The Struggle of the Small Business Skills Gap

The skills gap isn’t just for big businesses anymore. The skills gap, for those who may not know, is the documented lack of talent in industries that require certain skills, such as IT, engineering, and in some cases, the medical profession. Without that talent, companies are confused how to grow. Traditionally, large businesses struggled with the skills gap. But even small companies are finding entry-level workers don’t have the skills they need to scale.

Small Business, Big Gaps

Small businesses have fewer spots to fill, but that doesn’t necessarily mean it’s easier to fill them. According to a report by the National Federation of Independent Business (NFIB), 29% of business owners reported not being able to fill positions in February of this year. 14% of those who couldn’t fill positions reported that the biggest problem for them was the lack of qualified labor. In a small business, every worker counts, and companies with open positions (whether they’re looking to expand or had someone leave recently) take a bigger hit to their ability to function than larger ones.

As time goes by, this becomes a larger and larger problem. In 2014, 30% of companies reported that a skills shortage was the biggest barrier to their continued growth. If companies can’t find the right employees to do critical task (which are again more important within small companies), they can’t grow. This a powerful motivator to close the skills gap. Small companies are turning to more innovative solutions that blaze past recruiting into training, learning and internal mentoring programs. If you can’t recruit ‘em, teach ‘em.

Closing the Gap, One Hire at a Time

How can small business owners close the skills gap? If they need positions filled immediately, higher compensation is the easy answer. With higher salary and compensation offerings, companies can attract higher-quality candidates, and a higher rate of pay could be the difference quality hires are looking for when looking to make a decision between two employers. But in many cases, the skills simply aren’t there and in specific markets, this compensation supply and demand can price smaller employers out of the market. Training those with the capacity for the skill rather than trying to recruit an in-demand skill may be the better option.

Companies may want to consider implementing apprenticeships as well. These programs combine on-the-job training with a regular education and could be the key to creating a new market of candidates with hard skills. However, apprenticeships fell 40% in the United States between 2003 and 2013. Employees who work through apprenticeships also tend to develop an affinity for their employer and tend to stick around after their program ends. Though it may require companies to invest extra in training, it’ll pay off with an employee with hard skills.

Part of the lack of interest in apprenticeships may be the fact that they are considered far more blue-collar than the gaps in the skills we identified at the beginning of the article. But in fact, apprenticeships are ideal for skills that are rapidly climbing in demand, like coding and programming. 

Closing the Gap with Big-picture Thinking

Taking a wider view of the problem, companies can further work with educators to programs for talent funnels. Educators want graduates to get jobs as soon as possible, and partnering with business benefits both parties. Small businesses agree: 57% are in favor of working with institutions to create these kinds of talent funnels.

Additionally, companies can help close the skills gap by thinking longer term in terms of hires. Though poaching employees from other companies benefits the poacher in the short term, it reduced the overall talent pool for the future. This could eventually come back to haunt all businesses, as it will only will make the skill gap problem worse.

It’s understandable that companies want quick solutions to prevalent problems. However, creating the talent you’re looking for by using apprenticeships or hiring candidates instead of poaching will go a long way toward fixing a problem that small businesses will eventually have to deal with.

Bio: Sean Pomeroy

While selling other companies software solutions, Sean worked with Michael Warden to design over a dozen applications for different organizations and industries over the years. Sean now focuses on the vision for the company, business development, and continues involvement in the software design of Cyber Recruiter, applicant tracking system and Cyber Train, learning management system. Want to see what Visibility Software has to offer? Take a demo now.

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Tweet me at @VisSoft

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