• Over half of SMEs set to increase number of full-time staff during 2023, finds Paragon Bank research
• Increase in recruitment supported by improved turnover, with only 10% anticipating staffing falls for their business        

Over half of all UK SMEs expect to increase their workforces by the end of 2023, despite nearly two thirds claiming their sector suffers from skills shortages, new Paragon Bank research has found.

Carried out by Opinium on behalf of FTSE250 specialist bank Paragon, the research of over 600 firms found 55% expect to grow employee numbers during the remainder of the year.

Increases to staffing levels coincide with rising confidence in the SME sector, with prior Paragon research finding that 62% of SMEs expect higher turnover in Q1 2023 compared with the same period last year.

While staffing levels are set to improve, the research also identifies challenges faced by SMEs in finding and retaining suitable employees, with a majority citing a skills shortage (64%) as a barrier to recruitment and a need to offer higher salaries to attract candidates (65%).

Meanwhile, six in 10 employers said they have introduced flexible working practices to attract potential recruits, whilst 70% of SMEs said they had increased wages to retain existing employees.

Commenting on the research findings John Phillipou, Paragon’s Managing Director of SME Lending, said: “After the challenges of high-inflation and rising energy costs it may come as a surprise that over half of all SMEs are planning to increase their number of full-time staff in 2023 – but with low-levels of unemployment and concerns over skill shortages, SMEs are set to prioritise recruitment to help them deliver on their growth ambitions.

He continued: “If SMEs are to fulfil their growth and recruitment goals it is essential they can access the support necessary to make them possible. As a specialist SME lender, the Paragon team is talking with businesses daily to understand their requirements and deliver funding packages that will allow them to achieve their goals.”

For further information contact:

Tom Frew
Media Relations Manager
Paragon
E: [email protected]
www.paragonbank.co.uk 

Notes to editors:

Paragon Bank PLC a subsidiary of the Paragon Banking Group PLC which is a FTSE 250 company based in Solihull in the West Midlands. Established in 1985, Paragon Banking Group PLC has over £14 billion of assets under management, helping more than 340,000 customers to achieve their ambitions.

Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 05390593. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551.