By Russell Gould, Managing Director, Everline
Recent research conducted at Everline in association with the Centre for Economics and Business Research, shows that the UK economy as a whole is losing out on £18 billion due to small businesses being unable to fill their available vacancies because of a lack of relevant skills. This is worrying given that the Small Business Tracker also finds that the number of small businesses with job vacancies is at its highest level since 2004. The report sheds light on some of the reasons behind this skills gap and on what needs to be done to address it in order for small businesses to prosper and drive the UK economic growth.
Small business decision makers are spending over 100 hours a year looking for suitable candidates, training new members of staff and developing and supporting their existing members of staff. This time equates to £3,160 of potential revenue lost in economic terms and represents precious time and money wasted that small business owners could be dedicating to the strategy and growth of their business. Is this skills gap therefore hindering their ability to grow? What can we do to fill this skills gap and what is the role for small businesses?
The lack of correlation between the education and employment sectors is clearly partly to blame for the skills gap. It is widely argued that greater co-operation between schools, colleges, universities and the commercial world needs to be more formally established by central and local government in order to address the issue. The education system is producing candidates with skills that do not reflect specific workplace requirements. The problem is not just confined to ‘hard’, technical skills such as engineering, web development or the whole host of other areas of the economy where we do not have enough young talent. There is also a wider issue around the ‘soft’ skills required to become a useful employee; the capacity to listen and learn or to work as part of a team.
The question of wage is also important. They are not rising in line with living costs and businesses might need to offer higher salaries to attract the right talent. A greater value needs to be put on attracting and also keeping the right staff. The fact of the matter is that talented, skilled individuals do cost more. Employing just a few of these higher value workers could be really beneficial for small businesses as other employees will quickly learn from them. Although this may seem unrealistic for small businesses, it does offer a return on investment in the long run when decision makers trust their team to do the work and can focus instead on developing and growing the business.
In addition, establishing an effective recruitment process that suits the business’ needs will help to identify the most suitable candidates for a role and consequently grow the business. Small businesses must understand where their ideal candidates are engaging online, whether that is Twitter, LinkedIn or any other platform, and ensure they are present there too. As well as making their recruitment more targeted, these tools are also often far more cost effective than going through traditional recruitment channels.
Once small businesses have found the right staff members and have established a good team, it is important to make sure staff are still keeping up to date with new skills and technologies and up to speed with developments and trends in the relevant space. Having a structured training programme is essential to stay ahead of the competition and also to keep staff motivated and engaged. However, as a small business, funding training courses can be expensive especially if they are only relevant to a few members of staff. During a roundtable discussion on the findings of our research with the Cebr, Ian Brinkley, Chief Economist at The Work Foundation, suggested that small businesses need to collaborate more and share the cost of training by organising larger sessions with nearby companies that have the same requirements.
Our report also highlights that small businesses are planning to increase their hiring over the next quarter and into 2015, so they must take advantage of the economic upturn and allow their business to grow. Small business have a lot to offer candidates and are driving growth in the UK but more needs to be done to fill the skills gap. The Government needs to ensure greater correlation between the education of the future workforce and the needs of the businesses they will be working for but small businesses also need to make sure they have the correct recruitment processes to attract and retain talent. A skilled workforce is the key to growth and an extended team should be an asset, not a hindrance to a business.