The UK’s skills gap is keeping workers from developing the basics, and leaving small businesses struggling to find people who can hit the ground running.
According to analysis from the OECD, socio-economic background is now the strongest influence on whether someone develops essential problem-solving, literacy and adaptive skills throughout life. For small and medium-sized businesses, that means the hiring pool is shaped long before a CV ever lands on a desk.
The Government’s 2024 Employer Skills Survey shows the extent to which that rings true, with twenty-seven per cent of all UK vacancies classed as “skills-shortage vacancies”. It also showed that the smallest firms (those with just two to four employees) faced the highest density of these shortages, with 12 per cent of employers having at least one member of staff who was not fully proficient in their role.
Clearly, the issue for SMEs is not just that these gaps exist, but how quickly they create operational pressures, particularly within sectors facing some of the toughest hiring conditions in the country, such as hospitality.
The Digital Skills Gap: A Growing Challenge
These gaps are becoming harder to ignore on a digital and AI skills shortage front too. The OECD notes that the skills most vulnerable to unequal development are also the ones most demanded by technology-driven workplaces: communication, judgement, creativity and adaptive problem-solving – meaning the people least likely to access workplace training are also the ones whose roles are changing fastest.
That’s a huge concern given that adults with lower levels of educational attainment are far less likely to take part in upskilling, and thus far more likely to contribute to widening the skills gap even further over time. According to the OECD, workers who most need opportunities to build essential skills are the least likely to access them, leaving SMEs with an even smaller pool of job-ready candidates.
Why Small Businesses Bear the Brunt
Small businesses rely on people who can learn quickly, switch tasks and work independently. Research indicates they feel labour shortages more acutely because they tend to draw from local labour markets where educational disadvantage, lower access to training and limited mobility are more common.
While larger employers can compensate for these gaps through workplace training solution programmes, dedicated HR teams or placing new hires into narrower, more structured roles, small businesses don’t always have the same resources available. And when a new starter lacks confidence, communication skills or the ability to troubleshoot independently, the pressure on already strained teams is immediate.
Turning the Skills Gap into an Opportunity
Foundational skills are shaped across a lifetime, not just adolescence. One of the most effective environments for picking them up is the workplace itself. In an ideal world, SMEs would be uniquely well-positioned to offer the autonomy, variety and real-world problem-solving that help workers develop judgement, adaptability and confidence.
But being well positioned does not mean they can shoulder the responsibility alone. Small businesses need access to affordable training tools, incentives for in-work learning and clearer, more flexible qualification pathways. Without that help, they’ll continue competing for a narrowing pool of job-ready candidates.
Modern work demands adaptability, empathy, problem-solving and judgement, skills typically acquired through experience. And in a labour market where access to that experience is uneven, small businesses often become the ones who give people their first real chance to gain it. Not because they have large budgets, but because they offer something many workers have never had: room to grow.
