FSB: Small firms struggling to find skilled staff as unemployment set to rise again

New figures published into entrepreneurship as All Party Small Business Group launches an inquiry into the subject

The Federation of Small Businesses (FSB) and All Party Parliamentary Small Business Group (APPSBG) are launching an inquiry into entrepreneurship today, as new figures show that almost a third of small businesses at start-up stage have difficulty finding suitably skilled staff, ahead of employment statistics next week which are set to show another rise in unemployment.

New statistics into the barriers small businesses face when starting-up show that 27 per cent of small businesses found it difficult to find suitably skilled staff. With unemployment at 2.62 million and youth unemployment more than a million and set to rise next week, this is a worrying figure.

Respondents to the FSB ‘Voice of Small Business’ Survey Panel also said that they found regulation requirements onerous (47%) and had difficulty securing finance (34%) at start-up.

These figures come as the FSB and APPSBG are launching an inquiry with Iain Duncan Smith, Secretary of State for Work and Pensions, into entrepreneurship to see how these barriers can be removed. With 95 per cent of private sector businesses employing less than 20 members of staff, the inquiry will look at how these firms can be encouraged to take on staff and how budding entrepreneurs can be supported in setting up their own business against a backdrop of uncertain economic times.

The Government has introduced a raft of new measures aimed at supporting entrepreneurs, however, the FSB’s ‘Voice of Small Business’ Index shows that employment intentions and business confidence has dropped. For small businesses looking to grow, there are still fundamental problems with hiring skilled staff, regulations and access to finance.

The FSB is calling on the Government to:

· Reinstate the graduate internship scheme to give graduates the opportunity to acquire the skills they need for starting and running a business

· Prioritise enterprise education by putting it in the statutory curriculum

· Take on the Independent Commission on Banking’s recommendations to create more competition in the banking sector

· Extending Work Trials to the first day someone signs on to Jobseekers Allowance to help create 46,000 more jobs

· Reduce the flow of regulation and tackle the stock of existing regulations

John Walker, National Chairman, Federation of Small Businesses, said:

“Challenges posed to entrepreneurs will always vary, but we know from our members that common issues at start-up stage include, finding suitably skilled staff, complex regulation and access to finance. And coming up against these at the very beginning of their entrepreneurial career can prevent them from growing. With the private sector being relied on to drive economic recovery, these barriers need to be removed – budding entrepreneurs should be supported in setting-up in business, and existing businesses should be encouraged to innovate, take on staff and grow. This inquiry into entrepreneurship will cover a raft of issues and working with the Government, we hope that these issues can be put to bed once and for all.”

Brian Binley MP, Chairman of the Small Business APPG, said:

“We hear from small businesses time-and-time again that they are finding it difficult to get staff with the skills necessary to run their businesses. Small and medium sized businesses and entrepreneurs are expected to be driving economic growth in support of Britain’s recovery but they are finding it difficult to get the right people to help them in that task. I am hopeful that this inquiry will go some way to addressing the challenges of rising youth unemployment and the skills crisis we have thanks to the legacy left by the previous government.

“I know that John Hayes, the Skills Minister, is working hard to bridge the skills gap which is especially important to the precision engineering companies in my own constituency of Northampton. However, John Hayes’s work is being hampered by the poor performance in our primary and secondary schools, especially with regard to literacy and numeracy and whilst Michael Gove, the Education Secretary, is pulling out all the stops there is still a lot to do. Our review will be looking at ways of improving those basic skills as well as the more advanced skills required to meet industry’s needs.”


Notes to Editors

The FSB is the UK's leading business organisation with more than 200,000 members. It exists to protect and promote the interests of the self-employed, and all those who run their own business. More information is available at www.fsb.org.uk

The Entrepreneurship Inquiry – December 2011 – March 2012. This inquiry by the All Party Parliamentary Small Business Group (APPSBG) will consider the role of entrepreneurs in driving economic growth. It will consider entrepreneurs who already have their own business and budding entrepreneurs looking to set up on their own. It will examine the support available to them and also the barriers they face.

3. The FSB surveyed members of the ‘Voice of Small Business’ survey panel between 11 and 21 October and received 1,537 responses. To find out more, visit www.fsb.org.uk/fsb-survey-panel


4. To find out more about the FSB’s Real-Life Entrepreneurship campaign, visit www.fsb.org.uk/campaigns


Andrew Cave, Chief Spokesperson: 07917 628991
Prue Watson: 020 7592 8121 / 07825 125 695 prue.watson@fsb.org.uk
Sara Lee: 020 7592 8113/ 07595 067068 sara.lee@fsb.org.uk

For regional FSB contacts please go to www.fsb.org.uk/regions