Almost a third of small businesses say that skills shortages are hampering growth, according to the latest Federation of Small Businesses’ (FSB) Small Businesses Index.

The report of 2,500 businesses said that firms in the construction and computer services industries were particularly affected.

John Allan, National Chairman of the FSB, said:

“As the labour market continues to tighten alongside the economic recovery, skills shortages will continue to be an increasing concern for more businesses. While this helps to boost the wage bargaining power of workers with the right skills, it poses a risk to the momentum of economic growth and once again underlines a long standing structural weakness in the UK economy.”

The FSB has made a number of recommendations that they say must be implemented if this problem is to be addressed.

It says that the business and education community must work more closely together to ensure young people are ‘work ready’ and understand the demands of the world of work.

Employability skills must be taught from an early age to reflect the changing nature of the job market and reforms to apprenticeships must be made to guide more young people into vocational careers.

Despite these challenges, the survey also revealed that business confidence among small firms is  at a record high with year-on-year gains seen across the whole of the UK.

Image by Daniel Go