The productivity of mid-sized businesses in Wales is being dragged down by a lack of key skills, according to new data.
Business and financial adviser Grant Thornton UK LLP’s latest Business Outlook Tracker found that just over three quarters of business leaders (76%) believe that a lack of vital skills is affecting productivity levels. Digital skills were identified as the most in need (29%), followed by leadership skills (24%).
The survey of mid-sized regional businesses revealed that 66% were planning to invest more or the same in skills development over the next six months. Many have already established their own development programmes, with 82% of those who noted they were lacking digital skills having in-house coaching to boost this. All of the businesses currently facing gaps in leadership skills also have training in place.
The high-tech nature of many businesses’ productivity concerns is reflected by the fact that 72% will be investing more or the same in technology over the next six months. However, only 32% of respondents believe that AI will have a positive impact on their productivity over the next 12 months.
The survey finds that productivity issues are currently affecting almost every aspect of mid-sized businesses, including the ability of Welsh companies to export and to train and upskill employees.
Alongside skills shortages, other important factors impacting the productivity levels of Welsh businesses include regulatory and legal barriers (30%), lack of funding for further investment (26%) and inadequate technology or infrastructure (22%).
With a General Election called for 4 July, the majority of Welsh businesses (71%) claimed to have confidence that the next UK government (of any party) will focus on prioritising long-term solutions to address the nation’s productivity issues.
Alistair Wardell, Partner at Grant Thornton UK LLP and head of its Restructuring Team in the South of England and Wales, said:
“It’s clear there’s a strong demand for further investment in skills development in Wales, with business leaders recording a need for better digital and leadership skills to help boost productivity. This lack of necessary skills development, combined with a lack of funding for investment in core areas, is likely creating a snowball effect, stretching current people resources and ultimately contributing to heavy workloads and inefficiency – further exacerbating the productivity challenges facing the market.
“Ahead of the General Election, the major parties have outlined that they are focusing on enhancing the skills and training opportunities available to the country’s workforce. It’s crucial then that the parties listen to what mid-sized businesses, the engine of the UK economy, are saying they need and put forward solutions to address the constraints currently hindering the growth and productivity of a core segment of our economy.”
