SMEs need help to hire apprentices, says report » SMEInsider

SMEs need help to hire apprentices, says report

The skills shortage in the UK is becoming an increasingly acute problem in many industries, particularly for UK SMEs , according to new research.

The study by Close Brothers has found nearly a third of SMEs (31 per cent) feel their workforce does not have the skills their business needs.

Additionally, well over half (55 per cent) do not believe they will be able to find suitable recruits to address this, due to a skills shortage in either their industry (43 per cent) or region (12 per cent) .


Apprenticeships could bridge gaps

One way of investing in new talent and working to close the skills gap is through apprenticeships, but the Close Brothers Business Barometer found only one in 20 (5 per cent) of companies planning to take on new staff in the next year will look for an apprentice.

Worryingly, the survey of 900 SMEs also found three quarters (75 per cent) do not have an apprentice programme in place and over half (52 per cent) don’t plan to start one. Of those SMEs that wanted to hire an apprentice, the biggest reason for not doing so was: cost (49 per cent), red tape (19 per cent ) or lack of time needed for training (14 per cent).

According to recent reports, SME bottom lines are also being squeezed by a number of macro-economic issues, further affecting their ability to hire apprentices. The strong pound continues to affect exports , while speculation around rate rises is causing uncertainty around borrowing .

With the Bank of England’s decision to keep interest rates at 0.5 per cent for the 80th month in a row, speculation continued on when exactly the rise will come.

Alongside this, the hope of a radical overhaul of business rates was dampened by speculation that it may be slipping down the government’s agenda . All of which recent reports say are negatively impacting SME growth and thus their ability to spend on hiring.


Multiple obstacles

Stephen Hodges, CEO, Close Brothers Banking Division commented: “Despite a clear need for more skilled workers, hiring apprentices to fill this gap simply isn’t possible for the majority of SMEs.

“Through the thousands of SMEs we work with across the UK, we see the issues of cost, red tape and a lack of time affecting their ability to hire the entry level candidates they need. The recent moves by the government, including the apprenticeship levy, to grow the number and quality of apprenticeships are very welcome.

“Big business has a crucial role to play in bridging the skills gap and hiring young people through apprenticeships but, we know from this research and our own experience, SMEs need more support if they are to do the same.”

  • Michael Smyth

    We are a company that would like to consider implementing an apprenticeship strategy for our future growth. What this article does not do is point SME’s like us on how to start? We have neither the finances nor time to learn by our mistakes so how should we proceed?

    • Kimberley Guest

      Michael – I am looking at the issue from the other end of the spectrum, reaching SME’s with our services that de-risk and support business. any advice on how to ‘find’ you and others ?

    • Sue Mills

      Michael, I would suggest that a good starting point would be your local FE college, who should be able to give you advice and help

    • Hi Michael. Thanks for your comment and its a good point. SME Insider has a sister-site called Apprentice Eye that has lots of helpful tips for SMEs hiring apprentices – .If you also look at the link below you could find something useful. Hope it helps:

      • Michael Smyth

        Thank you Fraser, will do

  • Mick Crossley

    Michael – There are a number of Training Providers across the country with the pedigree to offer independent information, advice and guidance to help SME’s through all the jargon and minimise their risks on taking on an apprentice. We operate in the Sheffield City Region and have a strong reputation for supporting all our customers, but not all are as open and honest has us, so like anything I’d advise checking them out and get references! Not all that glitters is gold……

    • Michael Smyth

      Thank you Mick. I’ll start searching for Training Providers in our area.