News in brief: digital skills, creativity, MSBs, sole traders, tax, jobs

News in brief
News in brief

SMEs must do more to tackle digital skills gap

British businesses are not doing enough to boost employees’ digital competence, yet almost half (47%) of all businesses believe better digital skills would lead to a more productive workforce, investment in digital upskilling remains low at only £109 per employee among medium and large businesses.

This is according to new research commissioned by Barclays which found that businesses have struggled to digitally upskill the workforce, as a third (34%) of employers find it difficult to implement the right training to address the current lack of digital skills. Instead, two-fifths (40%) of businesses opt to hire younger, more digitally savvy employees to address the digital skills gap, with 45% of organisations admitting to believing that older employees are often slower to pick up digital skills. A third (33%) of employers consider only a small proportion of their employees as having the digital skills they would expect of them given their role.

More than a quarter (27%) of employers surveyed considered knowledge of data and device protection a priority digital skill to look for when hiring new employees, exposing heightened concerns amongst British businesses around cyber and information security.

Digital Amnesia frees up space for creativity

Digital Amnesia, the experience of forgetting information entrusted to a digital device, is found to offer a significant business benefit in a world where data overload reduces our ability to take in new ideas and think creatively.

A study by Kaspersky Lab found that the use of smartphones, tablets and laptops to outsource some of our more mundane memories can help unleash this frozen inspiration.

Nearly half (46%) of the business professionals surveyed say that the more detail they have to remember, the less creative they become. At the same time, three-quarters believe that it’s worth hanging on to all those details since they contain the seeds of future creativity. Many employees reconcile this apparent contradiction by using their devices as a complementary long-term memory store.

Digital Amnesia allows business professionals to free up mind space for creative thought while at the same time building up an external, digital bank of facts that will fuel future inspiration. Two-thirds (63%) say that some of their best ideas have come from rediscovering information they had stored on a device and then forgotten.

Varied health of MSBs across the UK

Medium-sized businesses (MSBs) in the North and South appear fighting fit, yet those in central and satellite regions are being left out in the cold.

UK Bond Network analysed data from the department of Business, Innovation and Skills (BIS) on the growth of MSB numbers, their employment levels and turnover to rank each of the 12 UK regions over the last three years (2012 to 2015).

Despite continued rhetoric about the North / South divide, the North East and North West pipped the Southern regions to the post to take first and third place respectively. The North East performs well across key health indicators, ranking first for growth in regional employment (11.5%), second for growth in the number of MSBs (8.6%) and fourth for their increase in turnover (9.3%), while the North West is third for both the increase in MSB numbers (7%) and growth in regional MSB employment (7.2%).

Sole traders may lose out on tax clampdowns

The Government’s Budget announcement, which sees a crackdown on personal service companies (PSCs), will have a knock on effect on sub-contractors further down the line.

This is the warning from John Painter at the UK200Group of independent chartered accountancy and law firms.

Owners of one-person businesses save tax by paying themselves a minimum wage and making the associated national insurance contributions (NICs), and then collecting the remaining profits as dividends. The technique is widely used by sub-contractors and also, more controversially, by high-ranking employees of large corporations, highly-paid celebrities and even public sector bodies such as the NHS as this saves both employees’ and employers’ NIC on this income.

Chair of UK200Group’s Property and Construction Industry Group and Partner at CB chartered accountants Mr Painter said: “Construction companies and other outsourcing firms will be dragged into the PSC clampdown. The Chancellor, as well as recent news headlines, seems to have become fixated on a few high profile media personalities and high-ranking public sector chiefs who were using this as a tax loophole.

“Sadly many hard-working sub-contractors in the construction sector will now find that they will also be hit hard, which I don’t believe was the original intention of the change in PSC rules. The construction sector’s flexible work force is one of the main factors that allowed this country to come out of recession quicker than many of its EU neighbours.”

Hiring slows as EU referendum looms

The recovery of the jobs market has slowed significantly as uncertainty surrounding Brexit may have dampened demand for new hires.

The latest UK Job Market Report from shows that February saw a total of 1,116,202 job vacancies advertised in the UK, down 10.3% from the 1,244,772 seen three months earlier in November 2015. Employer’s enthusiasm to hire has cooled over the last three months as uncertainties within the jobs market, particularly a potential Brexit and the impact of the national living wage introduction, are creating an unpredictable environment. Prior to November, the jobs market saw ten consecutive months of improvements in job openings, but this trend has now faltered. This was further evident in a somewhat sluggish seasonal monthly improvement of 3.4% from 1,079,711 in January – significantly behind the 4.2% monthly rise previously seen in 2014 and 2015.