Shortage of skilled staff ‘biggest growth obstacle’
With 50% 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, up from third place in 2015 according to a new report by Albion Ventures, one of the largest independent venture capital investors in the UK.
The skills shortage is most acute among 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. Conversely, finding unskilled staff has fallen to 15th place in the list of SME challenges.
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 suggesting that small business owners are most concerned with tangible obstacles to growth rather than those over which they have less control.
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 over a quarter (26%) of SMEs is marketing, followed by new technology (21%) and business planning (17%).
Patrick Reeve, managing partner at Albion Ventures, said: “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.”