The spotlight has once again turned to the skills shortage in the UK, as British businesses seem to be facing an uphill battle to find the right people to fill positions.
In fact, according to Zurich’s latest SME Risk Index analysis, published last month, a whopping 40 per cent of small businesses cite workforce challenges as a major concern for their business, largely because of a lack of available skills and talent.
This is a huge rise from the eight per cent of SMEs that flagged this a major worry back in October 2016, indicating that the fallout over Brexit is making business owners nervous about the future of their existing workers, as well as their access to talent from overseas once the UK leaves the European Union next year.
“Uncertainty regarding the role that the UK will play in the international markets following Brexit has clearly rocked the confidence of many business owners, and initial Brexit horse-trading has done little to quell concerns,” says Paul Tombs, head of SME Proposition at Zurich.
“Resolution around movement of skilled workers and economic stability which can help address issues around currency fluctuation and foreign competition must be right at the top of the government’s agenda.”
Tombs describes small companies as the “lifeblood of the UK economy”, pointing out that it’s unlikely SMEs will be able to see a boost to growth without some kind of resolution.
Concerns over Brexit have arguably shed a light on the fact that many school leavers in the UK aren’t equipped with the skills our business community needs – an issue which the government’s apprenticeship levy hopes to alleviate.
The levy, which was introduced last April, affects companies with a wage bill of at least £3m, and essentially funds millions of apprenticeships across the country. While smaller companies don’t have to pay the charge, they can take advantage of the pot of money paid for by larger employers.
Peter Alderson, managing director of business finance provider LDF, says: “While the levy applies to larger businesses, we shouldn’t forget the benefits that apprenticeships can yield for smaller businesses. They have the advantage of agility on an unparalleled scale and with much less red tape to contend with internally. Small companies are often able to react more quickly to business need – if a skills shortage is identified, an apprenticeship could well be a good option.”
While the scheme has faced its fair share of criticism, many employers see apprentices as invaluable to providing a steady stream of staff who have been trained to meet the standards required for their jobs.
In fact, some fast-growing companies – such as those that make up City A.M.’s Leap 100 businesses – have praised the scheme for helping young people to kickstart their career, while also driving momentum for businesses that want to develop the skills of their staff.
But there’s also evidence to suggest that employees are more likely to remain loyal to businesses that have taken the time to invest in their future by offering quality training.
Alderson adds: “Apprenticeships shouldn’t be seen as a short-term solution, as with any recruitment requirement, there is a long-term benefit. In many businesses, there is also the potential for these individuals to work their way up to hold much more senior positions and that isn’t confined to manual skilled roles, IT and business admin are also among some of the largest sectors using this.
However, with apprenticeship numbers declining, Alderson says this begs the question of whether the current system is working, particularly if the aim is to reach three million new apprenticeships by 2020.
But these fresh-faced recruits can have a positive effect from a financial perspective too, with a study from the Centre for Economics and Business Research indicating that every apprentice boosts a company’s productivity by an average of £10,000 per year.
So as National Apprenticeship Week looms on the horizon, now is the time to look at the huge benefits of getting young people on board. Essentially, apprenticeships are about investing in the future of our workforce, and in the process, we are investing in the future of British businesses.