Education failing to prepare young people for work, say SME owners

Three in four (75%) SME owners say the UK education system does not do enough to prepare young people for employment, according to new research by small business lender Iwoca.

Over half (54%) of SME owners say the sector does not currently have the right skills it needs to succeed and of those, 48% say that the skills shortages have been ongoing for at least 12 months.

More than two in five (42%) say SME owners themselves are having to work longer hours to plug talent gaps – and delays to growth plans (31%) and hiring temporary workers (25%) were cited as the next biggest impacts of skills gaps felt by the SME community.

So, what is the answer? Over three quarters (76%) say apprenticeships are key, while almost three quarters (72%) of respondents believe the government should introduce more support for SMEs to help employees upskill. 

Widening immigration rules to solve the lack of required talent saw support from just over two-fifths of small business owners.

When it comes to hiring, experience in the sector and in the same role were ranked the most important at 32.5% and 28.3% respectively. Interestingly, academic qualifications were deemed least essential, with just 4.2% of respondents saying it was the first thing they looked for on a CV.

“Skills shortages have hit SMEs hard in recent years and they have yet to recover,” says Seema Desai, chief operating officer at Iwoca. “Small business owners are rightly looking for alternatives to plug these gaps and believe strongly in apprenticeships, educational reform and tailored government support schemes to try and fix these issues. 

“We must ensure that the young talent coming through today have the skills needed not only to help businesses grow, but perhaps become SME owners of the future.” 

Learning on the go

What else could be causing the skills gap? In August, a survey of 309 HR managers revealed that 43% of HR managers think their company will face a skills gap because of AI – and 29% noted the ongoing shortage of skilled workers poses a high or very high risk for their business.

Elsewhere, research by IONOS and YouGov earlier this year found that 79% of SME owners in the UK consider the adoption of new technologies to be critical for future growth – but their ambitions have stalled due to a lack of job-ready digital talent. 

82% of job descriptions in the UK list digital or technology skills as a requirement, but over a quarter (27%) of UK workers say that they lack the sufficient digital skills required for their job role – and more than half of workers (58%) say their employer has never given them any sort of training to help close the technology skills gap.

This data shows the important role of education at every stage of a person’s development – from school to the workplace – in order to meet the ever-changing demands of work and real-life, too.

Relevant content:

• Artificial Intelligence is creating a skills gap: here’s what HR teams can do
• Hiring on fire: a six-step guide to excellent recruiting for startups

Kirstie Pickering - business journalist

Kirstie is a freelance journalist writing in the tech, startup and business spaces for publications including Sifted, TNW, UKTN, The Business Magazine and Maddyness UK. She also works closely with agencies such as CEW Communications to develop content for their startup and scaleup clients.