Home Business NewsBusinessBusiness Growth News Despite the economic landscape, SMEs in London plan to grow revenue this year 

Despite the economic landscape, SMEs in London plan to grow revenue this year 

by Thea Coates Finance Reporter
6th Feb 24 8:23 am

A new report into the skills and recruitment challenges of small and medium-sized enterprises (SMEs) in London reveals that businesses plan to invest in their workforces by upskilling and recruiting through technical education, to plug skills gaps and meet ambitious growth plans in light of the cost-of-living pressures.

Now in its second year, The Skills Horizon 2024 Barometer, launched by the Skills for Life campaign in partnership with the British Chambers of Commerce, found that SMEs are adapting to continue investing in talent amidst a challenging economic climate.

Over half of London SMEs agree that the top concern for the year ahead is increased running costs (47%), with many also concerned about staff wellbeing linked to the cost of living (38%).

This has prompted more than two thirds of London businesses to consider investing in low-cost but longer-term workforce recruitment tactics such as school leaver employment schemes (e.g. apprenticeships) (54%) and offering work placements (e.g. T Levels) (63%). London SMEs consider the top benefits of these technical education options to be the opportunity to shape young talent (68%) and the opportunity to address skills gaps in businesses (57%).

More than three quarters of London SMEs (77%) are looking to take an introspective approach by investing in their current workforce with 3 in 5 (62%) considering offering training and employment schemes for existing employees to help plug skills gaps they foresee in the year ahead.

Reflective of the change in approach, are the current top skills London SME employers are looking for in job candidates. ‘A particular level of qualification’ might have once been a non-negotiable on most job descriptions, but it is now near the bottom of the agenda (18%).

Instead, employers are open to more routes and seeking attributes that enable employees to thrive in a fast-paced environment. The top traits employers will look for in London 2024 are ‘a good work ethic’ (36% of employers agree),’ a team player’ (37%) and ‘a quick learner’ (30%).

Reassuringly, diversity, equity and inclusion also remain crucial for London employers, with more than 2 in 5 (44%) hoping new talent recruited in 2024 will help diversify the workforce ahead of 2025.

Despite the financial challenges highlighted by SMEs, there is optimism for the year ahead as a high majority (91%) of London businesses plan to grow revenue in 2024. On average, London SMEs expect to grow 33.02% in the next year.

These ambitious targets may well be reflective of the advantage London SMEs feel they have with 80% believing they can be more agile than larger businesses when it comes to recruitment and upskilling their workforce. This ability to be nimble in their approach has already helped London SMEs when it comes to setting up technical education routes and reaping rewards. Over the past year 81% reported seeing other businesses benefit from the available schemes.

The latest findings from the Skills Horizon Barometer coincide with National Apprenticeship Week – a moment dedicated to celebrating apprenticeships, and new routes that can lead to them such as T Levels, as well as their positive impact on communities, businesses, and the wider economy.

This ambition is shared by the Skills for Life campaign which helps SMEs understand all the technical education training and employment schemes available to them, including the aforementioned Apprenticeships and T Levels as well as Skills Bootcamps, HTQs and Multiply numeracy courses.

Minister for Skills, Apprenticeships and Higher Education Robert Halfon said, “This report is testament to the hard work and can-do attitude of our brilliant small businesses, and I know that they will welcome the positive forecasts for growth, which have improved thanks to crucial government investment in skills.

“We’ve transformed the skills landscape with expanded apprenticeships and new T Levels, revolutionising opportunities for young people to climb the ladder of opportunity towards their first job or further study, and giving businesses the skills they need to thrive.”

A partner of the Skills Horizon Barometer, Jane Gratton, Deputy Director – Public Policy at the British Chambers of Commerce, said, “Investing in a skilled and diverse workforce makes good business sense and is crucial to addressing the economic challenges and opportunities that lie ahead.

“While experience and qualifications are valued at recruitment, businesses are increasingly looking to develop their workforce on the job.

“This means accessing a wide range of flexible, technical and vocational training to upskill their staff and create an internal pipeline of talent. They know this will put them on the best footing possible, as the workplace evolves and demand for new skills and knowledge emerges.”

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