-managed businesses.

Bishop Fleming’s recent survey among its clients has highlighted several pressing challenges faced by businesses, including difficulties in recruiting and retaining skilled employees, the impact of a tight employment market on operational costs, and concerns about the quality of recruits and the need for skilled workers.

We take a look at these challenges and discuss strategies for addressing them:

Difficulty in Recruiting and Retaining Skilled Employees

One of the most significant challenges confronting owner-managed businesses is the difficulty in recruiting and retaining skilled employees.

In today’s competitive labour market, businesses are engaged in a fierce talent war, vying for top talent amidst a limited pool of qualified candidates.

Factors such as demographic shifts, changing workforce preferences, and skills shortages exacerbate the problem, making it increasingly challenging for businesses to attract and retain the talent they need to drive growth and innovation.

A recent study by recruitment firm Indeed Flex revealed that one in three businesses are understaffed at least once a week due to a lack of available employees. Frequent employee sickness is a major issue, according to the study, as well as staff unwillingness to work certain days or hours. One in four businesses have struggled to fill vacancies in 2024, leading to an increase in the employment of temporary workers. 

Tight Employment Market and Increased Wages Impacting Operational Costs

The tightening labour market has led to increased competition for skilled workers, driving up wages and placing upward pressure on operational costs.

Businesses are faced with the dilemma of balancing the need to offer competitive salaries to attract talent with the imperative to maintain cost-effectiveness and profitability.

Rising labour costs can strain budgets and erode profit margins, particularly for small and medium-sized enterprises (SMEs) operating on tight margins.

Concerns About the Quality of Recruits and the Need for Skilled Workers

In addition to recruitment challenges, owner-managed businesses express concerns about the quality of recruits and the availability of skilled workers.

Rapid technological advancements and evolving industry demands require a highly skilled and adaptable workforce capable of driving innovation and meeting evolving customer expectations.

However, businesses often encounter difficulties in finding candidates with the requisite skills and experience, leading to concerns about workforce readiness and productivity.

Strategies for Addressing Workforce Challenges

Despite the formidable challenges posed by workforce issues, owner-managed businesses can implement various strategies to attract, retain, and develop talent effectively:

  • Invest in Training and Development: Prioritise employee training and development initiatives to upskill existing staff and bridge skills gaps. Offer opportunities for continuous learning and professional development to enhance employee engagement and retention.
  • Enhance Employer Branding: Differentiate your business as an employer of choice by cultivating a strong employer brand and promoting a positive workplace culture. Highlight opportunities for career advancement, work-life balance, and employee benefits to attract top talent and retain existing staff.
  • Offer Competitive Compensation and Benefits: Benchmark your salary and benefits packages against industry standards to ensure competitiveness in the labour market. Consider offering incentives such as performance bonuses, flexible work arrangements, and wellness programs to attract and retain skilled employees.
  • Foster Talent Pipelines: Establish partnerships with educational institutions, vocational training programs, and industry associations to cultivate talent pipelines and access a diverse pool of candidates. Develop apprenticeship programs, internships, and mentorship initiatives to nurture future talent and promote workforce development.
  • Embrace Technology and Automation: Leverage technology and automation tools to streamline recruitment processes, enhance workforce productivity, and optimise operational efficiency. Implement digital HR solutions for talent acquisition, onboarding, performance management, and succession planning to support organisational growth and scalability.

Conclusion

Workforce challenges pose significant hurdles for owner-managed businesses, requiring proactive strategies and innovative solutions to attract, retain, and develop talent effectively.

By investing in training and development, enhancing employer branding, offering competitive compensation and benefits, fostering talent pipelines, and embracing technology and automation, businesses can navigate workforce challenges and position themselves for long-term success in a competitive marketplace.

Owner-managed business series

This is an ongoing series. Check out our other articles in the series:

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To find out how we can help you or your owner-managed business, please get in touch with Fleur Lewis

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