Mind the skills gap

The most common complaint from SMEs was a lack of relevant qualifications, skills and experience among candidates. This shortage is not restricted to small businesses and is harming the growth prospects of many organisations. 

Although there is some help for employers already in place, business groups are demanding that the government takes further action to tackle the problem. 

Perennial issue

According to the FSB, the skills and training deficit is a perennial issue, but far from an insoluble one.

It sets out a roadmap for change on every level, from schools to apprenticeships to workplaces. It warns that apprenticeship starts have tumbled since the introduction of the Apprenticeship Levy. The FSB recommends bringing back the £3,000 incentive to hire an apprentice that existed over the Covid-19 lockdowns, which would encourage firms to hire additional apprentices.

The FSB also wants to see an increase in the corporation tax relief for employers who are training low or medium-skilled employees.

Educational targets

In addition, the business group wants to see the government set targets for education and qualifications into legislation. It says that by 2035 no young person in England should complete compulsory education without at least Level 2 qualifications, and that three-quarters of the working age population in England should have at least Level 3 qualifications. 

Crippling shortages

The British Chambers of Commerce (BCC) also says that rapid reform is needed to tackle the ‘crippling staff shortages’ that have created 1.3 million unfilled jobs in the UK economy.

The BCC has proposed a three-point action plan to tackle the substantial number of unfilled vacancies.

Firstly, it says that firms must be encouraged to find new ways of unlocking pools of talent – by investing more in training their workforce, adopting more flexible working practises and expanding use of apprenticeships.

Secondly, it wants the government to help employers invest in training by reducing the upfront costs for business and providing training-related tax breaks.

Skills wanted

Finally, the BCC says the Shortage Occupation List (SOL) should be reformed to allow sectors facing urgent demand for skills to get what they need. The SOL governs immigration rules according to the demand for skills by both job type and region.

The BCC says the SOL is not currently fit for purpose and should be more flexible to allow it to support firms experiencing recruitment issues.

The Confederation of British Industry (CBI) agrees that the government should urgently update the SOL in parallel to developing genuine strategies for homegrown skills. It says it is time to set out the skills the country needs; consider what talent can be developed at home; and make smart use of immigration to plug the shortfall.

Kickstarting training

The government has introduced some schemes to enable jobseekers to gain the skills they need to get jobs and provide targeted help for young people to get into work. The Kickstart Scheme funds the direct creation of high-quality jobs for young people at the highest risk of long-term unemployment.

It is a £2 billion fund designed to create hundreds of thousands of high-quality six-month work placements aimed at those aged between 16 and 24 who are on Universal Credit and are deemed to be at risk of long-term unemployment. 

Funding available for each job covers 100% of the relevant National Minimum Wage (NMW) for 25 hours a week, plus the associated employer national insurance contributions (NICs) and employer minimum automatic enrolment contributions.

Providing opportunities

Despite the current challenges, many businesses are looking to the future. They must invest wisely using the available government support to develop a skilled, motivated workforce.

We are happy to advise in detail on the best approach to suit your circumstances. Please contact us for more information.