Skills shortages plague small and medium sized businesses across the world

Small and medium sized enterprises across the world are suffering from a lack of skilled labour, according to the Global Business Monitor report from Bibby Financial Services.

Findings of the annual report, which surveys SME owners and decision makers across Asia, Europe and North America reveal that skills shortages are the number one issue facing businesses in 2017. Almost half (49%) of all respondents say that a skills shortage is the greatest challenge they face, rising to 73% in Germany and 71% in the Czech Republic.

Across industry sectors, wholesale SMEs were least likely to be affected by the issue (37%), while construction businesses were most likely to be impacted (63%).

Richard Carter, BFS CEO for Europe and Asia, said:

“Many economies rely on the movement of labour to plug skills gaps, but evident shifts towards protectionist policies in recent times could see the flow of skills dry up.

“It’s clear that this is a key concern for many small and medium sized businesses across the world.”

In an attempt to plug the gap, many SME owners are investing in staff training and development. Findings reveal that existing staff training is the primary area of investment among SMEs in 2017 (59%), followed by digital technology and employee recruitment (50%).

Richard added:

“Many business owners are addressing the issue by upskilling existing staff. While it is fantastic to see businesses investing in skills development, this isn’t a silver bullet. It can often take months or even years to train staff for highly skilled activity.

“In the meantime, there’s a very real threat that businesses will have to make do with existing capabilities, and this could impact output in the short term.”

The annual Global Business Monitor study surveys SME owners and decision makers in Canada, the Czech Republic, France, Germany, Hong Kong, the Republic of Ireland, the Netherlands, Poland, Singapore, the UK and the U.S.

Other key issues facing businesses in 2017 include rising costs (48%) and government regulation (44%). Almost a third (31%) said cashflow is their greatest concern in 2017.

Richard Carter said:

“Businesses are currently facing a heady cocktail of issues arising from global uncertainty, including rising costs and government regulation.

“Such issues distract SME owners and their teams from growing their businesses and spotting the next expansion opportunity. However, there is support available for businesses struggling with the impact of training and recruitment costs and the impact they have on cashflow.”

Nihal Opatha, director at Ace Vehicle Deliveries, said:

“We are increasingly struggling to find people with the right experience and work ethic, which is a significant issue for us. It is causing a bottleneck, where we don’t have as many drivers as we would like to in order to cope with demand.

“EU workers are a vital talent pool for us but many seem to have left the UK since Brexit. To cope with this, we are having to spend around twice as much as last year on recruitment such as advertisement and mentoring initiatives, which is pushing up costs for the business. With Brexit fast approaching, it seems like the problem is only likely to worsen.”