SMEs' Skills challenges in Scotland

There are significant skills shortages in Scotland, with almost two thirds of Scottish employers (63%) struggling to access the talent they need, according to The Open University’s Business Barometer Report 2021. This situation is having a big impact on many small and medium sized enterprises (SMEs) in Scotland.

As a result, The Open University in Scotland (OUiS) recently produced an employer podcast, the focus of which was skills development and access to talent in Scotland. Suzanne McQuade, Business Relationships Manager at the OUiS, hosted the podcast. Joining her to discuss the challenges and opportunities presented by the changing skills landscape in Scotland were Barry McCulloch, Head of Policy, Scotland, at the Federation of Small Businesses (FSB) and Maria Bell, Managing Director at Shetland-based software development company Mesomorphic.

Opening the podcast, McQuade talked about the effect that digitisation is having on workplaces, including changing skills needs. “The world of work is rapidly evolving,” she said. “The new and emerging technologies of the Fourth Industrial Revolution are having a transformative effect and disrupting business models.”

McCulloch, whose organisation represents the 340,000 plus SMEs operating in Scotland – 99.3% of all Scottish businesses – agrees with McQuade that the skills crisis in Scotland is having widespread impact. He thinks Covid-19 has compounded the situation, exposing a lack of investment in newer skillsets.

Covid has effectively accelerated changes in the skills landscape and it’s highlighted that too few workers and business owners have kept skills up to date. You can see that in areas like digital leadership and management, but also in soft skill areas such as communication, self-management, teamwork and attitudes to work.

Barry McCulloch
Head of Policy, Scotland, at the Federation of Small Businesses (FSB)

Because there is such a shortage of these skills, McCulloch says many SMEs are unable access the talent they need.

However, McCulloch says a real positive to come out of Covid-19 has been the uptick in online learning and the popularity of platforms such as the OU’s FutureLearn. “We could talk all day about the explosion of online learning, about microcredentials,” he said. “It’s such an exciting space and it’s never been easier to do.” McCulloch also talked about the extensive support available to SMEs from bodies such as Skills Development Scotland and from the OUiS.

Competition for skills, particularly digital skills, is undoubtedly fierce in Scotland. But Bell thinks positives are starting to emerge. She says the pandemic and the skills shortage have raised awareness of the importance of upskilling and reskilling. As a result, she says an increasing number of employers are investing in skills and are taking a more holistic approach to employee development. “At Mesomorphic, we always encourage people to try skills outside of their job remit,” she said. “And we’re starting to see more companies adopt that model. Business owners are becoming more flexible with their approach to accessing these key skills and how they’re training up their staff.”

The rapid switch to remote working during the first lockdown and in subsequent lockdowns prompted many employers and employees to reassess working environments. Bell thinks this has enabled employers to reach out to a much wider, more diverse talent pool. 

The opportunities for companies in remote areas to adopt this type of working would be really beneficial – you’re opening up your talent pool to anywhere in the world.

Maria Bell
Managing Director at Mesomorphic

Bell went on to talk about Silicon Croft, an initiative to boost digital and soft skills in Scotland. “We were looking at how we can support the development of digital skills in Shetland to create more opportunities for local employment in digital agencies. We are now working with educators to support the development of these skills at a curriculum level, within different learning environments.” It has proved so popular that Bell hopes to extend it to the Scottish Highlands and islands.

The OUiS has engaged extensively with SMEs across Scotland, in urban and remote locations, talking about changing skills and talent needs and how the OUiS can support employers.

McQuade ended the podcast talking about the importance of initiatives such as Silicon Croft and partnership working. “Collaboration is key,” she said. “It’s about looking at where there are synergies with other organisations. That’s something that resonates very much with the Open University in Scotland, especially over the past year.”

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