Priorities: Skill Shortages

Skill Shortages

One research has estimated that small businesses represented 98 % of the overall industrial activity in Britain (DTI, 1996). In terms of employment, thesmall business sector accounts for almost 70% of the totallabour force (Storey, 1994; Strnworth and Gray, 1991). The GDP contribution of smaller firmsisestimated at 40% a large proportion of which is attributable to micro businesses that employ fewerthan 10 individuals (Matlay, 1996). Business firms proved to be in need of a wide base of training and support. In the context of the ongoing training debate, the lack of vocational education and training VET is reported to confirm the argument that endemic skills shortages resulted in loss of competitiveness at firm level in Britain. The impact of existing training initiatives available to firms, particularly to SMEs who need them most, have to be evaluated for furtherance of need assessments.

One study on six recent training initiatives incorporating small business training components found that owner/managers of SMEs with fewer than 10 employees are not aware of the existence of Industry Training Orgs (ITOs) and fewer still admitted to be interested in this type of training and support. The data points towards an inflexible approach as well as a mismatch between the specific training and support needs of smaller firms and the services on offer through ITOs. The study showed the uptake of Investors in People amongst the smaller businesses in the research sample was very low informing the fact of disinterest of managers of microbusinesses in LiP programmes. Only 1.02% of them claimed to have been successful in completing the accreditation process while 12.24% of medium-sized orgs claimed the completion.

In the case of Business Links the exclusion from their target of organizations with fewer than 10 employees blocked the access of microbusinesses to these training outlets while 25% of respondents in medium sized orgs have used BL facilities as part of their training strategies. Training and Local Enterprise Councils TLECs appear to have been more successful in providing the type of training and support that smaller firms seem to require where 14% of small firms and 6% of micro-businesses responded to have used the services. This figure for medium sized businsses, usage rate has increased to 40%. The TLECs training initiatives have been replaced by TECs/LECs which needs further study.

For National/Scottish Vocational qualifications also show meagre success to make a significant impact on the training strategies of smaller firm. Even in medium sized businesses actual usage reached 10%. The reason was blamed for the cost, length of time and the low rates of implementation involved in adopting the competence based framework of vocational qualifications. However Modern Apprenticeships and Accelerated Modern Apprenticeships had a higher impact upon training in the SME sector. The results appear to indicte that MAs and AMAs were much better suited to the specific training needs and HRD strategies of smaller businesses.

A number of common trends were identified pointed to relative high awareness and understanding of government sponsored initiatives but low interest and actual usage rates. None of these initiatives appear to have made a significant impact upon either the skill levels or the competitiveness of smaller firms. Nevertheless those initiatives that incorporated specific small business remits (i.e. TECs/LECs and MA/AMAs) proved to be more successful in the SME sector than the more general training and support schemes available in recent years. It is therefore for policy makers to consider to focus exclusively upon the specific needs of small business owner/mangers and their workforce who are much in need of raising the skill levels of their workforce to improve competitiveness in this important sector of the British economy.

Source:

Dept of Trade and Industry Report, 1996
Martin and Matlay, The Role and Scope of Small Businesses in Britain, 2001