The productivity of mid-sized businesses in the South East is being dragged down by a lack of key skills, according to new data from business and financial adviser Grant Thornton UK LLP.
The firm’s latest Business Outlook Tracker found that four in five business leaders (83%) believe that a lack of vital skills is affecting productivity levels.
Digital skills were identified as the most in need (34%), followed closely by data, entrepreneurial, recruitment and emotional skills (tied at 25%).
The survey of mid-sized regional businesses revealed that 74% 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 73% of those noting they were lacking digital skills and having in-house coaching to boost this. Almost two thirds (64%) of those lacking data skills also have training in place.
The high-tech nature of many businesses’ productivity concerns is reflected by the fact that 70% 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 23% believing that AI won’t have a positive impact on their productivity over the next year.
Alongside skills shortages, other important factors impacting the productivity levels of South East businesses include inefficient business processes or operations (40%), increasing levels of stress and burnout amongst staff (36%) and regulatory and legal barriers (26%).
Further devolution and greater investment in skills and training were identified as the policy areas that business leaders in the South East would most like to see the government focus on longer term. Investment in the provision of skills training was also highlighted as the most important way to boost regional economic productivity.
With an election called for 4 July, the majority of South East businesses (71%) 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.
Martin Verrall, practice leader for Grant Thornton UK LLP in the South East, said: “It’s clear that there’s a strong demand for further investment in skills development in the South East, with business leaders recording a need for better digital and data skills to help boost productivity.
“This lack of necessary skills development, combined with inefficient business processes or operations, 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 and contributing to the increasing levels of staff burnout being seen in the region.
“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.”
