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Recruitment and supply: the twin challenges for French SMEs

recrutement et approvisionnement

Bpifrance has just published its 74th half-yearly survey of SMEs. While small and medium-sized companies are confident about the dynamism of their business, the vast majority are worried. This is due to the increasing difficulty of recruiting skilled talent and problems of supply. Experts at AURIS Finance, specialists in mergers and acquisitions, take a closer look.

Business is good for French SMEs. According to a survey conducted by Bpifrance, small and medium-sized companies now expect their sales to increase by an average of 7% over the year. Six months earlier, they were expecting no more than a 2.8% growth. This increase is largely due to post-pandemic recovery. The majority of SMEs (60%) now expect turnover to increase, the highest level for 14 years. In order to fulfil orders, companies need to produce more and hire new skilled staff. With the exception of the tourism sector, hiring intentions are on the rise among SMEs in all sectors.

Small and medium-sized companies are struggling to recruit

However, according to the Bpifrance study, 82% of company directors who have tried to recruit say they have encountered difficulties in doing so. This skills shortage is particularly acute in SMEs and can be explained by a number of factors. Firstly, there are too many profiles that do not match the expectations of the published advertisements. Some industries, such as personal services, are struggling to locate suitable personnel. Despite training efforts, the mismatch between the profiles sought and the applicants hired may continue for several years. This is compounded by historically low levels of unemployment and an increasingly entrepreneurial workforce.

High demand puts pressure on supply chain

Another issue that SMEs face is a lack of supply. According to the Bpifrance report, 65% of SMEs are now experiencing supply issues. Demand is increasing due to the global recovery, resulting in substantial raw material price inflation. Furthermore, geopolitical concerns are driving up energy prices. All of these variables are having an impact on small and medium-sized businesses. The industrial and construction sectors are the hardest hit. Construction companies, for example, have seen material prices rise by 18%. At the same time, the automotive industry is struggling to meet its orders, as tensions in the supply chain are so acute. SMEs working as suppliers to the industry giants are directly affected.

A trend towards consolidation among SMEs

With order books full and recruitment and supply difficulties, the trend towards mergers among SMEs may intensify in the coming months. Joining forces with a competitor can be a good way to achieve cost synergies. Any sale or acquisition, however, must be planned ahead of time. The easiest way to achieve this is to seek expert counsel. Experts will be able to assist you throughout your merger and acquisition operation.

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