Skills shortage problems for East Midlands SMEs

Added by Love Business East Midlands | 24 April 2019

UPDATED: 24 April 2019

East Midlands SMEs have battled recruitment problems and a sustained shortage of skilled people since 2016, according to analysis of an independent report.

The review compared three years of results of The East Midlands Top 200 Report, which is compiled by the regional office of business and financial advisers Grant Thornton UK LLP in partnership with the CBI, to identify the trends and challenges faced by the region’s top performing businesses since 2016.

The analysis confirms the ongoing skills shortage across the East Midlands, and highlights that the region’s fastest growing companies have faced a three-year challenge to find and retain the right talent, especially for highly skilled roles.

More than half (56%) of the region’s most profitable businesses described the region’s talent pool as lacking in 2017, with a short supply of individuals with the skills and qualifications they need.

This grew to 69% last year, when a Confidence Survey conducted as part of the 2018 Report found that more than two-thirds (69%) of the Leicestershire, Nottinghamshire, Lincolnshire and Derbyshire businesses taking part, said they believed the region’s skills shortage was their biggest barrier to growth.

However, job creation is still a significant achievement for East Midlands companies, with the top 200 firms growing jobs year-on-year by an average 28%, creating in the region of 40,000 net new jobs over the last three years.

Manufacturing, services and retail are the region’s top sectors for employment growth, providing the greatest number of jobs in the region between them for the last three years.

Commenting on the figures, Mark Pashley, Director at Grant Thornton’s East Midlands office in Leicester, said:

“We have reviewed the findings of the last three years of the Report to identify and highlight the emerging trends, opportunities and challenges that have faced many of the East Midlands fastest growing companies on their business journey since 2016.

“This analysis has delivered a valuable insight and confirmed that attracting talent into the region and retaining its most skilled workers continue to be the main challenges.

“Research behind compiling the annual East Midlands Top 200 Report involves examining a range of issues from job creation and pay, to the best performing sectors and biggest challenges for high performing, fast-growing companies. Consistently the region’s skills shortage and retention feature as a big concern for employers, and are crucial to driving growth and creating a vibrant regional and local economy.”

However, East Midlands firms have performed well since 2016, with profits at the region’s top 200 firms growing by an average rate of 33% a year, with adjusted profits up from £812million in 2016, to £1.6billion in 2017, and more than £2billion last year.

According to the Report, the East Midlands’ top three sectors for consistent profit growth since 2016 are manufacturing, transport and logistics, and property and construction.

Produced annually since 2013, the East Midlands Top 200 Report analyses the financial performance of the 200 businesses in Derbyshire, Leicestershire, Lincolnshire and Nottinghamshire that have delivered the greatest, sustained profit growth.

The Report provides the region’s only in-depth study into the East Midlands’ fastest growing companies by key sector and performance indicators, to deliver a barometer of overall economic performance.

Grant Thornton will reveal the findings of the 2019 East Midlands Top 200 Report later this year at events in Leicester, Nottingham and Lincoln during September.

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