UK SMEs are setting their sights on plugging the skills gap as they ramp up investment in hiring and upskilling talent according to the latest SME Confidence Tracker from specialist recruitment finance provider, Bibby Financial Services (BFS).
More than a third of SMEs (37%) are planning to upskill existing staff, while over a quarter (28%) are targeting new talent to boost their businesses between January and April.
Investment in existing staff training and development is particularly high among SMEs in the construction sector (51%), an industry that continues to struggle to combat a skills shortage. Construction SMEs are also looking to hire new talent, with over a third (35%) looking to recruit, followed by the services (32%) and transport (28%) sectors.
Investment in both new and existing staff has increased steadily since Q2 2017.
Commenting on the findings, Susan Farmer, Head of Recruitment Finance, Bibby Financial Services said: “While the first quarter of the year is traditionally a busy period for recruitment, UK SMEs are planning to make a significant investment to upskill existing workforces and recruit new talent in the first few months of the year.
“From discussions with the recruitment businesses we work with, it is clear that many SMEs are looking to plug the widening skills gap inflated by Brexit uncertainty.
“With unemployment at a four-decade low of 4.3%, the UK simply does not have enough workers to fill these gaps, particularly in sectors such as construction where the problem is acute.
The latest investment figures come as confidence amongst SMEs edged-up in Q4, with 37 per cent reporting sales growth during the quarter, up from a third (33%) in Q3 2017.
Despite a slight boost in confidence, SMEs remain cautious, with over a quarter (26%) of businesses holding back on investing due to the uncertain economic environment in the UK. A quarter (25%) of SMEs are also holding off on investing as they focus on building up cash reserves, while over a fifth (21%) are holding back due to uncertainty caused by Brexit.
Susan added: “While confidence among businesses remains low, SME owners are now starting to think about investing for the future again.
“While it is positive to see businesses investing in skills and recruitment, it remains to be seen how future Brexit negotiations will impact the UK’s access to labour pools in the future.
“It is therefore vital that recruitment businesses and SMEs in all sectors have sufficient cashflow and working capital to enable them to train and hire skilled staff when opportunities arise.”
Sue Farmer is Head of Recruitment Finance at Bibby Financial Services.