The Federation of Small Businesses (FSB) has published its latest, quarterly analysis of Small Business Confidence.
The FSB Small Business Index (SBI) is based upon an extensive survey of sole traders, micro businesses and small and Medium Sized Enterprises. It showed that small businesses in the East have growing fears that a shortage of appropriately skilled staff will undermine their recovery from the Covid-19 pandemic.
In the second quarter of the year, confidence among the region’s small firms slid to a net positive 12%, having hit a five-year high of 33% in the first quarter. This was still a sharp improvement on the -41% recorded in the final quarter of 2020.
The report showed that over the next three months over a quarter (27%) of small firms intended to increase their headcount, with 7% planning to reduce it. Just under half (45%) said they anticipated that access to skilled staff would be a barrier to growth over the coming year – the highest figure yet recorded by the survey for this issue. Around two thirds (65%) expected the domestic economy to be a barrier.
Just under three quarters (71%) of the East’s small businesses said they expected to implement salary increases in the next 12 months, with around half (49%) reporting the increase would be 2% or more.
David Bell, FSB’s Regional Chair in the East of England, said: “Small firms in our region are emerging from lockdowns under the strain of skills shortages, emergency debt repayments, rent accruals and business rates.
“Finding the right people is turning into a nightmare for many of our small firms. As we look to recovery, upskilling young people, who face an incredibly challenging climate, must be a priority for policy interventions at both the national and local level.
“Over the longer term, getting skills development right will require a holistic approach, empowering those in work to take control of professional development and reskilling, while also ensuring that education leavers have a plethora of attractive options – from work placements and qualifications, to apprenticeships, to clear information about career paths and in-demand sectors.”