TWO thirds of small and medium sized businesses in the South West are suffering a 'skills gap' which could dent their future profits, according to a new report.
The study from Lloyds TSB Commercial Banking found that while most businesses say they want to address the perceived lack of skills among their workers, many do not have the time or budget to do so.
The report shows 66 per cent of South West SMEs believed there is a shortage of skills among their workforce – this compares with 61 per cent of firms nationally.
More than a quarter feel there are gaps in sales and marketing skills; nearly one in five believe IT know-how is an issue; more than one in six mention team-building skills as an area that could improve, and a similar number cite management and leadership skills as a key area of development.
Paul Spencer, regional director for Lloyds TSB Commercial Banking in the South West, said: "If businesses are to seize opportunities for future growth and profitability, investment in skills needs to be at the top of their to do list.
"While there are some businesses that claim they have the skills they need for the future, most do recognise a need to develop skills across their workforce and can pinpoint the key areas in need of improvement. Given the recent economic headwinds that South West businesses have had to endure it is understandable why some have not been able to make skills development a priority, but if they are to reach future potential growth they'd be wise to consider doing so now."
Reasons for not developing skills are varied. Nearly two fifths of businesses cited budget constraints, while nearly a third blamed time pressures. A fifth said they had difficulty in finding the right training provider.
An overwhelming 96 per cent of SMEs that have identified a skills gap in their workforce believe it has a detrimental impact on their business. Their main worries are that a lack of skills will damage future growth potential, inhibit their competitive edge, harm staff morale and make them less profitable.
The report reveals that across the South West, nearly a third of SMEs spend at least £500 or more a year per employee on skills development; one in six spend £500 to £1000; and one in seven spend £1,000 to £5,000 per year.