Finding skilled staff has been ranked as the biggest growth obstacle for small and medium-sized enterprises (SMEs), according to new research.
A report by UK venture capital investor Albion Ventures has revealed that as half of small business plan to expand their headcount over the next two years, the biggest challenge they are facing is access to skilled staff.
This is the first time SMEs have identified a shortage of skilled staff as the biggest obstacle to growth – up from third place in 2015. This was ahead of red tape and regulation, which were ranked second and third respectively.
Political uncertainty and leaving the EU were ranked fourth and sixth, which Albion Ventures claimed indicated that small firms are more concerned with tangible obstacles to growth, rather than those they have less control over.
Based on sectors, small businesses in the manufacturing industry reported the highest level of concern, followed by those in the technology and telecoms sector and construction businesses in third.
SMEs identified that the biggest skills gap area was marketing (26%). This was followed by technology (21%) and business planning (17%).
The smallest skills gap area was financial management, with only 9% of business owners reporting issues.
On a regional basis, the East Midlands felt the most underpowered in marketing with a third (32%) lacking expertise, followed by the West Midlands and the South West both at 30%.
The technology skills gap was the largest in Scotland (34%), followed by London (25%). While a quarter (26%) of small businesses in the North East felt they lacked expertise in HR.
Patrick Reeve, managing partner at Albion Ventures, said: “A shortage of skilled staff shows that the growth pressures on the economy are at the most sophisticated end of the scale, which is precisely where we can expect to generate the biggest returns. The economy is coming under capacity constraints at a time of considerable political uncertainty.
“Policymakers charged with deciding our post-Brexit future must recognise that many of the skills that enable us to compete in a fast-changing and increasingly competitive world are in short supply and our best chance of overcoming this challenge is by building on the UK’s first class reputation as a home for global talent.”