What comes to mind when asked what makes the hallmark of a promising scale-up? Innovative product or service? Disruptive founder? Experienced backers? All, of course, are important. However, one area that might not come to mind as quickly – but which is just as essential – is a strong team.
Scale-ups rely on talented individuals whose skills and motivations align with the ambitions of the organisations they work for. What is become increasingly clear is that one of the key barriers to achieving scale is the difficulty many founders and owners experience in transitioning from making all the decisions and failing to build and retain a strong, well-rounded team.
Skills and the search for ‘right-fit’ talent
In fact, recent BDO data has revealed that a quarter of mid-market businesses believe accessing the right talent is the biggest challenge facing their business.
And this challenge shows no sign of abating, according to new insights from the latest edition of the Scaleup Institute’s Annual Review. It’s highlighted the degree to which scale-up leaders are questioning the UK’s approach to both education and immigration, in terms of delivering the talent that’s vital to supporting growth businesses to succeed.
The harsh reality: high growth businesses can often find themselves fishing in a shallow talent pool. With candidates possessing skillsets mismatched to the needs of innovative scale-ups, the consequence is fierce competition for the best talent.
Fortunately, there are a range of actions businesses can take to help attract, retain and shape the talent they need both for the challenges they face today and the evolving needs they’ll have tomorrow.
The importance of building resilience into teams
No scale-up journey unfolds without its share of upheaval. Rapid hiring sprees, shifting market conditions, and the relentless drive to innovate can all place pressure on existing teams. Resilience is therefore essential for sustained success.
Yet while virtually every business leader acknowledges its importance, far fewer have successfully embedded resilience strategies into day-to-day operations. In fact, only 47 per cent of business executives believe their organisation is resilient.
People are, of course, central to business resilience. Consequently, scale-ups need robust ‘people plans’ that clearly articulate how they will identify, attract, develop, and retain talent capable of adapting to continuous change.
Key characteristics necessary for strong business resilience include speed and agility, curiosity and innovation, customer focus, back-up systems, superior data and, of course, talent. Scale-up leaders must also be capable of enhancing team cohesion and driving collective success in times of rapid change.
Putting culture at the centre
One of the most powerful tools to attract and retain top talent is an inspiring workplace culture. This can be seen on the bottom line, with companies that prioritise culture experiencing seeing gains of up 33 per cent in revenue.
However, a culture isn’t built overnight; it involves investing in the development of employees, providing opportunities for growth, and embedding clear values that shape every aspect of their experience. This is precisely the principle that underpinned the meteoric rise of Allica Bank, which ranked first in the 2024 Sunday Times 100 list of fastest-growing private businesses.
Founded to serve UK SMEs with tailored financial solutions, Allica Bank realised early on that success depended on uniting a workforce around its mission. Conrad Ford, Allica Bank’s chief product & strategy officer, has credited this strong culture as key to the business’ success, stating: “We believed in building a company where everyone, from the top down, felt responsible for the bank’s success, and as we grew, this strong cultural foundation became a competitive advantage, helping us retain talent and maintain agility in the face of rapid expansion.”
Employment with purpose
Today’s workforce is driven by more than monetary rewards; many want to see their personal values reflected in their employer’s actions. Millennials and Gen Z, in particular, often prioritise social impact and a sense of purpose at work. One study found that 61 per cent of these generations consider it vital for companies to take a stance on social or environmental issues.
For scale-ups, weaving ESG initiatives into the organisational fabric can pay dividends from a talent point of view. Such policies can play an important role in helping companies to better resonate with the values of current and future generations and strengthen their overall employer brand.
When done right, the potential is significant. For example, research has shown that businesses holding B-Corp accreditations have 55 per cent lower attrition rate than non-accredited peers.
Look beyond the here and now
A common pitfall for businesses during the hiring process is focusing too narrowly on the short term. It’s natural to look for someone who can solve an immediate problem or fill a gap in the here and now. However, as a scaling business, your needs are likely to evolve quickly.
It’s crucial to think ahead, consider the direction your business is taking and what skills will be needed to achieve those goals. Recruiting with the future in mind ensures that your team grows alongside your business, equipped to handle both present and emerging challenges.
Five ways to close the skills gap
One of the most important tasks is identifying and meeting the skills gaps that could hinder your growth. To wrap up, here are five key steps a business leader can act on immediately to address any skills gaps and start building a highly motivated and future-focused team:
- Conduct regular skills audits: Regularly examine your current team’s capabilities against industry needs. This helps identify both immediate weak spots and potential future deficits
- Keep an eye on competitors: Monitor how your rivals are recruiting, particularly for new or niche roles. Observing their talent strategies can highlight emerging skill demands
- Embrace employee feedback: Create formal and informal spaces – surveys and workshops for example – where employees can voice opinions on future skill requirements. Encourage the sharing of ideas and communicate how these are being put into practice
- Engage with wider industry experts: Consult with experts to anticipate shifts in required skills and adapt your strategies to accommodate these seismic changes
- Benchmark aggressively: Identify the skill sets, job roles, and training pathways considered standard for top-performing businesses in your niche. Now assess how well your business matches up
For more tips and guidance on how to grow your high potential business, download BDO’s report Breaking through the barriers to growth.
Mark Sykes is head of entrepreneurial business at BDO.
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