The recruitment challenge facing intermediate-sized businesses: causes and solutions

Intermediate-sized businesses have been among the mainstays of the French economy for more than 30 years. Between 1994 and 2022, the number of intermediate-sized businesses in France soared by 57%, they achieved significant annual growth (+1.16%) and their productivity increased by 38.2%. Over the same period, the salaried workforce of these businesses also grew considerably, from a total of 2.17 million employees in France to 3.44 million.⁽¹⁾⁽²⁾ But despite this well-established momentum, these businesses struggle to recruit.

In fact, more than half of France’s intermediate-sized businesses name recruitment issues as the main challenge to their growth.⁽³⁾ In some studies, the figure is as high as three-quarters. Moreover, 61% of respondents say they struggle to retain talent.⁽⁴⁾ Various sectors experience difficulties, with services, insurance, retail, transport and tourism all affected.⁽³⁾ 

Numerous businesses highlight that recruiting is no longer just a need; it has become essential to their future survival.
But what makes recruitment such an issue for intermediate-sized businesses? What solutions can be put in place to solve the problem and build staff loyalty? Let’s take a closer look.

The root causes of recruitment issues

Competition with major corporations

For the most part, intermediate-sized businesses’ recruitment issues stem from direct competition with major corporations, which have structural advantages.

Firstly, the packages offered by these corporations are generally more attractive, because the salaries are often higher and the benefits better (performance-related pay, profit sharing, superior top-up health insurance, additional leave, etc.). When an applicant is looking for security and thinking about their long-term future, these factors are significant. 
Secondly, major corporations have greater visibility and stronger reputations than intermediate-sized businesses. With their media presence and their links to well-known brands, they automatically attract more applicants. Conversely, intermediate-sized businesses have an image problem.⁽⁵⁾ Few applicants are aware of them, and they may be unfairly viewed as less sound or less forward-thinking, so that they struggle to make the cut despite their unique positioning. HR managers from these companies agree that, when competing with the blue-chips, the challenge is focusing attention on what makes intermediate-sized businesses unique: agility, close working relationships and company culture.

Skill gaps in certain sectors

Recruitment issues can also be explained by skill gaps in certain key sectors, which hold back growth. The hardest-hit sectors include manufacturing, IT (where qualifications need to keep pace with developments in AI in particular), healthcare and personal care. With staffing already tight in these fields, the lack of qualified candidates heightens competition, and intermediate-sized businesses lose out to firms that are more visible or have more resources. It is clear that they need to plan ahead for changing roles and invest in training to avoid finding themselves short-staffed. 
 

Strategies for facilitating recruitment

Strengthen the HR function

To counter these difficulties, it is vital for intermediate-sized businesses to strengthen their HR function. First, they must put a clear business strategy in place, with concrete recruitment targets and a precise list of the skills they are seeking. Then, it is vital to have professional HR processes, with performance indicators, clear career pathways and strategies for developing internal talent. Lastly, the businesses must make this HR structure clear to applicants. Seeing that the company is solid and well-organised will put their mind at rest. HR managers from intermediate-sized businesses believe that by showing they have professional HR processes, they are also sending a strong signal to candidates that here, their career pathway is valued.

Employer branding

Building a strong employer brand is another important strategy for recruiting. For some applicants, just knowing that a business is classified as “intermediate-sized” can create uncertainty or detract from its worth.⁽⁶⁾ Consequently, it is vital for these businesses to strengthen their employer brand by highlighting the advantages they can offer:⁽⁶⁾ remuneration policy, quality of work life, culture, values, management style, etc. All these factors are important to applicants. Today, to build their employer brand, many intermediate-sized businesses tell their story and explain their values, motivating candidates to join them.

It is also important to highlight the stability and resilience offered by intermediate-sized businesses, often family companies with strong local roots and concrete succession plans in place.

Adapt to the new expectations of applicants

Adapting to the expectations of applicants has also become essential. Today’s job seekers are looking for flexible working conditions, an inclusive company culture and genuine opportunities to develop.⁽⁶⁾⁽⁷⁾ Intermediate-sized businesses that show they can meet these aspirations will not only be more attractive, they will also stand out in a very competitive market.
Social media plays a key role in communicating these commitments. It is an opportunity to show the right applicants the company’s culture and values.⁽⁸⁾ All in all, to meet the expectations of candidates, businesses must lay the foundations of a modern, engaging employer brand. For talented applicants today, “just a job” is not enough – they also want a project, meaning and freedom. 

Internal resource management: how to boost staff retention 

Continuing professional development (CPD)

CPD is a key factor in staff retention. It addresses two issues simultaneously by upskilling the workforce and meeting the expectations of employees who want to progress. But it is also a way for businesses to plan ahead for changes in roles, lay strong foundations for career progression and boost team engagement. By investing in CPD, businesses give staff concrete future prospects.⁽⁶⁾

Some intermediate-sized businesses go even further by creating their own training centre, or by forming sector-based groupings, in industry in particular, to share knowledge and transfer it more effectively.⁽⁶⁾ Today, when HR managers provide training, they are investing as much in the future of the business as in the future of the individual employee.

Quality of work life and employee well-being

Improving employees’ quality of life and well-being is also essential to staff retention. Initiatives in this area boost employee engagement, and in the long run, contribute to the overall performance of the business. They also enhance competitiveness. With fewer constraints than large corporations, intermediate-sized businesses often have the flexibility they need to put in place concrete, personalised initiatives in tune with their teams’ expectations.⁽⁶⁾

By focusing on quality of work life, these businesses can use their size to their advantage, because they’re in close contact with their teams, agile in the way they work and attentive to individual needs. Consequently, their HR managers promote their intermediate size as a strength, because it enables them to work closely with their teams, listening to them and offering solutions to their needs.

Social dialogue, inclusion and recognition

Social dialogue, inclusion and recognition are also essential to staff retention. Because they are often structured in a more flexible, manageable way, intermediate-sized businesses can establish strong social dialogue, with employees and management talking to one another directly. These close links foster smooth communication and a climate of trust,⁽⁶⁾ especially in family-run businesses.

Recognition also plays a key role. Intermediate-sized businesses can reinforce staff engagement by acknowledging skills, valuing employees’ efforts and offering genuine opportunities for advancement. Last but not least, inclusion enables all staff to feel they belong and that their contribution is valued.⁽⁶⁾ 

Sources : 

1)    La France s’est ETIsée - strategie.gouv.fr - 2025 [The rise of intermediate-sized businesses in France]
2)    Les ETI, fer de lance de l’économie française depuis trente ans - strategie.gouv.fr - 2025 [Intermediate-sized businesses, driving the French economy forward for 30 years]
3)    Enquête ETI 2024 - lelab.bpifrance.fr - 2025 [2024 intermediate-sized business survey]
4)    Baromètre « Future Ready » de la transformation des ETI 2024 - m-eti.fr - 2025 [Future Ready barometer on the transformation of intermediate-sized businesses, 2024]
5)    Attractivité et marque employeur des ETI - ifop.com - 2024 [Attractiveness and employer branding in intermediate-sized businesses]
6)    ETI et talents : les clés pour que ça matche - la-fabrique.fr - 2021 [Intermediate-sized businesses and talents – what makes a match?]
7)    2023 : les Français réclament plus de flexibilité et d'efficacité dans l'organisation de leur travail. La solution QG numérique pour répondre à ces besoins - francenum.gouv.fr - 2024 [2023: French employees call for more flexibility and efficiency in the way their work is organised. How a digital HQ can meet these needs.]
8)    Les ETI diversifient leurs canaux de recrutement - recruteur.lefigaro.fr - 2024 [Intermediate-sized businesses diversify their recruitment channels]