Nearly 1 million (81%) small businesses across England have major recruitment concerns, according to new research out today.

Small businesses make up 97% of employers across England, and many are facing a tough year ahead. The research, commissioned by the Gatsby Foundation, shows being able to recruit staff with the right knowledge and skills for their needs is the second biggest overall issue for small businesses (43%) after rising costs (51%).

More than half (55%) believe there is a lack of candidates with the right knowledge and skills, and on top of issues recruiting new employees, the research also reveals a potential blind spot for employers facing difficulties retaining staff and boosting productivity, with 86% of small businesses saying they face barriers upskilling current employees. Businesses recognise the top motivators for their employees to perform are ‘a clear route for progression’ (47%) and 'opportunities to develop new knowledge and skills’ (43%). However, on average, just 38% of small business employees undertook training in the last year – meaning many businesses could be losing out on nurturing talent, as well as attracting new staff.

The research findings suggest many small businesses are uncertain about how to engage with the current education and skills landscape, which can help to alleviate some of their recruitment and upskilling concerns.

Gatsby, a charitable foundation set up by Lord David Sainsbury to support and strengthen technical education, has released the research to coincide with a new, impartial resource for businesses. Education Landscape: A Guide for Employers is an overview of the education system in England as a whole and explains how employers can work with schools, colleges and universities, and the wider skills system, to benefit their business – from opportunities to discover new talent and fresh perspectives, to developing their existing workforce, building new partnerships, and making valuable, local connections.

Jenifer Burden MBE, Director of Programmes at Gatsby, said: “Small businesses are the backbone of our economy and society, but there’s no doubt they’re facing a tough year ahead. As our research shows, one of their major challenges is getting to grips with the education and skills landscape, which has changed and can be complex to understand. But the good news is businesses can benefit in a number of ways. The Education Landscape: A Guide for Employers has been developed with major industry bodies to help businesses understand how they can get the most out of engaging with the education system – from shaping the skills being taught in their local area around their own business needs, to motivating and retaining current staff.”