Key insights from the survey include:

• The primary business objective for 44.7% of SMEs is growth, a significant decrease from 58.7% the previous year. This change is attributed to the tough economic conditions worldwide, with Australia and New Zealand being particularly impacted. In these countries, 22.4% and 26.6% of SMEs, respectively, stated that their main goal for the year is survival.
• In contrast, the situation appears more positive in the UK and Ireland, where only 18.8% of SMEs in each country consider survival as their foremost goal, compared to 38.4% and 34.7%, respectively, a year ago.
• A major concern for 84.2% of businesses is the escalation of costs. Additionally, labour issues are prevalent, with labour shortages (45.6%) and retention challenges (41.5%) ranking highly.
• The cost-of-living crisis and staffing shortages are compelling 56.3% of employers to offer financial incentives to retain staff. Canada leads in this aspect, with 64.9% of businesses providing such incentives.
• For those unable to provide financial rewards, alternative methods like recognition and reward have seen a 131% year-on-year increase. In the UK, mental health support remains a significant retention tool, with 48.7% of employers offering it, an 8% increase from the previous year.
• To combat the ongoing skills shortage, 46.5% of employers are investing in training and upskilling their current staff. Apprenticeships are gaining popularity, with a 36% global increase. Notably, Canadian employers reported a 217% increase in apprenticeships year-on-year. Recruitment challenges were cited by 25.7% of employers as their biggest staffing issue, followed by requests for pay rises (22%).
• Regarding work patterns, the concept of a 4-day workweek remains largely unimplemented, with only 2.2% of SMEs globally adopting it and an additional 0.6% having trialled and rejected it. Instead, 50% of employers report that their employees work full-time in the office, 14.7% offer flexible working hours, and 10.1% have adopted a permanent hybrid working model.

Peninsula Group Chief Operations Officer Alan Price says "Despite the tough economic climate, there is an air of optimism amongst small business owners as we move into 2024. Compared to this time last year, while recession remains a top concern, it's been overtaken by rising costs – unsurprising given the ongoing cost-of-living crisis, conflicts in the Middle East and Ukraine, and soaring interest rates.

"Employers feeling the financial pinch are turning to reward and recognition and enhanced benefits instead of financial remuneration to aid retention in tough economic times. Here in the UK there is concern amongst small business owners around the affordability of pay raises, with a huge jump to National Minimum Wage and National Living Wage due in April.

"It's also interesting to see that the majority have returned to the office full time. While hybrid working is likely to remain for some businesses, this signals a behaviour shift that we can see reflected in the number of job vacancies listing a permanent office-first working model as a requirement.

"It's clear that this will be a tough year for many businesses, but there is also a mood of opportunity. Employers are seeing the value in retaining employees and, in turn, employees are reaping the benefits. More than half were given a pay raise and employers are looking at creative ways to retain employees, such as upskilling and training opportunities, or flexible working where a pay raise is not possible.

"As January starts – traditionally the time of year when most people look for new jobs – it's no surprise that business owners are looking at ways to upskill and retain their own employees, rather than having to spend time and money recruiting."