A Hire Calling: Research finds talent shortage is big concern for small businesses

81% of small businesses in England have major recruitment concerns according to new research. Does upskilling hold the answer?

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Employers are still struggling to plug gaps in their workforce caused by the post-COVID ‘great resignation’, a new survey has found.

The Gatsby Foundation asked 502 small firms in England what their biggest concerns were. The results show that being able to recruit staff with the right knowledge and skills for their needs is the second-biggest issue facing small businesses (43%) after rising costs (51%).

High-profile staffing shortages have plagued headlines for a number of months after the country officially waved goodbye to coronavirus restrictions at the end of February.

Hospitality and travel have been two of the most talked-about victims. Earlier this week, Heathrow airport announced it will restrict passenger limits to 100,000 per day after months of chaos caused by a shortage of ground staff.

Below, we explore the research further and explain how online training courses hold the answer for firms struggling to find appropriate talent.

Talent doesn’t grow on trees

Companies have been dealing with a talent shortage since the COVID-19 lockdown first started, when many simply couldn’t cope with the economic disruption caused by the national lockdown.

But cash-strapped organisations which shed their staffing are now hiring again. This competitive job market is worsened by workers reevaluating their careers and resigning in droves – dubbed ‘the great resignation’ by media outlets.

June 2022 figures from the ONS job vacancy report now show that the number of job vacancies in March to May 2022 rose to a new record of 1,300,000; an increase of 503,900 from the pre-coronavirus (COVID-19) pandemic level in January to March 2020.

In fact, according to a study by The Caterer, 82% of hospitality and tourism businesses believe that it is currently harder to recruit suitable staff than at any time in the past.

Gatsby’s research seems to reinforce this belief. Of the businesses surveyed, more than half (55%) cite a lack of skilled candidates as a top concern.

How can I attract talent more effectively?

Our full guide to how to recruit in a hiring crisis has more helpful advice for keeping hiring managers afloat in a shrinking candidate pool.

However, the research also reveals a potential blind spot for employers facing difficulties retaining staff and boosting productivity.

Just 38% of the small businesses surveyed said their employees undertook training in the last year – meaning many businesses could be losing out on nurturing talent, as well as attracting new staff.

Bridging the digital divide

One of the biggest reasons for the lack of investment in learning and development has been the shift to remote working.

With more people splitting their time between the office and home, it is harder for employers to oversee structured training programmes.

This is backed up by LinkedIn research, more than two-thirds of those aged 16-34 believe the pandemic has impacted their professional learning. Many report being out of practice when it comes to communicating with clients or delivering presentations.

We highlighted this as one of the downsides of a WFH policy in our guide to the pros and cons of going remote.

Virtual learning has become a popular route into upskilling for businesses with hybrid or home-working policies.

But according to Gatsby, one in five (18%) are currently uncertain about how to engage with the education and skills landscape.

This is backed up by recent research from the Data and Marketing Association (DMA) 70% of employees currently upskill – defined as engaging in employee development – for less than an hour a week.

Jenifer Burden MBE, Director of Programmes at Gatsby, said: “Small businesses are the backbone of our economy and society, but there’s no doubt they’re facing a tough year ahead.

“As our research shows, one of their major challenges is getting to grips with the education and skills landscape, which has changed and can be complex to understand. But the good news is businesses can benefit in a number of ways.”

The future of workplace training

If you’re a small business owner, you’re probably now thinking about that expensive-looking online workshop on LinkedIn that costs a bomb and doesn’t promise much.

Luckily, there are several steps you can take to be certain that virtual learning doesn’t impact the development of your employees – or your budget.

Design your own online training activities 

Small skill barriers, like not being familiar with a certain software, can be a big influence on your hiring decisions but they can actually be easily fixed without hefty funding.

Create a list of your top training priorities and then build your online courses around it. For example, if your new employee doesn’t know how to use a crucial software product, create a 5-minute online training module that highlights each step.

Keep activities bite-sized to encourage involvement

As we flagged in our guide on how to design a hybrid work policy, monitoring employee performance is complicated if your team is working remotely on certain days.

Bite-size activities and modules are ideal if you want to make sure that employees are definitely completing the training tasks they are set.

Make sure they are multi-platform friendly. Employees may not have time to sit down at the computer to access your online training materials, and may prefer to complete them on tablet or mobile.

Offer flexible training programmes via cloud-based software

If your staff are working from home, they are able to enjoy more flexible hours and have more say in when they choose to work. Learning and development programmes can come into conflict here as being very rigid and appointment-led. 

Ensure your staff can fit online training into their schedule by using a cloud-based storage system with informative resources and activities they can pick and choose from, at any time.

Keep communication channels open and informal

Upskilling isn’t just about starting a lengthy training course. Many employees, particularly those who are new or inexperienced, struggle to confidently ask their managers or superiors questions about workload. As a result, they miss out on priceless learning opportunities.

Casual messaging apps like Slack or Microsoft Teams get rid of the awkwardness of emails and make it easier for staff to fire a quick question or ask for instant feedback.

Has your business been affected by the hiring crisis? Contact us at hello@startups.co.uk to give us your thoughts on Gatsby’s research and virtual upskilling.

Helena Young
Helena Young Senior Writer

Helena "Len" Young is from Yorkshire and joined Startups in 2021 from a background in B2B communications. She has also previously written for a popular fintech startup.

Included in her topics of interest and expertise are tax legislation, the levelling up agenda, and organisational software including CRM and project management systems. As well as this, she is a big fan of the films of Peter Jackson.

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