As we look forward and ask ourselves the question, how do we build a sustainable ‘new economy’ in a post-Brexit world, one thing that stands out to me is that mid-sized, high growth entrepreneurial businesses are an essential and dynamic element of the county and yet they are frequently being overlooked and undervalued.
With global giants such as Rolls Royce, Toyota and Bombardier frequently in the media and often considered the backbone of the Derbyshire region due to sheer scale, it becomes easy to overlook those mid-sized businesses who are not only contributing significant revenues to the economy but who are also growing at a significant pace.
The Derbyshire Growth Barometer has recognised those mid-sized businesses and identifies the top 50 fastest growing within the region.
When speaking with a number of the companies from the top 50 list, a consistent theme was the skills gap and how it is affecting their business. They explained that it is becoming an increasing challenge to recruit and retain the right people, perhaps even more so in the areas of Derbyshire outside of Derby City Centre.
Further to this, a BDO national survey of mid-sized businesses illustrated that of those surveyed in the Midlands region, 85% have difficulty in recruiting people with the right skills, with 46% of these citing this as a problem in key positions. When compared with the rest of the UK outside of London and the South East, 76% of the mid-sized firms surveyed stated that they had difficulty in recruiting the right skills; it is evident that this is a key issue for the East and West Midlands.
The survey results also show that technology is the key area for which mid-sized businesses are struggling to find recruits, with over half (54%) stating this as a challenge, closely followed by engineering where just under a third (31%) are experiencing the most issues.
In order to enhance the availability of skills, BDO suggests changing current apprenticeship plans so apprentices are given equal weighting to university entrants, government targets reflect results and standards are comparable across the UK.
An example of where policy is supporting apprenticeships is the advent of the Apprenticeship Levy which occurred in April 2017. Employers with a pay bill greater than £3m per annum will pay 0.5% into a levy. This investment will then be used by employers to offer apprenticeship opportunities to both new and existing staff.
Employers now have ownership of the skills system and have worked in groups to design new standards that define the knowledge, skills and behaviours required in every new apprenticeship. Employers can use their influence to select quality providers to deliver the training as well as negotiate the price.
The second key policy BDO are calling for, is the expansion of Higher and Degree apprenticeships, which is the fastest-growing element of the apprenticeship programme. Progression will be pivotal for employers – enabling their staff to do training at Levels 3, 4, 5, 6 and 7. Degree apprenticeships are now a credible alternative to obtaining qualifications from university. Enlightened employers need to understand now that apprenticeships can unearth a new talent pool and a potentially lucrative one, where there are demonstrable returns in terms of increased business competitiveness and productivity.
And finally, given the skills shortage in the tech industry, BDO believe the Government should reinstate the two-year post-study work visas for postgraduates in STEM (science, technology, engineering, and maths) subjects.
Peter Marples, Group CEO of 3AAA, who featured at number seven in our growth barometer, says ‘the advent of the new levy for employers brings the focus of skills development to the fore. We are helping many businesses take a strategic look at how they recruit for the future, develop existing staff and use this as a core part of their reward and progression approaches within their businesses. The apprenticeship levy and new apprenticeship standards is a game changer for many businesses’
Download the Derbyshire Growth Barometer 2017
Gareth Singleton is Head of the Derbyshire Team and Audit Partner at BDO.