Six out of ten (61%) SMEs believe there is a shortage of skills among their workers, according to the latest report from Lloyds TSB Commercial Banking.

A quarter (27%) point to gaps in marketing and sales skills, 21% emphasise IT knowledge and 15% cite management and leadership skills as areas that need attention. Just over one in ten (12%) say that project management skills need work while 11% point to team building skills.

When asked why these skills have not been given attention, 38% of businesses highlighted budget constraints, while 35% blame time pressures. Over one in 10 (13%) said they struggled to find the right training providers, while 12% are concerned about spending money to train staff who may then leave the business.

The same companies are concerned these skill gaps could:

• damage future growth potential (44%)
• inhibit their competitive edge (39%)
• make them less profitable (37%)
• stifle innovation (24%)
• harm staff morale (19%)
• negatively impact staff retention (12%)
• reduce recruitment opportunities (11%)
• make them less attractive to investors (9%)

In total, 95% of SMEs that identified skills gaps believe they are detrimental to the business. However, 30% of those questioned said employees have the required skills and require no additional training. This feeling was more acute in businesses with fewer employees.

David Oldfield, Managing Director, SME and Mid Markets Banking at Lloyds TSB, said: “If businesses are to seize opportunities for future growth and profitability, investment in skills needs to be at the top of their to do list. While there are some businesses that claim they have the skills they need for the future, most do recognise a need to develop skills across their workforce and can pinpoint the key areas in need of improvement.

"Given the recent economic headwinds that British businesses have had to endure it is understandable why some have not been able to make skills development a priority, but if they are to reach future potential growth they’d be wise to consider doing so now.”