Research from Robert Half UK has found the average small and medium-sized business (SME) in the UK estimates that it will spend £160,000 to fill the skills gap in their organisation in the next 12 months. The research, commissioned to launch Robert Half UK’s 2020 Salary Guide highlights the need for SMEs to address the skills gap quickly. The study also found that the average UK SME faces a skills gap that would impact total revenue by £145,000 in the next year, rising to £318,000 in the next five years if not addressed.
Over two thirds of SMEs (67 per cent) said they plan to invest in training and development to fill the skills gap in their organisation, followed by hiring both permanent (44 per cent) and temporary (31 per cent) staff. The skills gap is one of the most pressing issues facing UK businesses today. It has widened as a result of macro challenges, including a shrinking talent pool due to Brexit, increased digitalisation and the future of work.
The skills gap caused by ongoing digitalisation is especially concerning for UK SMEs. Half (48 per cent) cite digital transformation as the most pressing change facing their business, with seven in 10 (72 per cent) admitting that they struggle to find professionals with the digital skills they require.
SMEs are investing in training and development to upskill existing staff members with the technical skills they need to tackle the digital skills gap, and three in five (63 per cent) say that budgets to train staff on new technologies have increased, compared to two years ago.
In addition to training and development, a significant proportion of SMEs are turning to the temporary hiring market to fill the skills gap created by digital transformation. Three quarters (75 per cent) of SMEs say that temporary staff have become increasingly important to managing digital transformation efforts, with 73 per cent acknowledging that they are using interim employees to upskill permanent members of staff.
“Change is the only constant for UK SMEs in the current business climate,” said Matt Weston, managing director of Robert Half UK. “The skills required to thrive in today’s economy are completely different to those required five or 10 years ago, and as a result, the nation’s SMEs are struggling with a skills gap.
“Temporary or contract staff are a vital asset for SMEs looking to navigate their way through digital transformation,” he added. “Interim staff will apply their expertise to short-term projects, but their experience can also be harnessed to upskill permanent members of staff with new technical skills.
Weston went on to say that the cost of today’s skills gap will increase every year until something significant is done about the issue, so it’s important that companies act quickly to avoid the damage it could inflict on balance sheets. “The solution is to invest in a blend of training and development initiatives alongside a flexible hiring strategy,” he concludes. “Demand for the best professionals with the most relevant skills will continue to grow in the year ahead – and acting quickly to secure chosen candidates must be high on businesses’ agendas, as should initiatives to promote staff retention.”