Growth being hampered by skills shortage

August 4, 2014 3:14 pm

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The latest Federation of Small Businesses’ Small Business Index shows a growing skills shortage in the workplace.

Now identified as a significant barrier to growth for small firms, it is said to be hampering growth for almost one third of those surveyed, with construction and computer services particularly hard-hit.

To address this increasingly significant issue facing the UK labour market, the FSB wants to see the business and education community working more closely together to ensure young people are ‘work ready’ and understand the demands of the world of work.

Employability skills must be embedded from an early age; the labour market has changed dramatically in recent years and businesses are adapting to that change but the education system needs to catch up. Reforms must be completed to create a business-led, high quality apprenticeship system that provides a real choice between vocational and academic routes. This should be for the long-term and aspire to match standards of our leading competitors such as Germany.

Traineeships must be used as a credible alternative to a formal apprenticeship. Despite the challenges around skills, the survey of almost 2,500 businesses shows confidence at a record high with year-on-year gains seen across the whole of the UK. Professional services and technology continue to display the strongest optimism, with significantly good news around the manufacturing sector.

John Allan, National Chairman, Federation of Small Businesses, says:  “As the labour market continues to tighten alongside the economic recovery, skills shortages will continue to be an increasing concern for more businesses. While this helps to boost the wage bargaining power of workers with the right skills, it poses a risk to the momentum of economic growth and once again underlines a long standing structural weakness in the UK economy.

“Despite the emergence of a skills shortage, these results show small firms are still feeling very confident, with every intention to invest and grow. This will provide further momentum to the recovery, especially in terms of jobs growth.”

To help plug the skills gap in Ashfield and Mansfield we have developed graduate, undergraduate and apprenticeship schemes which local Small and Medium Enterprises can benefit from: Graduates into Enterprise, Aim Higher and Apprenticeship Grant.  All these schemes represent opportunities for your business to improve skills levels, improve productivity and grow.

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