Should you double down on skills, not savings?

Should you double-down on skills, not savings, during economic uncertainty?

With a lot of uncertainty in the economy, it is understandable that small businesses in England are looking at ways to trim budgets to avoid passing on price increases to customers and make savings should costs rise above unsustainable levels.

Whilst this is sensible business practice, SMEs shouldn’t just focus on short-term cost cutting measures, but also look for opportunities to adapt, do things differently and prepare for a brighter long-term future.

A 2010 study by Harvard Business School showed that companies that only cut costs during a downturn are less likely to flourish after it ends, whereas those that strike the right balance between cutting costs, and investing in growth are most likely to do well when the economy recovers.?

Reassess your skills and training practices

One area that small businesses should contemplate analysing (to support both short-term cost cutting and long-term growth) is their skills and training practices. Many SMEs and start-ups do not realise the variety of ways they can work with education providers to recruit and develop new staff, or how much provision is funded by government – making training more affordable for both new and existing employees.

Below we outline several skills and development programmes that smaller organisations might not have considered and what the business benefits are in getting involved in these opportunities.

1.??Short courses for existing staff

There is a plethora of government-funded opportunities to upskill or reskill your existing staff around their work commitments. These training programmes usually require staff to learn for 4 or 5 hours a week, for 2-4 months and can provide a short, sharp, boost of knowledge that improves morale, productivity, and business performance.

Skills Bootcamps are a good example of this. These programmes run for up to 16 weeks, and often give employees recognised licences to practice or experience on industry leading software, for example HGV driver licences or Microsoft Azure certification.

If you use Skills Bootcamps to train existing employees, you may be able to access funding for up to 90% of the training costs.

2.??Charterships at low cost

Not all SMEs realise that apprenticeships have changed quite substantially in the last few years and are now used to upskill and accredit existing the professional development of their staff, as they can include degrees or charterships. ?

Likewise, many small business leaders do not realise that graduates are eligible for apprenticeships or that the government pays 95% of the training costs.

As an example, you could enrol your accountant onto a three-year Accountancy Professional apprenticeship, where they will study towards Chartered status as part of the programme.

In total this would cost you just ￡1,050 over three years, allowing you to provide a level of training that is usually only affordable to big business, and a great way to reward and retain your best staff.

Take this short apprenticeship quiz to find out more about apprenticeships.

3.??Pipeline of staff

In a period of economic uncertainty, it’s important not to lose sight of your future workforce plans either. Planning now, for when the outlook is more stable, will give you a head start on your competitors that are only focused on the here and now.

Many SMEs are already experiencing difficulties recruiting the skilled staff they need to drive their business forward, so taking a longer-term approach to skills development and understanding how schools, colleges and other education establishments can help you with talent spotting will pay dividends in the years to come.

T Levels are new, two-year programmes, the equivalent to three A Levels, that give young people the technical skills they need to work in industry. As part of their course, students must do an industry placement – 45 days with a business – to really understand the world of work. Linking in with your local sixth form or college to provide industry placements will give you additional resource in the short-term and an opportunity to assess a student’s capability with a view to future recruitment.

Read more about T Levels to understand how you can get involved.

So which options are right for you? ?

In this article we’ve given you a quick overview of some of your options to collaborate with education to develop your staff, cut costs and plan for the future. However, there are dozens of other ways that might be more appropriate for you, so how do you know which options are right for your business?

The Gatsby Foundation has created The Education Landscape: A Guide for Employers and its accompanying Index – a resource that describes the options for small businesses to work with schools, colleges, and universities. This resource helps you compare your options simply, by highlighting the business benefits of each type of activity and the commitment you’d have to make. Visit the Education Landscape to download The Guide and Index and start preparing your business for a brighter future. ?