The re-elected Conservative Government has cemented its commitment to backing small businesses early on with the new Enterprise Bill. One of its measures is to cut at least £10 billion worth of red tape over the next five years.
The hope being that this will remove the barriers holding small businesses back in terms of job creation. However, as a small business owner, you will be all too aware that as well as being given the possibility of employing new people, you also need to be able to find individuals with the right skills to plug the gaps in your business.
The Government is well aware of how detrimental the skills-shortage continues to be for small businesses, but until it fully addresses the issue, you’ll need to find other ways to source the right talent, using the additional funds now available.
Skills crisis costing billions
Everline’s Small Business Tracker* conducted in conjunction with Centre for Economic and Business Research (Cebr) found that the UK economy is losing out on £18bn due to 520,000 job vacancies that small businesses are unable to fill. This is because of a lack of relevant skills, with 16% of employers unable to fill a role in November last year due to unskilled candidates.
You will probably find that you’re currently wasting a lot of time and money trying to recruit the right people. These resources could be used far more productively. On average, small businesses spent over 100 hours last year looking for potential candidates and training new and existing staff.
Only 17% said that the staff in their businesses are fully trained in every area of their job role, and only 47% feel comfortable relying on less senior members of staff to take on higher level roles in the business if necessary. This means that small business owners are spending more time on recruitment rather than focusing on expanding their business.
An additional problem is that because highly skilled and innovative workers are more in demand, they can request a higher salary, something larger businesses are more readily able to offer.
Although hiring more expensive individuals may seem like a daunting prospect, it is worth the investment as these employees can use their experience and expertise to share with other team members and help the company’s overall growth and success. You can then dedicate the extra time to customer service, which, in turn, could increase your business’ profit and allow it to grow.
How will the Enterprise Bill help?
The cuts to red tape promised by the Bill will give small business owners the extra financial flexibility they need to bring in employees that will benefit their business and allow it to grow. It is a lifeline for many, particularly sole-traders, who will now be able to afford vital new hires.
There are many people keen to be part of the start-up hype, who without the extra job opportunities, might not have had the chance to work for a smaller company. The reduction of red tape will help to overcome this problem and close the gap in competition for talent between small and large businesses by opening the gate to prospective skilled employees.
The Conservative manifesto also includes provisions to create three million new apprenticeships by 2020 and to take steps to nurture entrepreneurial and digital skills in schools, but this has not yet been set in stone. Even when the legislation is passed, it will take time to have an effect on the small business talent pool.
What can be done in the meantime?
Until the Government’s measures take effect, small business owners need to work extra hard to find the right people for their businesses and get around the skills gap. If you’re struggling, why not take on interns or people for work experience in order to get that helping hand?
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Advertising jobs online to reach those digital-savvy people could also help. Today, if a business isn’t online it’s invisible so creating a strong online presence is essential. Pooling resources and business planning with other small businesses can also all help to boost success.
It is hard to establish at this stage the impact of the Enterprise Bill, but the reduced red tape can only be positive. Make sure you’re aware of the changes and get clued up about how they will benefit you in order to take full advantage of them.
It’s also a good idea to have a business plan in place to know where you most need that additional help and identify exactly where you’re lacking in talent. This way, once the upcoming legislation takes effect and the right skilled workers want to work for your business, you’ll be way ahead of the game.
Article contributed by Russell Gould, COO of small business e-lenders, Everline and ezbob. Everline and ezbob offer customers a simple, frictionless and transparent process. Using up-to-date business data and smart technology to make responsible, real time, automated risk decisions, ezbob and Everline have collectively provided over 6,000 business loans and lent over £60 million to UK small businesses since inception in 2012.
*A bespoke survey carried out by Opinium among 1,013 UK small business decision makers between 27th August and 4th September 2014