HR · 28 January 2016

Micro firms leading the way on training but suffering most from skills gap

Micro firms leading the way on training
Small businesses provide twice as many days of training for each worker being upskilled

The UK’s smallest firms are suffering the most from a shortage of workers with the right skills, according to a new survey by the UK Commission for Employment and Skills (UKCES) – despite providing more training to employees than larger businesses.

The research shows micro firms leading the way on training, providing twice as many days  for each worker being upskilled than larger enterprises do. Small companies also spend more on training per worker – though the report’s authors argued that this is due to micro organisations’ lack of buying power.

However, almost one third of vacancies in micro firms were described as “hard to fill” by owners because of a lack of skills, qualifications or experience amongst applicants. In contrast, just 18 per cent of big companies reported having this problem.

Mike Cherry, policy director for the Federation of Small Businesses (FSB), said: “The report demonstrates that smaller businesses are playing a part in upskilling the UK’s workforce. However, in light of major changes to the way business support is delivered in England, we need to make sure these businesses continue to get the support necessary to train people.”

Steve Hill, director of external engagement at The Open University, added: “The UK is a highly-skilled economy but the pace of technological and economic change means that there is a growing need for upskilling and retraining current employees. Both business leaders and universities should consider the multiplicity of learning options they can employ to keep pace with these changes.”

But the UKCES report also cautioned that some firms are not making the most of the skills employees already possess. One in three employers reported at least one member of staff whose skills were underused.

Additionally, shortages within organisations of the sort of leadership abilities which could allow managers to better use people’s talents were cited in relation to nearly three-fifths of all skills gaps within firms’ existing workforces – with “managing and motivating other staff” and “persuading or influencing others” commonly cited as lacking.

Cherry added: “Smaller businesses should pay attention to the UKCES recommendation for greater investment in management and leadership skills. This has been an area where the UK has traditionally trailed behind our international competitors. By increasing investment in leadership and management training small firms can improve business productivity and competitiveness.”

If you’re looking for funding to invest in employee training, have a look at our guide to grants which could help.

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Hannah Wilkinson is a reporter for Business Advice. She studied economics and management at Oxford University and prior to joining Business Advice wrote for Kensington and Chelsea Today about business and economics – as well as running a tutoring company.