New research shows that SMEs are struggling to recruit and retain the right digital talent as they attempt to adapt to an increasingly digitalised marketplace. One of the major barriers is cost. Alternative finance can help these firms afford the skills they need.

According to a new study from recruitment agency Robert Half, over 80% of SMEs are struggling to attract the talent they need to adapt to digitalisation, while over half of entrepreneurs can’t find the candidates with the right digital tech skills. Tellingly, the survey also reveals that smaller firms are losing out on talent to big tech firms, with the recruitment and retention of this type of employee cited as a major challenge by chief information officers.

The relatively scarcity of digital tech talent, a fiercely competitive marketplace, the lure of working for a household name and a generational trend of employment mobility are all major factors behind SME problems in this area, and so is cost. Big tech firms can pay salaries and offer incentives that smaller companies are ill-equipped to compete with. Furthermore, the study shows smaller firms are lagging behind larger companies in terms of the training they can offer employees.

Broadening the focus on SME recruitment, it is not only digital tech talent that SMEs are struggling to attract. According to the new Aldermore Future Attitudes report, two-thirds of SMEs are having difficulty in recruiting and retaining top talent in every area. Again, a number of factors are contributing to this problem, including cost.

So, how can smaller firms afford the talent they need to be competitive and perform well in the new digital age? Alternative finance has a role to play.

In the wake of prolonged caution from traditional lenders, the likes of invoice finance, asset finance, peer-to-peer lending and crowdfunding are redrawing the small business funding landscape. These facilities are providing firms with access to capital, on an affordable and flexible basis, for essential investment, such as in staff recruitment, training and incentive schemes.

This is how a Sussex small business used peer-to-peer lending, through a commercial finance broker that specialises in alternative finance, to raise the capital to invest in new resources.

Recruiting the right digital tech talent is clearly a challenge for SMEs – they are facing some significant headwinds in this regard. But to get the market traction they need in a rapidly digitalising marketplace, they need to find the resources to offer competitive salaries and conditions. To do so, business owners need to be aware of all the funding options available to them, including alternative finance.

To find out more about A&T Business Associates services, contact Steve Bowles on 01903 602211 or steve.bowles@atbusinessassociates.co.uk.