HR · 2 November 2015

Small firms reveal what they think is the most important determinant of success

Customers and profitability were also high up on the list of what small firms thought determined their success
Customers and profitability were also high up on the list of what small firms thought determined their success

When asked to pick what they thought was the most important criteria for business success, one in five small and medium-sized firms said a happy workforce was crucial.

The quarterly Close Brothers Business Barometer surveys UK SME owners and senior management from a range of sectors, canvassing the opinions of over 500 small business owners across the UK.

Its newest report looked at what small firms thought was important for business success, and also found a third of firms were looking to take on more staff over the next year. Three quarters of these will be taken on as permanent staff members.

However, new research from job site Adzuna has shown many UK cities are struggling to balance the number of job vacancies with jobseekers. Some 41 out of 56 cities surveyed were advertising more job vacancies than there were candidates looking for positions.

The second and third most important factors in determining business success were customers (15 per cent) and profitability (14 per cent), but 21 per cent said a happy workforce was the first priority. Staff retention is an ongoing issue for employers, and stable, engaged staff usually lead to improved productivity too.

A survey earlier in the year by online gaming site compiled the top 50 things workers would want to have, which would make their company “cool”.

The top ten included slides, a personal barista, a puppy or kitten room, a gym, nap rooms, a punch bag, segway scooters, floor-to-ceiling windows, massaging office chairs and a daily buffet.

Practicality and affordability might put a stop to small firms introducing many of those anytime soon, but the CEO of Close Brothers Asset Finance said the latest Barometer was particularly positive in its recognition of employee wellbeing.

“It is great to see firms taking on more permanent staff and believing that a happy workforce is the key driver of success throughout the business,” Mike Randall said. “Our figures clearly show that firms are aware of the positive effects a happy workforce can have on a business and are looking to grow and expand their workforce.”

He did though, warn firms to make sure they have “appropriate plans in place” and funding options to equal their growing team.

“Understanding what assets or finance are required to meet and manage the needs of the business is vital, particularly as just under one fifth of firms consider cash flow as their main business concern,” Randall added.

“We call for all business owners looking towards expansion to ensure that they regularly assess their plans and evaluate all of the financial options are available to help them find the most appropriate solution to fit their business needs.”

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Rebecca is a reporter for Business Advice. Prior to this, she worked with a range of tech, advertising, media and digital clients at Propeller PR and did freelance work for The Telegraph.