Lack of suitable skills causes 520,000 job vacancies, hits the economy by £18billion

The lack of suitable skills among candidates is leaving SMEs unable to fill up to 520,000 newly available positions, leading to a deficit of around £18billion to the UK economy, recent research was able to reveal.

The survey carried out by digital lender for small businesses Everline and the Centre for Economic and Business Research (Cebr) found that small and medium enterprises (SMEs) spend on average over 100 hours a year looking for suitable candidates, training new members of staff and developing and supporting their existing staff.

The organizations argue that this figure represents time that could be spent further developing the business if suitably skilled staff were readily available, and equates to £3,160 of their time in economic terms (Gross Value Added). This figure rises to £7,540 for 18-34 year olds and falls to £1,860 for respondents aged 55 and over.

The small business employment index (based on changes in headcount and the number of vacancies in a company) was found to be at its highest since 2004 and just under a quarter (24%) of small businesses surveyed had available vacancies today.

On the other hand, a further 16% were unable to fill a role in the last month due to unskilled candidates. In addition, only 17% said that the staff in their business are fully trained in every area of their job role and only 47% are comfortable relying on less senior members of staff to take on more senior roles in the business if necessary.

The small business employment index also found that small firms are planning to increase their hiring over the next quarter and into 2015, therefore highlighting the need for the skills shortage to be addressed to meet the rise in vacancies.

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