SMEs face major skills shortage but unable to hire apprentices

Posted on 18 Nov 2015 by Jonny Williamson

Nearly half of British manufacturing SMEs (48%) feel their workforce does not have the skills their business needs, according to new research from Close Brothers.

With the skills shortage in the UK becoming an increasingly acute problem in many industries, nearly half (45%) of manufacturing SMEs do not believe they will be able to find suitable recruits to address this, due to a skills shortage in either their industry (43%) or region (3%).

Research has shown that the UK’s industrial growth is being jeopardised by a shortage of skilled people. One way of investing in new talent and working to close the skills gap is through apprenticeships, however the Close Brothers Business Barometer found only one in 20 (5%) manufacturing SMEs due to take on new staff in the next year will look for an apprentice.

Of those manufacturers that wanted to hire an apprentice, the biggest reason for not doing so were:

  • cost (47%)
  • red tape (20%)
  • lack of time needed for training (16%)

Worryingly, the survey also found that more than half (56%) of the almost 900 manufacturing SMEs polled do not have an apprentice programme in place and almost a quarter (24%) don’t plan to start one.

According to recent reports, SME bottom lines are also being squeezed by a number of macro-economic issues, further affecting their ability to hire apprentices, including the strong pound continuing to affect exports and speculation around rate rises causing uncertainty around borrowing.

CEO, Close Brothers Banking Division, Stephen Hodges commented: “Our data shows a worrying trend among SMEs…despite a clear need for more skilled workers, hiring apprentices to address this simply isn’t possible for the majority of manufacturing companies.

“Through the thousands of SMEs we work with across the UK, we see the issues of cost, red tape and a lack of time affecting their ability to hire the entry level candidates they need.

“Our SME Apprentice Programme is designed to tackle these issues. It’s our hope that this programme can be used as a model across different sectors to provide other SMEs with the support they need in order to achieve their ambitions.”

The Close Brothers SME Apprentice Programme is part of the company’s long established commitment to supporting small and medium-sized enterprises.

Supported by the University of Sheffield AMRC Training Centre, the programme will help SMEs recruit and train a new generation of advanced engineering workers.

The scheme helps pay for 20 apprentices in the Sheffield area to learn new skills at the AMRC Training Centre.

Close Brothers funds half of the new recruits’ wages during the first year and a quarter in the second, meaning participating SME manufacturers won’t have to bear the full cost of employing the apprentices, until they are actively contributing to the bottom line.