The Federation of Small Businesses warned of a growing skills gap as small firms’ confidence hits an all-time high.
The recently published FSB Small Business Index has shown a growing skills shortage in the workplace, which has been identified by small firms as a significant barrier to growth, with almost one-third of those surveyed saying skills shortages were already hampering growth.
The FSB said small companies can overcome the shortage by taking action now.
John Allan, national chairman at the Federation of Small Businesses, said the business and education community must work more closely together to ensure young people are work-ready and understand the demands of the world of work.
He added: “Employability skills must be embedded from an early age; the labour market has changed dramatically in recent years and businesses are adapting to that change, but the education system needs to catch up.
“Reforms must be completed to create a business-led, high-quality apprenticeship system that provides a real choice between vocational and academic routes.
“This should be for the long term, and the aspiration should be to match the standards of our leading competitors, such as Germany.”
More vocational training is needed. Mr Allan said that traineeships must be used as a credible alternative to a formal apprenticeship.
“Initiatives such as the TechBac, 14-19 college programmes and the rejuvenation of University Technical Colleges serve to demonstrate that a vocational education is no longer considered to be the second tier of the UK education system.”
Despite the challenges around skills, the survey of almost 2,500 businesses showed confidence at a record high, with year-on-year gains seen across the whole of the UK. These were again led by London and the South East.
One small financial advice firm to have taken the initiative is Niche Chartered Financial Planners in Pontypridd, Wales.
The company has its own graduate-style training scheme, although entrants do not necessarily need to have a degree as they are all required to do the same training.
The scheme was the idea of Ray Adams, himself a chartered financial planner.
All trainees are required to go through the same process, which includes back-office admin. Once they have started taking, and passing, exams, the trainee’s salary starts to increase.
Mr Adams believes training youngsters is a priority for the industry and that many advice firms are taking a short-sighted approach. The average financial adviser is in his late 50s and looking at counting time till he retires. It’s up to relatively younger financial advisers and planners like myself, at 49, to make sure this industry has an intake of young dynamic people.
“People who have no preconceptions and who are technology-literate and whose first choice of career, not their default career, is about offering advice to people who need it. How will we get younger clients, without having younger people to advise them.”.
