FSB top lines: Education and skills
The rising UK skills shortage should be addressed. The rise in the number of vacancies due to
skills shortages, despite an increase in further and higher education numbers, suggests that
businesses do not have access to the skills they need.
Young people lack workplace skills required by businesses. The top five skills lacking in young
people, according to FSB members, are all personality traits; general attitude to work,
communication skills, self-management, people skills and literacy; with English and maths
following behind. The majority of businesses undertake informal on-the-job training and
remedial training. The need for remedial training would not be necessary if young people gained
these skills through the education system and welcomes the focus on raising standards in English
and maths. The FSB is supporting Young Enterprise in its efforts to link businesses with students
to provide business experience.
Careers education should be embedded in teaching from an early age. To support this, teachers
need to have the resources and knowledge to deliver this confidently and embed it into their
lessons. High-quality independent careers advice is vitally important, especially as participation
rates in vocational pathways are rising. Schools should promote vocational routes, such as
apprenticeships and traineeships, alongside academic study. This should occur before reaching
the age of 16 to give clear guidance as the participation age rises to 18 by 2015.
Employers should be engaged in the education system. It is widely recognised that business
engagement has positive employment outcomes for young people and the FSB is working to
encourage its members to take on work experience, become school governors, and work with
schools and colleges to inform them of what skills are needed for the modern workplace. 86 per
cent of businesses cited the importance of work experience as a factor in making recruitment
decisions. However, worryingly over 30 per cent of small businesses said they would not engage
with schools and colleges in the future. The biggest reasons cited for this was the lack of
willingness of institutions to engage, time and cost.
The FSB supports the Government’s vision for apprenticeships and welcome reform that seeks
to make apprenticeships more employer-led. 60 per cent of small firms have taken on an
apprentice in the last two years but over two thirds have never taken an apprentice on.
Apprenticeships should be valued by employers, be accessible and easy to navigate, and not be
an administrative and financial burden on business. The introduction of a voucher scheme has
been welcomed but there are still uncertainties around the funding mechanism to be introduced
for small businesses. Large firms will be required to contribute through an apprenticeship levy
and the FSB is in discussions with the Government about how this will work and its impact on
Employers have a role to play in giving young people the skills they need for the workplace.
The FSB is engaging with the Careers and Enterprise Company, set up in response to Lord
Young’s Enterprise for All report on embedding enterprise into the education system. The
company will be rolling out regional coordinators that will gather networks of volunteer
enterprise advisers to engage with schools. They would like to see the FSB encourage its
members to become advisors.
The skills and productivity of business relies on the ability of its workforce to adapt. Despite an
overwhelming majority of businesses recognising the importance of workforce development,
many cannot afford to invest in training. With only around one in ten small firms knowing that
tax relief is available for training, and five per cent of small businesses actually making use of it,
it is clear that advertisement and accessibility needs to be improved . It is imperative that small
businesses understand what support is available to them and be able to access Government
support without it becoming burdensome to do so.
Leadership and management
Effective leadership and management is vital to the success of a business and to addressing the
UK’s productivity deficit. However, the 65 per cent of managers had a skills shortfall in this area .
FSB research found that over a quarter of small business owners have never undertaken formal
management training and nearly half of these businesses weren’t sure how training would
support their firm . The lack of management training is impacting on the ability of UK firms to
improve productivity. Growth Hubs can play an important role in guiding business leaders to
appropriate guidance and training but provision and accountability mechanisms are not
universal. Working together Growth Hubs and LEPs should be required to recognise and respond
to the leadership and management capabilities in their region.
1 UKCES, The Labour market story: An overview, July 2014. UKCES, Employer Skills Survey 2013, January 2014.
2 FSB Education and skills survey 2015
3 FSB Education and skills survey 2015
4 Lord Young, Enterprise for all: The relevance of enterprise in education, June 2014.
5 2015 FSB Education and Skills Survey
6 2013 UKCES Employer Skills Survey
7 2015 FSB Education and Skills Survey