Apprentices could be answer to skills gap, says report

The skills shortage in the UK is becoming an increasingly acute problem in many industries, but apprentices could provide the answer, according to new research.

The study by Close Brothers has found nearly a third of SMEs (31 per cent) feel their workforce does not have the skills their business needs.

Additionally, well over half (55 per cent) do not believe they will be able to find suitable recruits to address this, due to a skills shortage in either their industry (43 per cent) or region (12 per cent) .

Apprenticeships could bridge gaps

One way of investing in new talent and working to close the skills gap is through apprenticeships, but the Close Brothers Business Barometer found only one in 20 (5 per cent) of companies planning to take on new staff in the next year will look for an apprentice.

Worryingly, the survey of 900 SMEs also found three quarters (75 per cent) do not have an apprentice programme in place and over half (52 per cent) don’t plan to start one. Of those SMEs that wanted to hire an apprentice, the biggest reason for not doing so was: cost (49 per cent), red tape (19 per cent ) or lack of time needed for training (14 per cent).

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. The strong pound continues to affect exports , while speculation around rate rises is causing uncertainty around borrowing .

With the Bank of England’s decision to keep interest rates at 0.5 per cent for the 80th month in a row, speculation continued on when exactly the rise will come.

Alongside this, the hope of a radical overhaul of business rates was dampened by speculation that it may be slipping down the government’s agenda . All of which recent reports say are negatively impacting SME growth and thus their ability to spend on hiring.

Multiple obstacles

Stephen Hodges, CEO, Close Brothers Banking Division commented: “Despite a clear need for more skilled workers, hiring apprentices to fill this gap simply isn’t possible for the majority of SMEs.

“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. The recent moves by the government, including the apprenticeship levy, to grow the number and quality of apprenticeships are very welcome.

“Big business has a crucial role to play in bridging the skills gap and hiring young people through apprenticeships but, we know from this research and our own experience, SMEs need more support if they are to do the same.”