Your SME and the Great 21st Century Skills Shortage

David Southern | Date: November 23, 2016

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Across the UK, businesses are struggling with a very real threat – a lack of access to the SME skills needed to drive the sector's growth

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Described as the engine room of the British economy, SMEs account for 47% – £1.8 trillion – of all UK private sector turnover and employ 60% of workers. So the sector is vital to the country’s continued economic success. But several issues are holding the sector back, the most serious being the SME skills shortage that is restricting growth and productivity.

According to the British Chamber of Commerce, “the majority of the UK’s small businesses want to grow. They want to invest and take on more employees, but they are also pessimistic about the UK labour market’s skill level and flexibility”. This downbeat view is echoed by a recent Close Brothers survey, which reported that just under one-third (31%) of UK SME workforces lack the skills needed by the enterprise.

Demand outstripping supply

This is particular true in the areas of IT, with the UK government stating that demand for workers with digital skills has outstripped supply and that 49% of SMEs are experiencing technical skill gaps. The government also believes that such shortages are not only restricting the growth of technology-focused enterprise but business as a whole.

The shortage has lead to SMEs battling to attract and retain talent, a challenge compounded by the reality that skilled individuals are usually attracted to large established businesses or small ‘exciting’ start-ups, leaving SMEs unable to source the IT-related skills their companies require in the first place. To counteract the threats posed by the skills shortage, a number of innovative strategies are being adopted by forward-thinking SMEs.

The first is to maximise the potential of existing staff and departments, including IT itself. Research shows that 80% of IT spend is wasted on ‘keep the lights on’ activities, tying up staff in day-to-day activities that are low level and unnecessarily time- and labour-intensive. Instead, SMEs are choosing to outsource the management of routine IT tasks to reputable third parties, in turn freeing up internal staff to work on innovative IT projects which boost efficiency and productivity.

Maximising IT potential

The introduction of IT training for current workforces should also be considered to maximise existing digital skillsets and to plug digital knowledge gaps that are acting as a drain on IT resources. Mentoring programmes are another useful ally, where new or inexperienced employees are assigned to senior staff for ongoing guidance.

Expanding the remit of Human Resources is also essential. It should be putting competitive packages in place to attract IT contractors, draw up staff retention strategies and plan now for any future potential vacancies. This will position the company to deal with skills shortages as and when they occur rather than ‘after the event’. In order to make themselves more attractive to potential employees, companies have also been experimenting with the creation of development centres within their organisations, offering talent the promise of a start-up type of environment.

Managing digital innovation

Just as critical as sourcing IT-literate staff to address the SME skills shortage is how digital strategies are deployed within the company. New processes designed to reduce the reliance on IT and its personnel are often pushed out across the entire company too soon, generating potential inefficiencies and waste. Instead, SMEs should roll out any digital process across a limited number of business areas first to test value before committing to a pan-company rollout. This will protect IT’s already limited time and resources while dramatically increasing the chances of a successful deployment.

In an era where skills shortages are hampering business development, such innovative personnel and IT strategies must be adopted to maximise the potential of existing staff and the impact of enhanced digital processes, and to aid in the securing of fresh talent. Only by addressing the skills shortage head on can business hope to continue growing in a market where SME skills shortages pose a very real threat to a sector critical to the UK’s future economic success.

  • Maximise the IT potential of your existing workforce and departments by introducing training schemes and outsourcing core IT maintenance.
  • Create attractive packages and startup-like environments to tempt IT talent.
  • Deploy digital solutions in a controlled, manageable environment to ensure that any existing IT talent is deployed efficiently.

Discover how to maximise the potential of your workforce. Download: Teaming with Talent: The Business Leader's Guide to People Management

Teaming with Talent - The Business Leader's Guide to People Management

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