Analysis of SME Challenges: Attracting and Retaining Talented Staff

This report examines the challenges faced by small and medium enterprises (SMEs) in the United Kingdom, specifically focusing on the issues of attracting and retaining talented staff. Using Chez Bruce, a London-based restaurant, as a case study, the report explores the difficulties SMEs encounter in their daily operations, including financial constraints, competition with larger organizations, and the need for skilled employees. The literature review covers the basic understanding of SMEs, the challenges they face, and potential solutions. The report identifies key challenges such as limited financial resources, difficulties in recruiting suitable employees, and high staff turnover rates. It then discusses various strategies SMEs can employ to overcome these challenges, including investing in recruitment processes, utilizing crowd funding, and offering rewards and benefits to employees. Finally, a critical reflection is included, discussing the author's learning preferences and implications for their learning development, specifically referencing the VARK model. The report concludes by emphasizing the importance of addressing these challenges to ensure the long-term success and growth of SMEs.

DEVELPING
RESEARCH

Table of Contents
INTRODUCTION...........................................................................................................................1
LITERATURE REVIEW ...............................................................................................................1
Basic understanding of SMEs in United Kingdom.....................................................................1
Difficulties faced by small and medium enterprises in daily operations and attracting or
retaining suitable staff.................................................................................................................2
Several ways by which SMEs can overcome problem in retaining and attracting suitable staff3
CRITICAL REFLECTION..............................................................................................................4
Learning preferences and discussion of implications for learning development on the
programme..................................................................................................................................4
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

TITLE:
To identify the issues faced by small and medium scale enterprise in attracting and
retaining talented staff.
INTRODUCTION
SMEs are abbreviated as small and medium enterprises. These are those businesses
which which maintains assets, number of employees and revenues under certain threshold (Allen
& Hartman, 2012). These companies plays a considerable role in the economy by offering job
opportunities, providing taxes to develop infrastructure etc. To prepare this report, Chez Bruce is
taken which is a SME operating in London, UK. It is a restaurant established in 1995. This report
is going to cover about different challenges which are faced by SMEs in attracting and retaining
their employees. Also, a critical appraisal based on individual learning is performed to identify
what is learned from this research.
Aim:
To identify the major challenges faced by SMEs in providing financial and non financial
benefits to employees for retaining them in organisation. A study on Chez Bruce.
Objectives:
 To develop basic understanding about the SMEs within United Kingdom.
 To identify difficulties experienced by SMEs in their day-to-day operations as well as
attracting and retaining suitable staff.
 Recommend different ways through which SMEs can easily overcome issues faced in
attracting and retaining suitable staff.
LITERATURE REVIEW
Basic understanding of SMEs in United Kingdom
According to Hall, J., 2018, SMEs are treated as the beating heart for economy in UK as
most of the people are operating SMEs for their livelihood. SME is known as small and medium
enterprise which hires less than 250 employees and earns annual turnover of less than 50 million
pounds. In context with UK, these SMEs make up around 99% of business and benefits in
stabilising the economy in UK. Under this umbrella of SMEs, there are 3 categories i.e. micro,
small and medium sized businesses. But even if SMEs is providing job to more than 60% of
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employees, their retention rate is less. This is due to the lack of financial benefits, employees are
not satisfied and their turnover rate are increased in a considerable manner. In the year of 2016,
5.5 million businesses were operating in private sector where majority of businesses were SMEs.
These businesses aims to provide good living standard to the local people by employment
opportunities and payment of taxes which is used by government in developing infrastructure
such as roads, hospitals, schools (Passey and Zozimo, 2016).
On contrary opinion of Rhodes, C., 2018 are different, Because of limited size and
financially instability of SMEs, these companies require loans and grants for their business. Due
to small size, these companies are not eligible for loans and grants due to which 60% of SMEs
manage capital through external funding. This acts as a big hindrance in their success. If these
businesses will be offered required loans and funds, they will be able to serve customers in a
more proper manner. This will helps in earning more capital, due to which retaining and
attracting employees will be easy. But as people and technology is getting advanced in UK,
owners of SMEs can take online loans with the help of Peer-to-peer platforms. After Brexit,
government is also providing support to these firms by offering subsidy and loans. This helps
business owner of SMEs in a positive manner in performing their business operations.
Difficulties faced by small and medium enterprises in daily operations and attracting or retaining
suitable staff
As per the belief of Beattie, A., 2019, Starting and managing a new business is a big
achievement for business owners but maintaining its revenues and sales is another big challenge.
There are several challenges which are faced by medium and small sized companies such as
limited size, deficiency of talented staff and skills, financial and capital assessing as well as
retaining suitable staff. Due to these problems, these businesses are not able to deliver their best
performance and their growth faces hindrance. If these problems will be resolved, SMEs like
Chez Bruce will be able to achieve a strong position within UK marketplace. In this context,
some of the difficulties which are faced by Chez Bruce in performing their daily basis activities
are mentioned below:
 Limited size and lack of finance: Size of these companies is small due to which they
have less number of employees for serving customers. In comparison with large
organisations, SMEs faces more difficulty in raising money from capital markets or
banks. This is because different financial institution require some collateral or assets
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before giving loan about. But as these companies operates at small level and have small
amount of investment, it is not possible for them to provide some assets as security. Due
to this, SMEs such as Chez Bruce face financial issues which impacts their business
activities and performance in a negative manner. If these firms will be given loans and
funds in a easier manner, it will be easy for them in providing facilities as per the needs
of customers (Selaolo and Lotriet, 2014).
 Recruiting suitable employees: According to Kolowich, L., 2019, Hiring and recruiting
is one of the main challenge which is faced by SMEs and their businesses. This is
because, small and medium companies are under resourced when they initiate their
business. It is not easy for them to manage the recruiting and on-boarding cost which is
spent on every new employee. In this context, SMEs face problem in recruiting suitable
workers. If right kind of people will be hired, it help the Chez Bruce in performing their
operations with full efficiency so that high profits can be acquired.
 Retaining staff: As SMEs are small in size and operability, it is not possible for these
business firms to provide monetary benefits to their employees on monthly basis. Also,
technology used by these firms in performing business operations is not very advanced.
Due to this, employees have to perform manual work more and they face difficulties in
working for small scale businesses. In case of chez Bruce, employee turnover rate is high
as workers left job within some months due to lack of skills to perform manual work. In
this context, Chez Bruce is needed to hire only suitable employees so that they don't have
to spend money on recruiting and on-boarding on regular basis (Baume and Popovic,
2016).
Several ways by which SMEs can overcome problem in retaining and attracting suitable staff
According to Kolowich, L., 2019, there are different ways by which the problems which
are faced by small and medium business organisations in performing their basic activities and
retaining employees can be overcome. It is easier to recruit people with by having a short term
mindset. Owner of the company can send out job description, screen desired candidates and
make appropriate decision of choosing right employees. But is it important for organisations
such as Chez Bruce to invest time in recruiting and hiring procedures so that only talented and
skilled employees can be hired. In this context, manager in Chez Bruce can create a candidate
persona which will include role and responsibilities of the hired employee. This will help new
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employees in understanding the work which they have to performed. By this, they will feel
comfortable and retain for a long time. This will help the company in solving the problem of
recruiting skilled employee and retaining them for a maximum time period. To manage the
issues related with finance, company is required to take loan through crowd funding in which
small amount of loan is taken from large number of people rather than talking entire funds and
loan from a single individual. This will helps the concerned restaurant in managing their
revenues and finances so that they can invest properly in their business. By this, all the problems
which are faced by a SMEs in performing business activities can be resolved in a desired
manner.
On contrary, According to the opinion of Pass, J., 2016, running a small or large
business is difficult and in order to achieve high success and growth, it is important for owner of
business to overcome different challenges in an efficient manner. In this context, to manage their
funds and finances in a proper manner, company is needed to invest in resources in a proper
manner, so that optimal utilisation of resources can be attained. This will help the company in
using their funds properly due to which lack of finance can be resolved in a proper manner. Also,
company can take loan from bank by taking loan for a short time. Beside this, manager of
company can ask individuals to perform and skill test before recruiting them as employees so
that only capable and skilled employees can be hired. Also, they will be able to understand the
working of company in a proper manner due to which the issue of less employee retention can be
solved. Also, SMEs can offer them rewards and benefits such as discounts, offers and monetary
rewards so that they will prefer to retain for a longer time span. By this, all the problems which
are faced by small companies such as Chez Bruce can be overcome and their staff can be
retained for longer time period.
CRITICAL REFLECTION
Learning preferences and discussion of implications for learning development on the programme
There are various kind of learning preferences for every person that defines about their
strengths, weaknesses, characteristics etc. so that information can be retried and processed in a
proper manner. In this context, I also had learning preferences for myself about the program on
which I am working. Due to this program, I am able to acknowledge various models such as
VARK. This model has benefited me in understanding different learning styles of people. In
accordance with this model, there are four kinds of learning patterns which helps a person in
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learning new concepts and procedures in a proper manner. In case of VARK model, V is
abbreviated as visual that defines that there exist some individuals which are able to learn things
by seeing graphics, objects, diagrams, pictures, videos or by seeing illustrations. This is the
quickest and simplest style by which a people can learn complex aspects in a considerable
manner (VARK learning styles, 2016). I also prefer to learn with this kind of style as looking at
pictures and objects helps me in understanding about them in an easier way rather than reading
some written document.
There are some people which are able to learn by listening things. These people adopts
auditory learning style which is A aspect of VARK model. In this kind of learning style, an
individual learn different aspects and styles through listening to the advice of experts via online
sessions or lectures in class. These people are capable to remember things which they have heard
in conferences, classes or different seminars. I am also good in learning things by listening about
them. Beside this, R in VARK stands for reading that defines that there are many people which
are able to learn new ideas and knowledge through reading notes, book, journals etc. In case of
may program, there are different students have listed reading as their main learning preference. I
am not good in learning things through either listening or reading them. This method is not
appreciated by me as my learning preference. Last aspect of VARK is K which is known as
Kinaesthetic learners. These kind of learners understand and learn things by watching someone
performing task practically (Bray and Boon, 2011). These people watch someone doing a work
and then learn about it so that they can perform same work in future on their own. I am not this
kind of learner, although this helps me in improving my learning ability and clearing concepts in
a proper manner. People with these learning styles are good in cooking, sports, painting, wood
working and mechanics.
Whereas, there is some other style such as Honey and Mumford theory which is
associated with different learning styles for different people. In my program, I have gained
sufficient knowledge about this model that will assists me in my future work and jobs. This is
because, to be an efficient employee I am required to perform every work with full efficiency
and dedication by learning new concepts each and every day. In context with this model, there
are 4 distinct kind of individuals which are theorist, activist, reflector and pragmatist. These
activists are those persons which are able to learn new aspects by doing work practically (Cook
and Inglis, 2012). Activates which help them in performing and learning work are puzzles,
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group discussion, brainstorming etc. Whereas the theorist are those person who learns concepts
by knowing theory behind it. Without having different theories and facts, these people are not
able to learn important aspects. These people are able to learn through different models,
statistics, quotes, books, articles etc. I am not this kind of learner and do not prefer to learn
aspects by reading their theories. The pragmatists are those persons which are required to
acknowledge different manner so that learning can be implemented in real world. These people
prefer to perform experiments to understand if their experiments are able to achieve success or
not. These learners are able to learn properly through discussions and case study. Reflectors are
those persons which are able to learn through observing things (Mc Kee and Eraut, 2011).
These people prefer to stand at back and observe different preferences so that right experience
can be gained in a considerable manner. These people gather relevant data for a particular topic
so that final conclusion can be analysed without any complexities. By performing activities such
as feedback, personality questionnaires, discussions, these people grab opportunity and perform
learning practices in a considerable manner (Tomlinson, 2016).
Under this program, I have learned a lot of concepts due to which I have collected deep
knowledge about SMEs and the difficulties faced by them in retaining and recruiting desired
workforce. I have learned different tactics to perform work and activities under this program.
When I have start working on this program, my critical thinking skills was bad and I use to get
panicked in every difficult situation. But now I am able to resolve complexities in an easier
manner. I have learned this skill while working on my learning program, I was required to solve
different case studies there. By giving justifications for them, my learning skills improve in a
considerable manner. Beside this, my decision making skills have also improved due to which in
future, as an employee for a firm I will be able to take only advantageous decisions. Earlier, due
to lack of confidence I was not able to take decisions in a proper manner. I have improved both
of this skills, under my program as I was exposed to different situations where I have to take
right decisions to help me achieving high success in learning program.
It has been critically evaluated that with the help of this learning program I was able to
improve my skills in a considerable manner. In this context, I was given some simulation
exercises which helps me in adapting, judging and analyzing working environment in a
considerable manner. Other than this, I was given the work to allocate resources among team
mates which have improved my resource allocating capabilities. This has allowed me to
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optimally use resources which will be available to me to perform work. By working with a team,
my coordination while doing work have improved. These aspects will help me in performing my
work in a proper manner so that I can achieve I success and growth in my life. I have also
improved my communication skills due to which I am capable to interact with different people in
a proper manner. This will helps me in understanding the opinion of different people in an
appropriate way. By this, I can attain high success and growth while working in a company.
CONCLUSION
From above mentioned report, it has been concluded that SMEs play a considerable role
in the growth and development of UK as it provide financial stability to people through jobs.
There are different kind of problems which are faced by an small company while performing
business operations like lack of talented employee, limited size etc. due to these deficiencies,
productivity of firm can reduce in a considerable manner. Beside this, with the help of different
frameworks, models, theories and concepts like Honey and Mumford learning style and VARK
learning approach, learning development can be achieved in a proper manner. These learning
approaches posses a considerable impact on learning level of individuals. This will increase the
overall productivity of company due to enhance working potential of employees. Beside this,
these models will help the business owners in addressing future needs in a proper manner so that
SMEs can work in a profitable way.
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REFERENCES
Books and Journals
Allen, S. & Hartman, N., 2012. Leadership Development: An Exploration of Sources of
Learning. Advanced Management Journal. 73(1). pp. 10-19.
Baume, D. & Popovic, C., 2016. Advancing Practice in Academic Development. Roultedge.
Bray, R. & Boon, S., 2011. Towards a framework for research career development: An
evaluation of the UK's Vitae Researcher Development Framework. International Journal
for Researcher Development. 2(2). pp.99-116.
Cook, T. & Inglis, P., 2012. Participatory research with men with learning disability: informed
consent. Tizard Learning Disability Review. 17(2). pp.92-101.
Mc Kee, A. & Eraut, M., 2011. Learning Trajectories, Innovation and Identity for Professional
Development. Springer Science & Business Media.
Passey, D. & Zozimo, J., 2016. Developing mobile learning practices through teacher education:
Outcomes of the MLEARN pilot. Interactive Technology and Smart Education. 13(1).
pp.36-51.
Selaolo, T. & Lotriet, H., 2014. Towards the incorporation of activity-based learning and
reflection into Botswana information systems development practice. Journal of
Workplace Learning. 26(2). pp.109-127.
Tomlinson, B., 2016. SLA Research and Materials Development for Language Learning.
Roultedge.
Online
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<https://www.investopedia.com/articles/pf/12/small-business-challenges.asp>
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Six business challenges every small business face. 2019. [Online]. Available through:
<https://blog.hubspot.com/marketing/small-business-challenges>
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<https://www.simplybusiness.co.uk/knowledge/articles/2018/12/what-is-an-sme/>
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