Another headache for small businesses

The latest UK unemployment figures may have been heralded as good news by the government but they are adding to another headache facing small businesses.

The nation’s jobless rate remains at a near record-low 3.9 per cent, according to Office for National Statistics (ONS) analysis published in April. That is down from more than eight per cent earlier in the decade.

However, when you take into account that net EU migration to the UK fell to the lowest level since 2009, it is little wonder that the latest Small Business Index (SBI) shows that one in three smaller firms identify access to the right staff as a major barrier to growth.

Put that all together and you can see why business groups are warning of a tightening labour market and portentous skills gap.

According to the Blackpool headquartered Federation of Small Businesses (FSB), one in five small UK employers rely on staff from the EU. So that sharp drop in European arrivals has been described as a real concern for many smaller firms.

The British Chambers of Commerce has warned of perennial skills shortages “plaguing” businesses, while The Recruitment and Employment Confederation as described shortages of key staff as a “big risk” to future growth.

The sharp drop in European arrivals has been described as a real concern for many smaller firms.

FSB chairman Mike Cherry summed up the situation warning: “At a time when political uncertainty is making it impossible to plan and operating costs are spiralling, a tight labour market represents yet another headache for small business owners.”

It also claims the settled status programme for EU workers is beset by glitches, data breaches and poor accessibility on phones.

It is now calling on the government to deliver on its pledge of a one-year national insurance holiday for those “furthest from the labour market”.

It says that with skills shortages starting to bite, it’s vital that businesses are helped to bring more people who are living with a disability, long-term unemployed or ex-offenders into their workforces.

With our political leaders trapped in the Brexit mire, it remains to be seen if they will act.