Earlier this year, I spent a week travelling across the country and speaking with over 150 leaders of small and medium sized enterprises (SMEs).
The conversations took place in different places and sectors, but a consistent picture emerged.
There is no shortage of ambition among smaller businesses. Leaders want to grow, invest in their people, improve how their businesses operate and make better use of new technology.
The challenge is that they are trying to do all of that while running the business day to day.
Costs are up. Margins are tight. Recruitment remains difficult. For many smaller firms, the person thinking about the next stage of growth is also dealing with customers, managing the team and keeping the business moving.
What I’ve heard from across the country
The clearest message I took from these conversations was that, for many SME leaders, the immediate constraint is not ambition. It is time and headspace.
Many business leaders already know that investing in skills matters. They can see the link between stronger teams, better performance and long-term growth. But too often the skills system can feel difficult to navigate, slow to engage, and disconnected from the practical realities of running a business.
That matters. SMEs provide three-fifths of private-sector jobs and sit at the heart of communities and local economies across the country. Their ability to develop people and create opportunity will be central to achieving better jobs, stronger growth and higher productivity.
The conversations pointed to three practical priorities.
Make it easier for SMEs to tap into the skills system
Smaller businesses should not need to become experts in the skills system before they can develop their people.
They need clear information about the options available, where to go for support, and what is likely to work for a business of their size and sector. That means reaching them through the people and organisations they already trust, including their accountants, trade bodies and local business networks.
It also means giving them access to other business leaders who can talk about the difference that investing in skills has made to their own business.
Help SMEs work together to get more from the skills system
A single small business may not have enough demand to create a training cohort, commission a tailored programme or establish a meaningful talent pipeline.
But businesses working together can achieve far more.
Stronger local and sector-based skills ecosystems can bring employers, colleges, providers and other partners together around shared needs. I have seen examples of this already happening around the country in sectors as varied as defence, construction, gaming and textiles.
These partnerships can help smaller businesses pool demand, share insight, and access training, talent pipelines and support that would be difficult to get on their own.
Make the business case for investing in skills clearer
Smaller employers do not need to be persuaded that people matter. They need a clearer view of how investing in skills can help solve the challenges in front of them: driving growth, improving productivity, managing rising costs, filling roles, retaining good people, adopting new technology and creating opportunities for progression.
Moving forward
This is why Skills England is establishing three Task and Finish groups, focused on each of these priorities.
The groups will bring together SME leaders, subject-matter experts and partners from across the skills system. Their purpose will be to turn real business experience into practical approaches that can be tested, refined and, where they work, scaled.
The focus will be on the barriers that matter most to smaller businesses, and on changes that can make a real difference.
As a Skills England board member, I want to ensure that the experience of smaller businesses remains at the heart of this work. That means bringing employer insight in early, learning from what is already working in different places and being clear about where the system still needs to get better.
Small business leaders do not need to be told that skills matter. They already understand the value of a capable, motivated team.
The challenge is making it easier to act on that understanding, without adding another thing to an already crowded to-do list.
Anthony Impey
Skills England board member