An annual survey of SMEs by The HR Dept shows skills shortages, Brexit and confusion over employee status as the top three concerns affecting their businesses.

Respondents to the survey were more than 700 businesses in a variety of sectors, served by The HR Dept’s network of 65 independent outsourced HR experts in over 89 territories around the UK and Ireland.

Of those who responded, 37% said that skills shortages and also Brexit were concerns for their businesses, with 33% saying that questions over worker and employee status were having an impact.

Also high on the list of concerns were issues over staff retention (29%) and the National Living Wage and Minimum Wage (26%).

But, perhaps unsurprisingly, uncertainty over the impact of Brexit was the major talking point in the survey, with many businesses citing a number of specific concerns.

Chief among these was uncertainty over the impact of Brexit on the UK economy, with 58% of respondents saying they were worried about it. Regarding their own businesses, 42% said they were worried about increased supplier costs and 18% cited concerns about access to EU labour.

By contrast, only 21% said they had no concerns about the negative effect of Brexit on their businesses.

On a more positive front, 37% of respondents said they were hopeful about increasingly UK-driven employment law, with 30% saying a resulting reduced regulatory burden would be welcome.

A quarter (25%) said they were anticipating improved trading relationships with the rest of the world and a similar figure (24%) thought Brexit would have a positive impact on the economy.

However almost a third (32%) said they were not hopeful about Brexit at all.

Caryl Thomas, Managing Director of the HR Dept Cardiff West, said: