Research from EY shows that entrepreneurs expect coming years to compound recent growth but attracting talent remains a sticking point
Whilst the recession is now naught but a speck in our rear-view mirror, growth can’t just be taken as a given. Which is why the emergence of solid evidence that startups are seeing significant growth is so gratifying. New research from EY, the professional services firm, has shown that plenty of firms have grown over the last year and entrepreneurs are feeling pretty chipper about their future prospects. However there are still one or two hurdles to overcome before they can crack open the Veuve Clicquot and bring out the party hats.
According to EY’s survey of 226 entrepreneurs, three quarters of entrepreneurial businesses have seen their turnover grow in the last year, with 57% enjoying an increase of more than 5%. And these firms aren’t just amassing more moolah – headcounts are also climbing ever higher. Over the last year 83% of entrepreneurs have taken on more staff, with 28% of these taking on at least 50 new employees. Entrepreneurs are also feeling rather bullish about their future prospects; the overwhelming majority (93%) are anticipating growth over the next three years, with more than half expecting annual growth of 10%.
But it’s not all gravy. Indeed, the brussel sprout that is skills shortage threatens to mar entrepreneurs’ appetite for expansion. EY’s research found that 77% of entrepreneurs have found it difficult to find the talent that their business needs; more than half felt that this was down to candidates lacking the right skills and a fifth felt wage costs were too high. London particularly has become something of a scramble for talent; a quarter of London-based entrepreneurs felt wages were too high whilst 22% felt there was too much competition.
“Overall the future looks bright for UK entrepreneurs, with many delivering strong performance in recent years, and expecting good times ahead,” said Stuart Watson, EY’s Entrepreneur of The Year UK leader. “However, our survey highlights that while businesses are increasing headcount at a considerable rate and are expecting to grow even more over the next year, the right people may not be there to fuel that growth.
“For entrepreneurs to sustain their growth plans, they need to demonstrate fresh thinking and an innovative approach to attracting talent from a global pool. This will help them stay ahead of the curve as the economy recovers and the war for talent intensifies.”
But if they can put an end to the tribulations of talent shortfalls, entrepreneurs are still quietly confident that good times are just around the corner. It seems the champers won’t be on ice for long.