What will be the biggest challenges faced by SMEs in 2015?
Research shows that small business employment is at its highest since 2004. In spite of uncertain economic conditions in other parts of the world, more and more British small businesses are reporting a faster rate of growth than before, are looking to hire more staff to expand further this year.
Yet, it is also clear that while many small business leaders feel optimistic about the future, they are also faced with a series of roadblocks which might prevent them from capitalising fully on this growth opportunity.
Competition for highly-skilled staff
The Small Business Tracker, a research collaboration between Everline and the Centre for Economics and Business Research (Cebr) highlights that the UK economy is losing out on £18 billion because small businesses are unable to fill their available vacancies. The biggest challenge is the lack of talent with relevant skills.
In some high-growth industries such as web design or app development, for example, small businesses are often competing for talent against much bigger players, and unable to match the salary and benefits packages that their larger counterparts use to attract it. A small business might have the ambition and vision for growth, but not yet the proof of success that would make a candidate choose that company over a much bigger rival.
Yet, the fact of the matter is that talented, skilled individuals are in high-demand and cost more for a reason. While it might not be financially viable for a small business to hire only very skilled individuals, they should invest in a few of these highly valued workers. Not only can these employees accelerate the company’s growth through the use of their own expertise, they are also able to share their knowledge amongst the rest of the team, making a lasting contribution to the business.
Has the government done enough to help?
The technology and engineering sectors are amongst those where the government has taken steps to help close the skills gap. The goal is to safeguard the UK’s economic growth and ensure that we are able to compete against the established technology heavyweights such as the US, and the emerging engineering powerhouses of Asia.
In London alone, there are now 34,000 digital technology businesses, all competing for the brightest minds to give their business a competitive edge. Through an overhaul of the STEM curriculum and the introduction of coding in classrooms, the government aims to address the shortage of talent, supporting the growth of the UK’s flourishing technology start-up space.
But more needs to be done. With the general election just a few months away, I hope that the new government will prioritise policies that will help small businesses across industries to build a workforce with the skills that will drive their future growth.
How to retain great staff
The barriers for growth that small businesses face are not just about finding new talent. The Small Business Tracker found that decision makers spend over 100 hours a year in total looking for suitable candidates as well as training new members of staff and developing and supporting their existing members of staff. This equates to £3,160 of potential revenue lost in economic terms – time and money which small businesses should use to work on their strategy or to develop new products or services.
That is why it’s crucial that small businesses place greater value on keeping great staff too. This doesn’t have to mean big pay rises – policies and programmes that boost staff morale, help employees grow their skills set and offer them a better work-life balance are often very well-received.
Allowing staff to work flexibly – from home every now and then, or four days a week instead of five, for example – might make a huge difference to an employee’s travel costs and job satisfaction, making them more committed to the business, and consequently improving their productivity.
As technology continues to permeate all aspects of our lives, it is more important than ever for small businesses to ensure that their staff is keeping up to date with new skills and trends that shape customers’ expectations in the always-on, connected world of mobile devices and social networks. By always keeping an eye on what is coming behind the curve and equipping their workforce with the right knowledge and skills, businesses are able to make the most of new opportunities and stay ahead of competition – while keeping staff motivated and engaged.
Working together to propel the UK’s economic growth
Ultimately, a skilled, motivated team is a huge asset to any business. Small businesses are the engine of the UK economy and have a lot to offer to candidates, but more needs to be done to fill the skills gap and make it easier for small businesses to attract new talent and retain good staff. We need to work together to create a more skilled workforce so that businesses are able to make the most of the UK’s economic upturn.