Small tech firms held back by recruitment failure

Posted on 12 Jun 2012

Is the KTP model for feeding STEM-skilled people failing small businesses?

A depressed economy is not holding back Nick Pascoe’s company.

The award-winning power technology company has a range of carbon reducing products for the automotive sector and a strong order book. And in December 2011 it spun-out a division to a French buyer for several million pounds. This is a mature, market ready technology with great growth potential.

But CPT cannot expand because it needs multi-skilled staff.

Controlled Power Technologies' growth is at risk from a poor talent pool
Controlled Power Technologies' growth is at risk from a poor talent pool

To grow, Mr Pascoe needs staff with multi-disciplined engineering skills. His “ideal candidate” would have qualifications and experience in mechanical, electronic and hybrid power engineering, young enough to afford yet business-savvy. A realist, he acknowledges that such candidates – who are willing to join a small company – are very rare. Most of the few candidates he finds are foreign nationals – not a problem, says Mr Pascoe, speaking at the SMMT International Automotive Summit on June 12.

Except that work permits for non-EU post-graduate students have now fallen to less than a year, from two years. “It’s immensely frustrating,” he says. “We should be encouraging these qualified people to stay, to help firms like ours to grow, but we have made it so difficult for them. What advert for an open, globally integrated country is that when they prematurely return home to India or Taiwan?”

But that’s not all. To try to future-proof the business, Pascoe applied for a Knowledge Transfer Partnership. The scheme helps STEM-subject students with funding for their studies by securing sponsorship from the private sector. CPT applied to the University of Sheffield, the UK’s academic hub for hybrid transmission engineering. The first approval round liked the company but said it needed the two-year sponsorship up front, a sum of £25,000. Fine, said CPT, and stood by to write the cheque.

But the second approval round failed the application. The reason: the business was too small and it could not show sufficient long term sustainability to meet the KTP award’s criteria. The sale of its electric supercharger division to French firm Valeo in December netted CPT Eu30 million – and since then, Valeo has sent a team of engineers to CPT to bolster its team. And the university wanted to do the KTP. But despite this a “faceless arbiter” ruled it out.

“We hear a lot about growth needing to come from the SME base, where over 95% of private sector GDP is held, but the skills delivery system is not set up for high growth, go-get companies like ours who just happen to be small,” says Mr Pascoe.

Long term, he says, the fear is that France could take advantage of the UK’s inability to provide a skilled labour pipeline. Valeo’s staff, trained at CPT in the UK, could conceivably set up their own hybrid transmission business in a few years time. Why would they need a UK company which cannot staff itself, but which can train their people?

Will Stirling