UK SMEs face £145K skills gap in ongoing war for talent.

Specialist skills remain target.

Research from Robert Half UK suggests 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. The skills gap – the difference in skills required within an organisation and the actual skills possessed by an organisation’s workforce – is one of the most pressing issues facing UK businesses today.

According to Robert Half, this gap has widened as a result of macro challenges, including a shrinking talent pool due to Brexit, increased digitalisation and economic influences, and it is impacting the nation’s productivity, which is now the lowest among the G7, in addition to stifling innovation and preventing SMEs from entering new markets. The skills needed to help close the gap include data analysis and digital skills, as well as softer skills such as resilience, adaptability to change and critical thinking.

The study, commissioned to launch Robert Half’s 2020 Salary Guide, revealed that SMEs are concerned about the potential impact of macroeconomic events on the skills gap in their organisations. Three in five (59 per cent) said that a recession would negatively impact the skills gap in their business, followed by Brexit (47 per cent). However, a quarter of SMEs (26 per cent) said Brexit would have no impact on their skills gap at all, while nearly half (47 per cent) said the same about a General Election before 2020.


Figure 1: Impact of macroeconomic events on average SME’s skills gap

Negative Impact Positive Impact No Impact
Recession 59 per cent 16 per cent 18 per cent
Brexit 47 per cent 20 per cent 26 per cent
General Election pre-2020 15 per cent 26 per cent 47 per cent
IR35 15 per cent 18 per cent 41 per cent
Digitalisation / Industry 4.0 12 per cent 44 per cent 32 per cent


However, the nation’s business leaders are taking measures to reduce the skills gap in their workforce. Nearly two thirds (63 per cent) intend to train and upskill existing staff to address it, followed by hiring permanent staff (42 per cent) and hiring temporary staff (27 per cent). According to the 2020 Salary Guide, the majority (94 per cent) of CFOs believe they need to develop the resilience of their teams to ensure employees continue to thrive during the current geo-political climate.

The combination of constant change and the skills shortage has also led SMEs to explore benefits of a flexible recruitment model. Seven in 10 (70 per cent) business leaders believe that change can be successfully managed using a blend of permanent, interim and temporary employees, while three quarters (74 per cent) intend to use experienced temporary workers to upskill existing teams.

“The nation is gripped by the current skills shortage – an issue compounded by increased digitalisation, tightening visa controls and Brexit, and one that threatens the ability of our nation’s SMEs to compete on the global stage,” commented Matt Weston, managing director of Robert Half UK. “The desired skills remain specialist which means those who possess them are in demand. The resulting war for talent could cause even more headaches for SMEs.

“Our analysis shows the skills gap can impact the bottom line,” Weston continues. “For SMEs, the priority for the next year should be identifying and filling gaps within their organisation, which is why we have put together our Salary Guide to support businesses in closing the gap in 2020. Training and development initiatives, with a focus on upskilling existing staff are the obvious starting point. At a time when change is the only constant, adaptability and resilience will be the key soft skills to develop.”

The key to success in the current climate, argues Weston is to act quickly to secure top talent and adopt a flexible hiring strategy. He believes the solution to the war for talent is a blend of permanent, temporary and interim employees.

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