Small UK businesses are thriving, but face a challenge when it comes to recruiting younger staff – something that could hinder their longer-term success.
According to research by Santander Business Banking, just 35 per cent of Generation Z and Millennials leaving full-time education want to work for an SME, with only 18 per cent saying they would be willing to work for a start-up or microbusiness.
In contrast, around half said they aspired to work for a large firm, including global multinationals, or for the public sector.
This is despite the career opportunities SMEs offer and the fact that smaller businesses have created three times as many jobs as larger businesses over the past five years. According to Santander’s analysis of data from the Office of National Statistics, firms employing more than 250 people added about 650,000 net jobs from 2013-17, while those employing fewer than 250 added 1.7 million.
If this trend continues, the SME workforce could be larger than that of larger organisations by 2030, demonstrating the growing importance of SMEs to the UK economy and in providing employment.
Young people may be more attracted to larger companies for a number of reasons, such as brand recognition, a more established career path, better initial pay and perceptions of a more stable business.
But, as well as more jobs being available in small businesses, the potential for young workers to be challenged and rewarded is greater in these organisations. This is because there is more of an opportunity to have a real impact in developing the business (rather than being a small cog in a larger corporate machine).
And, due to their size, small businesses are more agile and have greater freedom to try new things. They aren’t as limited by legacy technology and processes and can make decisions faster than larger organisations due to a simpler management structure.
These are all factors that should attract ambitious young workers. But work needs to be done to change perceptions of a career within a small business. One way in which a small business can do this is to use virtual banking and digital payments, and communicate the benefits these bring to the work environment.
Traditional banking can mean a lot of repetitive work when it comes to managing business finances. Virtual banking simplifies things and drastically reduces the time spent on these kinds of tasks, whether you work in the finance team or elsewhere in the business.
Take invoice payment. Rather than going through hundreds of invoices and paying them individually, virtual banking enables staff to pay them with a single click of a mouse button, thanks to mass pay-out capabilities. Virtual banking also reduces the overhead of managing and keeping track of physical cash.
This aspect, along with the ability to view transactions in near-real time, create virtual records of payments and make international payments quickly and at a low cost, all contribute to an efficient and well-run business that can prosper.
As well as reducing the need to complete onerous tasks, the time saved through these simplified processes will give employees more time to focus on the more interesting and rewarding aspects of their job.
This gives greater scope for younger employees to make an impact – an attraction that most large companies are unlikely to offer. It could extend to innovation, whether it’s thinking of better ways of doing things or developing new products or services.
Due to the fact that virtual banking promotes a cashless way of making financial transactions, businesses taking this approach to banking are demonstrating that they are planning ahead. The use of physical cash is on the decline while cashless transactions rise, meaning businesses on board with this trend will be better placed in an increasingly cashless economy.
Virtual banking also enables business finances to be managed with a smartphone or tablet, meaning it fits with the kinds of devices that younger generations expect to be able to use for their work as well as their personal life.
By reducing repetitive work, giving more time to focus on more interesting and rewarding work (thus increasing the opportunity for individuals to make an impact), improving the way in which businesses operate and supporting the future direction of payments, virtual banking should help small businesses in their efforts to be more attractive to younger workers and recruit the talent they need.