Skills shortage threatens SME growth

Thousands of small and medium-sized businesses (SMEs) in the UK are suffering a skills gap in the workforce which they fear could stunt growth, limit competitiveness and dent future profits, according to a new report from Lloyds TSB Commercial Banking.

The study shows that six out of ten SMEs believe there is a shortage of skills amongst their workers and a quarter of these feel that there are gaps in sales and marketing skills.

One in five believe IT know-how is an issue; and almost one in six cite management/leadership skills as a key area for skills development.

Just over one in ten consider project management skills a cause for concern and a near equal amount mention team building skills as an area that could improve.

Businesses have a number of reasons for not developing skills amongst their workers; the main obstacle is budget constraints, although more than a third blame time pressures.

Just over one in ten say they have difficulty in finding the right training and a similar number are concerned about investing in developing skills for employees who may soon leave the business.

In summary, main worries are that a lack of skills will:

• damage future growth potential (44%)
• inhibit their competitive edge (39%)
• make them less profitable (37%)
• stifle innovation (24%)
• harm staff morale (19%)
• negatively impact staff retention (12%)
• reduce recruitment opportunities (11%)
• make them less attractive to investors (9%)