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Britain's small firms struggling to hire in face of Brexit - survey

People walk through the financial district of Canary Wharf, London, Britain 28 September 2017. REUTERS/Afolabi Sotunde

LONDON (Reuters) - Recruiting and keeping staff is having a bigger negative impact on smaller businesses in Britain than the post-Brexit vote fall in the pound or a weakening economy, a survey has found.

Firms are divided over what Britain's exit from the European Union will entail and crave certainty as they deal with higher costs since the vote to leave the bloc last year, a survey of more than 1,000 small and medium sized enterprises said.

The survey by Bibby Financial Services found that 41 percent of those firms polled cited finding and keeping good quality staff as among the biggest headaches facing them.

Smaller businesses can be more exposed to uncertainty over staff turnover, especially if they invest in training employees only to see them leave.

Another survey by the Confederation of British Industry showed a dip in business confidence, and said concern over hiring unskilled labour was at its highest since 2004.

SMEs are already feeling the effects of the vote to leave the EU, which prompted an 11 percent fall in the pound.

The Bibby survey found that 34 percent of SMEs identified the increased cost of imports as a major impact to their business since the vote.

However, while 22 percent said they had seen declining domestic sales, 21 percent said that domestic sales had increased since the referendum in June last year.

London Mayor Sadiq Khan joined with Britain's bigger business in warning that companies would start moving jobs and investment out of the country if they do not get a transition deal soon.

Companies surveyed were roughly split on whether they expected there to be a transition deal before Brexit.

"Despite the clock counting down to March 2019, there are almost as many unanswered questions facing UK SMEs as on the day the EU referendum result was known," said Edward Winterton, UK Chief Executive Officer at Bibby Financial Services.

"Right now businesses need to start planning ahead. The UK and EU simply must agree a new trade deal, reducing the current state of uncertainty UK business finds itself in."


(This version of the story corrects "exports" to "imports" in paragraph seven).


(Reporting by Alistair Smout; editing by Alexander Smith/David Evans)