Is there a skills gap in small businesses?

Do small businesses in the UK spend enough time on skills development? From a quick (and very un-scientific) scan of the internet it looks like they don’t. There seems to be an abundance of reports and articles about the poor state of UK productivity with much of the blame laid squarely at the door of weak leadership and low levels of management expertise. A parliamentary report in December 2018 recognised the “long tail” of UK SMEs “not having the requisite skills to implement management best practices” (Publications.parliament.uk, 2019). A more recent article by Rob May of the Association of Business Executives links the high levels of small company failures in the UK in large part, to lack of management training and skills and calls out the low levels of business-owner engagement in adult education in the UK compared with other OECD countries (May, 2019).

I’ve encountered this same skills deficit within small companies on many occasions. In my experience these businesses are mostly run by smart, charismatic and driven individuals who understand their market and product or service inside out. Many (but by no means all) are less proficient when it comes to, for example, leading and motivating teams, strategic planning, managing risk and maintaining customer relationships. I’ve come across bosses in small businesses more disconnected from their employees than any CEO running a company 100 times bigger. Well-managed businesses, and by that I mean those that train and develop their staff and which embrace structured management practices, are quite simply less likely to fail.

Given that we’re not going to see SME bosses heading en masse to sign up for management training programs (although it would be good it few did) then one solution would be to bring in mentors – professional managers with a wide array of leadership and general business skills – to help upskill the business owner and their staff.

With so much evidence about the value, it’s surprising that more SME don’t make use of a mentor. There’s not a lot of current data on the extent of mentoring in this sector so we have to go back to a piece of research conducted by the Department for Business, Innovation and Skills in 2013 that suggests that only 17% of SME owners had ever used a mentor and only 5% had used a mentor in the last 12 months (Galli, 2013). Clearly that proportion may have improved somewhat over the last 6 years but probably not by a significant amount.

Why don’t more small business owners engage a mentor? Time is one factor. Frequently owners are so busy it probably hasn’t crossed their minds. There may be a perception that no one can teach them how to do their job or manage their business better. Some may also disparage formal management structures and learning. There could also be an assumption that bringing in someone from outside (who inside an organization is going to mentor the boss?) will come at a cost which a small business might struggle to meet. Employing a mentor will probably cost less than more traditional L&D (many mentors provide their services pro bono) and could quickly help bridge the skills gap (or at least identify its extent).

Truth is, an hour or two with a mentor on a regular basis can provide important learning opportunities for even the most succesful, visionary and charismatic individuals. Most leaders would benefit from acquiring or refreshing some simple management disciplines and, conversely, some managers could do worse than take a look at their leadership skills.

Sources

Galli, L. (2013). [online] Assets.publishing.service.gov.uk. Available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/263226/demand_for_mentoring_among_SMEs.pdf [Accessed 5 Oct. 2019].

May, R. (2019). Start-ups across the UK are going bust - they need more careful management for our economy to boom. [online] The Telegraph. Available at: https://www.telegraph.co.uk/politics/2019/01/24/start-ups-across-uk-going-bust-need-careful-management-economy/ [Accessed 4 Oct. 2019].

Publications.parliament.uk. (2019). Small businesses and productivity - Business, Energy and Industrial Strategy Committee - House of Commons. [online] Available at: https://publications.parliament.uk/pa/cm201719/cmselect/cmbeis/807/80707.htm#footnote-258 [Accessed 4 Oct. 2019].