Businesses stand or fall on the quality of their people – and if your firm can’t recruit enough staff with the right level of skills and experience, that’s potentially a serious problem.
Unfortunately, research suggests this is a common problem for small and medium-sized enterprises in the UK today.
In one study published last year by the British Chambers of Commerce, more than two-thirds of SMEs said they were struggling to recruit sufficient numbers of skilled staff. This year, the Federation of Small Businesses has warned that SMEs are suffering more than larger businesses from the skills gap – and that many are missing out on growth opportunities as a result.
Close Brothers’ own research echoes such warnings. Nearly a third of SMEs see skills shortages as a problem for their firms, according to recent findings from the Close Brothers Business Barometer – a quarterly survey canvassing the opinion of SME business owners and managers. More than half say they worry about whether they’ll be able to recruit staff with the right skills this year.
One problem is that the UK does not seem to be producing sufficient numbers of workers with the skills that employers need: the Government-backed UK Commission for Employment and Skills said recently that too many younger people lack technical ability and qualifications – but also that many don’t have basic work skills such as good time management.
However, it’s not just supply shortages that are causing problems. Demand for employees has also increased alongside the recovery of the UK’s economy from recession. At 3.7%, the UK’s unemployment rate currently stands at its lowest level for more than a decade.
Faced with supply and demand issues, how do SMEs confront skills shortages? In practice, there are a number of potential coping mechanisms:
1. Invest in training
Some smaller firms understandably feel they don’t have the resources to meet the cost of training; either the cash to pay for training or the depth of staffing to release people for courses. But if your firm is suffering from skills shortages, ignoring training may be a false economy – it’s likely to be easier to train existing staff than to take on new employees. If your finances don’t currently leave room for training budgets, investigating new sources of funding could be the answer.
2. Expand the search
If you can’t find the right people, it’s possible you’re not looking in the right places. Experiment with new approaches to recruitment – that might mean anything from changing your recruitment consultant to advertising in new places, attending job fairs and putting the word out on social media. Keep your website up-to-date with current vacancies, but don’t assume good quality candidates will find you; being proactive is key.
3. Consider taking on apprentices
Research conducted last year by Close Brothers found that SMEs were often reluctant to take on apprentices, but the Government is making a concerted effort to persuade employers to do more in this area. It now offers financial assistance to companies that take on young apprentices and has promoted the use of training bodies and other industry schemes that can help reduce red tape. An apprentice may not solve your firm’s immediate skills shortage, but can be an economical way of training people for the future.
4. Rethink the workforce
More than a million people over the age of 65 are now working on a part-time or consultancy basis. Such staff can be an excellent way to bring skills and experience into your business, even if you don’t offer them full-time and permanent contracts. Not only do such workers provide expertise that may otherwise be lacking, but they can also play a valuable role mentoring less experienced personnel.
5. Focus on staff retention
If your business is struggling to find new talent, it can’t afford to lose the knowledgeable workers it already has. Successful companies work hard at creating a culture that encourages people to stay. That doesn’t have to mean more pay – flexible working, or recognition through increased annual leave, for instance, can be just as attractive to some. Here, we take a look at five ways to reduce staff turnover.