Have you considered how the Enterprise Investment Scheme (EIS) can support your recruiting efforts?
Eight in ten small businesses are finding it difficult to recruit staff, according to a report published by the Federation of Small Businesses (FSB). The FSB’s ‘Scaling Up Skills’ report found that over 80% of small firms are flagging a lack of relevant qualifications, skills, and experience among candidates as a problem, while 60% say a lack of applicants is also an issue. The Enterprise Investment Scheme (EIS) can play a crucial role in addressing these challenges.
If you are a small business in the IT, Digital and Creative industry, then you know that the reality of the fast pace and constant change makes recruiting even more challenging. HR efforts play a key role in attracting and keeping talent, but – accountants can also help!
How tech firms can use EIS to help with recruitment struggles
If you’re familiar with EIS, you likely focus on it as a scheme to help attract investors. However, successfully managing EIS and other investment schemes can also be leveraged to send an extremely effective message to your existing and potential employees.
Why Candidates and Employees Care
Job security is a significant concern for candidates considering roles at startups and smaller tech firms. Many companies are unstable in their early stages, and even some of the most promising ventures don’t end up making it work long-term. Understandably, potential hires may look for greater security when choosing where to work. The fear of job security can impact existing staff too. Your employees could start looking for new roles if they feel the financial situation isn’t sustainable.
Using EIS in Your Recruiting Strategy
EIS (and SEIS for new startups) is a UK government scheme designed to help you raise money to build your business by offering tax incentives to investors. The scheme provides significant growth opportunities for early-stage companies to meet funding requirements. It can be particularly effective for young, high-growth businesses in the IT, Digital and Creative industry.
Under EIS, you can raise up to £5 million each year and a maximum of £12 million in your company’s lifetime. This also includes amounts received from other venture capital schemes. Your company must receive investment under a venture capital scheme within 7 years of its first commercial sale. You must follow the full set of scheme rules so that your investors can claim and keep EIS tax reliefs relating to their shares.
EIS funding and tax relief make high-risk businesses appealing to investors – and the additional investment in your business makes your company more appealing to employees.
Atek’s comprehensive support for the SEIS and EIS schemes
Atek works with businesses to
- Confirm your eligibility for an SEIS or EIS scheme.
- Prepare and submit your scheme application.
- Enhance your investment proposition so you are in the best possible position to secure investment once you have HMRC approval.
- Prepare SEIS and/or EIS certificates for investors.
A successful EIS or SEIS can provide the funding needed to boost your business to the next level – and send the critical message to employees and candidates that your business is growing and sustainable. If you are interested in learning more, contact us for a chat to review your situation.
