New research from Tempo, an end-to-end hiring platform trusted by Monzo, Bulb and Starling Bank, reveals that one-third of British SMEs and startups have lost a client due to employees having poor people skills.

The survey findings are part of Tempo’s ‘Master of More’ campaign and reveal the negative impact that shoddy interpersonal skills can have on a fast-growing business. The research found the knock-on effects of bad people skills in the workplace — such as communication, creativity and problem-solving — include losing a client / customer (32.0%), as well as receiving complaints from co-workers (33.0%) and a decrease in productivity (31.4%).

This paints a worrying picture following the Ombudsman Services report which estimated British businesses lost around £37 billion every year due to bad customer service.

The research also found that the majority of respondents (77.40%) have worked with ‘ineffective managers’ before. Respondents determine ‘ineffective managers’ by lacking time management skills (47.03%) followed by lacking emotional intelligence (43.41%) and inability to problem solve (39.53%).

In addition, although the majority (69.6%) of business owners believe interpersonal skills are harder to master than technical skills, only 10% spent more money on training on interpersonal skills over technical skills. And, rather than investing money into training employees, 61.8% said they would all together reject a candidate based on their interpersonal skills.

Ben Chatfield, CEO and co-founder at Tempo stated, “our results show that despite their name, soft skills aren’t all that ‘soft’ to master. There’s a skills shortage plaguing British scale-ups — and it’s not the tech one which gets a lot of airtime. We’ve found not only do poor people skills cause tension within the workplace and impede productivity — it’s hampering business growth. Fast-growing business owners must prioritise people skills — and fast.”

Tempo is an end-to-end hiring platform connecting tens of thousands of people to temp and perm non-technical roles with the fastest growing, most innovative companies in the world. The company believes that work should be an adventure and recruitment the most exciting thing companies do.

For HR teams who play an important role in the recruitment process, they have to make sure they hire candidates with personal skills and not just technical ones. There is certainly a skills gap issue but research shows it’s wider than we thought.

Other key findings from the report found:

The top five most desired soft skills: 

1st: Communication skills (41.2%)

2nd: Creativity (40%)

3rd: Time management (38.8%)

4th: Problem-solving (37%)

5th: Multitasking (34.4%)

Recruitment struggles: Over half (54.8%) of respondents struggled to find candidates with the necessary soft skills, which 51% said is hindering business growth. What’s more, 53% said their current team lacked these, with over half (54.8%) of business owners agreeing they struggle to find candidates with the necessary people skills

Jack of all trades demand: Over half (61.2%) said they would prefer all-rounders to specialists

People skills will be increasingly important for future generations: 74% of business owners say hiring people with good soft skills will be more important in the future than it is now

A recent McKinsey study predicts that as automation transforms the skills companies need, demand for creativity will rise sharply by 203. As such, it’s understandable that creativity was the second-highest scoring soft skill ranked by UK business owners. Creativity in particular therefore is a skill that HR teams and business owners alike should lookout for a nurture in their workforce.

Selena Ng, People Business Partner at Starling Bank commented on the report: “Customer support is such an integral part of the business. We need people who work hard and who care about turning every single customer experience into a positive one.  A client-facing role can definitely be challenging at times and we’ve found it extremely difficult to get the right quality of candidates through the door.”

This report is based on the findings of market research we conducted via Censuswide, a leading independent business intelligence agency. Between 4th and 11th February we surveyed 500 business owners who considered themselves to be an SME or startup and had between 30 and 250 employees.