Home Business NewsSMEs double down on upskilling as they adapt to a shifting labour market 

SMEs double down on upskilling as they adapt to a shifting labour market 

by LLB staff reporter
11th Sep 25 10:26 am

Small and medium enterprises (SMEs) in the UK are increasingly pivoting to focus on internal talent during a tough labour market, latest research from Shawbrook reveals.

When asked about their plans for the rest of 2025, just under half (48%) of SMEs leaders revealed they are looking to upskill their current team, by far the most popular answer. This compares to 29% who plan on expanding their leadership team and a quarter (25%) who plan to hire new staff.

This strategic focus on developing internal talent reflects wider concerns about recruitment challenges. 56% of SMEs state they are concerned about the current access to talent in their industry, with a fifth (19%) feeling very concerned. Latest ONS figures show unemployment in the UK has reached a four year high – further underlining the importance of sustainable, long-term workforce strategies.

When asked what government action would facilitate an environment of growth, a third of SME leaders (34%) said they would like to see more skills programmes in the UK, with more than a quarter (28%) wanting to make it easier to bring skilled workers from overseas into their business, to help address resourcing gaps and stay competitive.

For many SMEs, upskilling is already paying off. Nearly three-in-ten (27%) SMEs cited investing in their current team as a key driver of growth in 2024 – highlighting the long-term value of nurturing existing talent.

Neil Rudge, Chief Banking Officer, Commercial at Shawbrook, said, “The first half of 2025 has undoubtedly been filled with challenges for UK SMEs, with the current state of the labour market representing a significant barrier to growth in many cases. However, clearly SME leaders know that the core of any flourishing business is the people within it, and it is heartening to see so many make upskilling their team a key priority for the rest of the year.”

“Our research shows that businesses who invest in their teams are the best primed for growth. Whilst the wider economic environment remains uncertain, specialist lenders are primed to help ambitious companies unlock the additional value needed to execute their growth plans, and turn that ambition into action.”

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