Five steps to help your business tackle the skills shortage

Businesses around the country are struggling to find and recruit the talent they need. However, there is good news. Here, we break down the helpful sources and actions that businesses themselves can take.
A female kitchen worker in a black uniform reads an order

After decades of concern about people without jobs, the UK now finds itself worrying about jobs without people. According to government figures, the number of job vacancies in Q4 2021 rose to a new record of 1,247,000, an increase of 462,000 from the pre-coronavirus level in Q1 2020.

The reasons for the rise in vacancies are varied. According to the Learning and Work Institute think tank, there are 1.1m fewer people in the workforce than there would have been if the pre-pandemic trends had continued. This is partly because there aren’t as many people coming into the UK to work as was previously the case, and more young people are spending longer in education.

However, there are actions that small and medium-sized businesses can take to tackle the shortage of staff and skills. It’s worth remembering that retention is quicker, cheaper and easier than recruitment and so thinking about how to keep your current talent is essential. It’s also key to remember that what worked when there were more people chasing than jobs won’t work now that the equation has been reversed.

Here are five things that an SME owner or manager can do to tackle the current skills and talent shortage.

(1) Competitor analysis

If you’re competing with other businesses in the same sector or location, you need to know what they’re offering in the way of salaries and benefits. Checking job adverts and talking to local employment advisors can help here. If you can’t outdo the competition on salaries and financial packages, think about what else that you can offer in the way of non-financial benefits and general work culture. Does the nature of your work or your location mean that you can offer potential staff something else that they might find appealing and that won’t cost you too much? If your sector is travel or entertainment, could you offer freebies? If you manufacture something such as food or household accessories, offering your products to your employees free of charge or at a discount rate may also work. The same might be true if your business involves providing a service.

Another key element here is your job descriptions. This is the first impression a potential candidate will have of your business, so it’s important to get each one right. Think about including the salary in your description to be really clear about what you're offering and take the time to get feedback on the accuracy and transparency of the description itself. These small changes can make a big difference when it comes to reaching the best candidates.

(2) Supercharge your skills and training programme

“The vast majority of large organisations have a learning and development budget, compared with just a third of SMEs,” said the Chartered Institute of Personnel and Development (CIPD) in its report Learning and skills at work 2020. Meanwhile, a remarkable 94 per cent of employees say they will stay at a company longer if it invests in their learning and career development, according to LinkedIn’s Workforce Learning Report 2019.

The government recently launched two initiatives to enable businesses to improve their staff training capabilities. Help to Grow: Management is a 12-week programme that is intended to help those in smaller businesses to improve their management and strategic planning skills. The aim, according to the government, is to support some 30,000 businesses over the next three years to develop a growth plan, improve resilience, learn how to innovate and increase employee engagement. You can also learn more about developing your marketing and financial strategies and adopting digital technologies.

Grants are also available for funding training. A good place to start is the Grants Hub, which offers information about grants and loans filtered by location and business sector.

Did you know?

According to LinkedIn’s Workforce Learning Report 2019, 94 per cent of employees say they will stay at a company longer if it invests in their learning and career development.

According to one government survey, 86 per cent of employers reported that they had benefitted from developing relevant skills by hiring apprentices.

In a survey published last summer by EY, nearly half of those asked said that they would consider leaving their job after the pandemic if their employer did not offer flexible working.

An older man in a grey sweatshirt looks over the shoulder of a younger man working at a computer

(3) Explore apprenticeships and internships

Launching an apprenticeship scheme is a great way to recruit talented, enthusiastic people into your business in a cost-effective way while also injecting new energy, ideas and experience. According to one government survey, 86 per cent of employers reported that they had benefitted from developing relevant skills by hiring apprentices. Apprenticeships can also help motivate and encourage loyalty among existing staff – research from the National Apprenticeship Survey revealed that hiring apprentices improved staff retention for 69 per cent of companies.

It’s worth noting that hiring an apprentice does require a commitment from the employer, mainly in the form of providing on-the-job training and support while allowing the apprentice time away from the business for their formal training and education. The government’s apprenticeships website has a wealth of general information. You can also make specific enquiries about help with apprenticeships here.

(4) Flexible working

Flexible working was one of a number of trends that was accelerated by coronavirus and lockdown. In a survey published last summer by EY, nearly half of those asked said that they would consider leaving their job after the pandemic if their employer did not offer flexible working. According to the findings, 39 per cent would like more choice about when they work and 43 per cent wanted choice in where they worked.

At the end of last year, the government launched a consultation on making flexible working “the default”. This could give employees the right to demand this kind of arrangement from their very first day. Research by the CIPD found that 46 per cent of workers did not have access to any form of flexible working in their current role and it has launched a campaign called #FlexFrom1st.

Flexible working for staff and the offer of this benefit to new recruits not only makes their lives easier in a practical sense, but it shows that as an employer you trust them to get on with the job and will not be micromanaging every task. You’ll need to think about updating your technology, scheduling days in the office for face-to-face meetings – and possibly changing your mindset.

(5) Instil a culture of purpose

We all go to work to pay the bills, and perhaps interact with other people, but increasingly, we’re looking for more than that. Prompted again in many cases by the pandemic, more staff are looking for a sense of purpose – what do they and their employer do, even in a small way, to make the world a better place? Instilling a sense of purpose in staff includes a focus on their own personal development, as they take advantage of coaching and mentoring to improve their skills. Learning can be constant and embedded with a training and growth culture. Purpose for some staff could also mean allowing them to do voluntary work, perhaps by taking a day off a month to get involved in charities and projects.

Identifying, recruiting, and retaining staff will continue to be a challenge but it’s one that the leaders of most SMEs can meet by rethinking and refreshing their recruitment policies.

What to do next?

We have a wide range of content dedicated to helping you solve crucial business challenges, but here are some suggestions:

Enjoyed this article?

Sign up to receive more advice and guidance-based content to help you improve your business.