The government has made much of its “levelling up” agenda and businesses and communities in parts of the North of England and Midlands have been waiting to see what practical economic benefits this initiative will bring.
However, could a lack of skills and investment opportunities scupper the government’s ambitious plans? And, what do these shortages mean for small and medium-sized enterprises?
According to new research from the Ligatum Institute, a think tank, in the so-called “Red Wall” constituencies where voters made a historic and largely unpredicted switch from Labour to the Conservatives during the last general election, approximately one third more adults have no qualifications compared to those in the rest of the country.
The research also revealed that SMEs outside these areas are able to borrow 42 per cent more than SMEs operating within them. The value of loans provided to SMEs by major banks is £3,205 per person here, compared to £4,555 per person nationally. Partly as a result of this discrepancy, business startup rates are 17 per cent higher outside the "Red Wall".
Alongside, the average UK SME faces a skills gap that would impact total revenue by £145,000 in 2020, rising to £318,000 in the next five years, according to a survey by recruitment consultancy Robert Half.
How can SMEs overcome these challenges?
- Being flexible in your hiring strategy is important according to Matt Weston, MD of Robert Half UK. “For those looking to hire, SMEs will need to act quickly to secure top talent and adopt a flexible hiring strategy,” he commented. “The solution to the war for talent is a blend of permanent, temporary and interim employees.”
- The government announced two schemes in the last Budget aimed at providing SMEs with the kind of online training that is normally only available through business schools. Help to Grow: Management and its sister programme, Help to Grow: Digital, have been developed in partnership with industry and combine a national curriculum delivered through business schools with practical case studies and mentoring from business professionals. Taking place over three months, and heavily subsidised by government, the programmes aim to equip SMEs with the tools to improve their management skills and grow their businesses.
- Consider hiring an apprentice. Although apprenticeship numbers have been up and down over the last few years, generally the picture is improving. The government offers help and funding to companies which recruit apprentices.
- Consider taking on older workers. A third of the workforce is now thought to be over 50 but, recently, there were still some 80,000 people in this age group who were looking for work, according to the Centre for Ageing Better, and the organisation fears that: “The Coronavirus pandemic risks halting – or even reversing – the gains which have been made in the employment of over 50s in the last 20 years.” Older workers can bring the benefits of life experience and perspective to an organisation as well as acting as informal mentors to younger staff.
- Make upskilling and reskilling part of your ongoing business plan. Don’t forget that soft skills such as communication, teamwork, problem-solving and dependability can be every bit as important, if not more so, than academic or specialist skills.
- The Ligatum Institute’s findings on finance for SMEs in "Red Wall" areas may showcase growing issues. However, the good news is that there is a wide range of finance options for SMEs from the government and other sources that can hep with recruitment and training.
The government is clearly aware that all SMEs, especially those in these particular areas face particular challenges as result of Brexit and coronavirus there are more opportunities than ever for smaller businesses to access financing and support for recruitment and training.
