British businesses are finding it increasingly difficult to find skilled staff, according to a new report, a problem that may worsen as Brexit negotiations begin next year.
The latest report by Albion Ventures suggests that whilst 50 percent of small businesses with over five employees planning to grow their headcount over the next two years, finding skilled staff tops the list of challenges business owners face.
The skills shortage is felt most strongly by London-based small firms, followed by those in the South East and the North West. On a sector basis, SMEs in the manufacturing industry reported the highest level of concern about finding skilled staff, followed by those in the technology and telecoms sector, with construction businesses in third place.
The skills shortage has already been raised as an issue post-Brexit by the construction industry. In a letter to Brexit minister David Davis, groups representing Britain’s surveyors, architects, planners and builders wrote:
“We are in the grip of our worst construction skills crisis in almost 20 years,” said Amanda Clack, president of the Royal Institution of Chartered Surveyors.
“There is a real concern within our industry that if access to a skilled workforce is further restricted, Britain could stop building.
“My colleagues and I would urge government to keep this at the forefront of their minds when they come to negotiate our withdrawal from the EU.”
This is the first time that SMEs have identified a shortage of skilled staff as the biggest obstacle to growth, ahead of red tape and regulation ranked in second and third places in 2016. Political uncertainty and leaving the EU were ranked in fourth and sixth place respectively.
According to the fourth Albion Growth Report, which is based on interviews with 1,000 SMEs and sheds light on the factors that create and impede growth in post-Brexit Britain, the biggest skills gap reported by 26 percent of SMEs is marketing, followed by new technology at 21 percent and business planning at 17 percent. The smallest skills gap is in Financial Management with only 9 percent of small business owners reporting problems.
Mayor of London Sadiq Kahn also raised the issue in a speech to the London Assembly. He said:
“One million EU citizens live and work in London and our economy relies on them,” Khan said.
“Because this government is using them as a bargaining chip, there is real uncertainty over how many will stay after Brexit. We could be left with a chronic skills shortage that hits London more than elsewhere.”
On a regional basis, entrepreneurs in the East Midlands are the most underpowered in marketing with a third (32 percent) lacking expertise in this area, followed by those in the West Midlands and the South West with 30 oercent.
Patrick Reeve, Managing Partner at Albion Ventures, commented:
“A shortage of skilled staff shows that the growth pressures on the economy are at the most sophisticated end of the scale, which is precisely where we can expect to generate the biggest returns. The economy is coming under capacity constraints at a time of considerable political uncertainty.
“Policymakers charged with deciding our post-Brexit future must recognise that many of the skills that enable us to compete in a fast-changing and increasingly competitive world are in short supply and our best chance of overcoming this challenge is by building on the UK’s first class reputation as a home for global talent.”