Industry agencies seek to reduce skills gap among SMEs

A MentorsWork report, published by the Small Firms Association supported by Skillnet Ireland, focused on assessing the people and leadership skills in small and medium businesses (SMEs), has shown that micro-businesses and newer businesses have skills deficits when it comes to people and leadership skills.

The research indicates that smaller SMEs are falling behind especially in key areas including performance management, teamwork, creating a culture of innovation and guiding change.

The People and Leadership competency score was highest for larger SMEs, those with over 50 employees, and for established businesses over 21 years in operation. It was lowest for micro-businesses with nine employees or less, and for ‘younger’ businesses operating less than 10 years.

The research surveyed 615 business owners, asking them to self-assess their people and leadership competencies. Weighted responses were then compared between the different businesses, differentiated by size, business age and sector.

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Amongst the key findings of the survey were: communication and negotiation skills, inside and outside the organisation, were identified as below average in businesses operating less than 20 years, and in those employing 50 or less.

The leadership skillset, defined as helping people realise their potential, while inspiring them to work with the business to achieve strategy and goals, was lowest for micro-businesses with 9 or less employees, and for younger businesses, established less than 10 years.

Resilience, the ability to keep calm and to bounce back from setbacks was seen to be lowest in the retail/hospitality sector, in micro-businesses and in younger businesses. Larger businesses (50+ employees) and younger businesses (0-10 years) were identified as below average with innovation skills. Innovation was defined as being able to pivot and innovate in line with customer and market demands.

Mark Jordan, chief strategy officer with Skillnet Ireland, welcomed the publication of the report: “Insights direct from businesses and business owners and managers, underpins everything that we do at Skillnet Ireland.

“The publication of this research allows us to understand the skills businesses need support with, and how those needs vary across the SME landscape. It also helps us to continue to deliver that support through programmes such as MentorsWork, which features people skills as one of its four crucial pillars for development. Ensuring businesses can develop the people and leadership skills they need is vital to driving productivity and growth.”

MentorsWork is delivered by the Small Firms Association (SFA) in partnership with Skillnet Ireland. Launched in 2020, it is a nationwide upskilling scheme to help boost SME productivity levels, using one-to-one mentoring sessions, peer-focused workshops, expert-led masterclasses and an online learning platform with practical business tools.