SMEs stifled by skills shortage and red tape, report finds » SMEInsider

SMEs stifled by skills shortage and red tape, report finds

While British enterprises say that they are confident about their business and the economy, many feel stifled by skills shortages and red tape.

A YouGov survey conducted on behalf of Npower of more than 1,000 SME decision-makers across found that the most pressing business issues affecting businesses today are talent acquisition and Government red tape, as well as energy costs.

The report, which focuses on firms in the manufacturing, retail, hospitality and leisure, and business services sectors, also examined SME expectations of turnover and salary growth, and the measures that they think the Government could undertake to promote their business operations and environment.

There has been encouraging confidence among British SMEs, with significant numbers predicting to grow their workforces and raise salaries – a clear indication of a strengthening economy from the companies that make up 99 per cent of all UK enterprises.

However the research did reveal fears over the amount of red tape and taxes imposed upon SME businesses as well as concerns over the availability of credit and skills, with 49 per cent of businesses worried that tough legislation and regulation will hamper their ability to grow in the next 12 months, potentially putting the brakes on the success of small businesses just as things are looking up.

The study stressed that whilst SME headcount is expected to increase (21 per cent), 33 per cent of SME decision makers are believe that a skills shortage may restrict future business growth over the next 12 months. Other barriers to future growth include lack of bank lending, cited by 47 per cent.

The research also highlighted that whilst SMEs are considering the short term success of their business, the long term succession plan is becoming a thing of the past with a staggering 71 per cent of those surveyed saying their businesses have no succession plan in place.

“While we’ve seen a clear acknowledgement of the contribution that SMEs make to UK plc in the recent Autumn Statement as well as through initiatives like Small Business Saturday, this study highlights that there is still some way to go before SMEs can honestly say that they are performing at the level they would like,” said Jason Scagell, director of npower business. “These businesses are often described as the lifeblood of the UK economy and it’s obviously vital that they get the support they need to develop and grow.”

  • Andrew Mackenzie

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