• Swindon & Wiltshire Professional services
• Tuesday June 18 2024
• Author Name: Peter Davison

Skills deficit damaging productivity in South West – Grant Thornton

The productivity of mid-sized businesses in the South West is being dragged down by a lack of key skills, according to new data from business and financial adviser Grant Thornton.

The firm’s latest Business Outlook Tracker found that four in five business leaders (80 per cent) believe that a lack of vital skills is affecting productivity levels.

Leadership skills were identified as the most in need (33 per cent), followed closely by complex practical capabilities including technical, digital and operational skills (all tied at 27 per cent).

The survey of mid-sized regional businesses revealed that 70 per cent were planning to invest more or the same in skills development over the next six months.

Many have already established their own development programmes, with 92 per cent of those noting they were lacking digital skills having in-house coaching in place to boost this.

Over four in five (83 per cent) of those lacking technical skills also have training in place.

The high-tech nature of many businesses’ productivity concerns is reflected by the fact that 79 per cent will be investing more or the same in technology over the next six months.

The growth of Artificial Intelligence has likely been a key aspect of this, with only 18 per cent believing that AI won’t have a positive impact on their productivity over the next year.

The survey finds that productivity issues are currently affecting almost every aspect of mid-sized businesses, including the ability of South West companies to export and grow.

Alongside skills shortages, other important factors impacting the productivity levels of South West businesses include the inability to plan long-term due to economic and political uncertainty (38 per cent), inefficient business processes or operations (30 per cent), and a lack of staff engagement or low morale (27 per cent).

Further devolution was identified as the policy area that business leaders in the South West would most like to see the government focus on longer-term and as the most important way to boost regional economic productivity.

With an election called for 4 July, the majority of South West businesses (79 per cent) claimed to have confidence that the next UK government (of any party) will focus on prioritising long-term solutions to address the nation’s productivity issues.

Lauren Carlyle, practice leader for Grant Thornton UK LLP in the South West, said: “It’s clear that there’s a strong demand for further investment in skills development in the South West, with business leaders recording a need for better leadership, technical, digital, and operational skills to help boost productivity.

“This lack of necessary skills development, combined with the low staff engagement levels businesses are seeing in the region, is likely creating a snowball effect, stretching current people resources and ultimately contributing to heavy workloads and inefficiency – further exacerbating the productivity challenges facing the market.

“Ahead of the election, the major parties have outlined that they are focusing on enhancing the skills and training opportunities available to the country’s workforce.

“It’s crucial then that the parties listen to what mid-sized businesses, the engine of the UK economy, are saying they need and put forward solutions to address the constraints currently hindering the growth and productivity of a core segment of our economy.”

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