How to solve the SME skills shortage

By Jane Gratton, below, Head of Policy at the British Chambers of Commerce and Viren Patel, Director of the Business Development Unit at The Open University

The skills gap continues to widen, affecting businesses of all sizes and sectors across the UK. While skills shortages are higher in large organisations, they are more likely to have plans to address the issue than small and medium sized enterprises.  But there are some key things SMEs can do to resolve the problem. The Open University’s (OU) Business Barometer report, published in partnership with the British Chambers of Commerce (BCC), revealed that more than two-thirds (68%) of SMEs are currently facing skills shortages, and whilst reported skills shortages are higher (86%) in large organisations, SMEs struggle to implement plans to address this issue.

Surveying over 1,300 organisation leaders from all sectors and sizes, findings show that more than half of large organisations will increase investment in staff training over the next year compared to 47% of SMEs. And whereas 90% of large organisations have implemented some form of written plan around recruitment, training, addressing skills shortages, sustainability or diversity and inclusion, only 43% of micro-organisations have any such plans.

While investing in staff training and planning may not seem an immediate priority for smaller businesses, it can alleviate existing pressures and ultimately boost the bottom line. When SMEs provide appropriate training opportunities to workers, it is known to increase loyalty and staff retention rates. However, currently very few organisations are planning proactively for skills beyond their short-term requirements. With many SMEs having no access to internal HR support, not only do they find it difficult to assess skills needs linked to business needs, but there is also a risk that firms may not be fully utilising the investment they have made in the skills of their existing teams.

So, what can SMEs do to bridge their skills gap? Jane Gratton and Viren Patel offer their expert advice on the topic:

  • Know your business needs – Taking the time to assess and understand the skills you have in your workforce now, and where there are gaps, is time well spent. As your workplace changes and develops – for example, with the introduction of new technologies, productivity challenges and environmental priorities – ensuring your team has the right skills will put you in the best position to thrive and grow.
  • Invest in people management – Many smaller firms do not have access to dedicated HR or learning and development resources and find it more difficult to identify and prioritise workplace training and development needs. The Business Barometer report found that just over two thirds (68%) of micro-organisations are assessing skills needs, compared to 90% of large organisations, and fewer than one-in-ten micro-organisations are implementing structured audits or consulting with HR and recruitment agencies, educational institutions, or organisations within their supply chain. Investing in people management skills will help to fully engage your workforce in learning and development opportunities helping everyone to contribute to the growth and success of your business.
  • Try flexible training options – Sometimes, the rigidity of some training options can be off putting and difficult for SMEs and their employees to commit to. So, finding a training provider that can flex to meet the needs of your business is crucial. The OU offers online learning, alongside face to face education on some programmes, as well as modular approaches that offer a shorter and more tailored solution. Businesses can similarly sponsor someone to do an Open Degree where employees can access a range of modules in different subject areas, allowing them to build the qualification around the needs of their role as it evolves through the programme.
  • Know your options – There are a range of training options available to help upskill your workforce from full length qualifications to shorter, more flexible and modular courses that help people learn specific new skills and knowledge quickly.

There are very short, targeted courses that can be accessed quickly and easily, whatever the learner’s prior level of knowledge, and that can be built over time into a full qualification.  Microcredentials develop cutting-edge knowledge across specialised subjects which can be applied immediately to the workplace in just a few weeks. Skills Bootcamps are government funded courses that can help job seekers and, in some cases your existing team members, to upskill quickly to meet the needs of your business. And, of course, there are longer qualifications such as apprenticeships and the new T-levels that help you bring young talent into the business as well as developing your adult workforce. Free training resources are available from providers such as OpenLearn, on a range of disciplines and topics for people aiming to upskill both professionally and personally.

SME Publications/ SME XPO 2024

When looking to develop occupational competence, smaller firms can access 95% of funding for apprenticeship training for employees of all ages. And in many cases, you can access 100% funding by linking with a larger firm which is willing to share its apprenticeship levy funds to boost skills in the local area. This is a great opportunity to develop relationships with larger firms in your supply chain and your local Accredited Chamber of Commerce can help connect you.

  • Speak up and shape the skills system in your region – The Department for Education is rolling out Local Skills Improvement Plans (LSIPs) as part of the Skills Accelerator programme in England to give employers a stronger voice in planning for skills in their community. LSIPs bring together businesses, training providers, funders and stakeholders to ensure the right training is available, where and when people need it. The aim is to ensure that people are training to fill the job vacancies we have right now as well as the new job opportunities that employers are developing for the future. Through LSIPs, we can see the trends, patterns and demand needed from businesses to help solve skills crises locally, regionally and nationally as well as offering help and support to individual employers. We need businesses of all sizes and sectors to get involved in their local LSIPs. Contact your local Chamber of Commerce for more information.
SME Publications/ SME XPO 2024