Small businesses need to invest in skills

Thursday 28 January 2016

With smaller companies, the employees you have linked to your organisation are an extremely important part of your business model and, looking at the bigger picture, a significant factor in whether your venture is a success.

As there are fewer staff members, the services and standard of work you can offer clients - and propose to potential ones - depends on each individual you have working for you, and the skill set they bring to the table.

This means that smaller firms may have to put increased efforts into recruitment to ensure they get the right talent, especially when they may be competing with bigger firms. 

A new report has shown that highlighted the importance of securing the best people when it comes to smaller businesses. 

The employer skills survey by the UK Commission for Employment and Skills (UKCES) looked at the total number of jobs being advertised and found that more than a fifth (22 per cent) were to solve a skills shortage.

It also found that the number of job vacancies that are unfilled because employers fail to find the right candidate with the right skills has risen by 130 per cent in four years.

This suggests that small companies and even consultants can get ahead if they are able to hone their skills. The high demand for upgrading talent across organisations of all sizes means that people are willing to pay a premium for them.

As a consultant, this means you can charge a higher rate of pay, while small businesses can look to compete with much larger organisations if they are able to offer the right package and isolate ideal candidates.

The report also shows how smaller businesses are key for upskilling the nation's workforce, with firms of this size investing 3.5 times more money per head on training their staff compared to larger businesses. 

Although it may be difficult for smaller firms to provide a salary that competes with much larger companies, they can offer other benefits that aren't possible - or easy to come by - in a bigger organisation.

For example, for candidates with a high level of expertise, autonomy and having the ability to make decisions that impact the business can be worth taking a lower salary. These are things that smaller companies, with far fewer employees, can easily offer to prospective candidates. 

Speaking about the report's findings, policy director at the Federation of Small Businesses (FSB) Mike Cherry said many smaller firms can struggle to find staff with the skills they need, especially across acute sectors like construction.

This, he said, can pose unique problems for smaller businesses. With fewer staff, it can increase workload for employees and also raise operating costs.

Mr Cherry concluded: “Smaller businesses should pay attention to the UKCES recommendation for greater investment in management and leadership skills. This has been an area where the UK has traditionally trailed behind our international competitors. By increasing investment in leadership and management training small firms can improve business productivity and competitiveness.”

By Victoria McDonnell

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