While SMEs in Europe struggle to find and retain skilled workers, only a minority is planning to invest in skills development.
The European Commission (EC) considers small and medium-sized enterprises (SMEs) “essential drivers of Europe’s green and digital transitions” but acknowledges that they face a lot of uncertainty due to the current economic and political challenges. On 12 September 2023, the Commission proposed new measures for short-term relief and to improve long-term competitiveness of SMEs. These include, for example, rules to combate late payments in commercial transactions and to simplify SMEs’ interactions with tax administrations. The package includes support for education and training to provide skills necessary for SMEs development; the European Pact for Skills’ Partnerships are the main instrument in this regard. Under this initiative the Commission launched 14 sectoral industrial ecosystems that bring together public authorities, training providers and companies to collectively strengthen the skills development in the respective sector. All members of the Pact have to make clear commitments for skills provision. The Erasmus+ programme also provides funding for projects of members of the Pact for Skills.
In parallel to the SME relief package, the Commission published the results of a flash Eurobarometer survey on skills shortages and skills strategies of SMEs. The results are based on a representative sample of SMEs from the EU-27. The challenges of SMEs in finding and retaining skilled workers are similar to the entire economy in Europe (see SwissCore article). 78% of SMEs report difficulties in finding workers with the right skills. The highest percentages of difficulties are found in Austria, Croatia and Slovakia. However, the question about retention of skilled workers reveals a mixed result: 52% find it difficult, as opposed to 44% that do not report difficulties. The effects of the skills shortages seem evident: 63% report that the shortages hold their business activities back. Additionally, 45% report that their introduction and use of digital technologies is held back.
The SMEs adopt different measures to tackle skills shortages. 43% of companies make better use of the skilled workers they already employ, for example by internal staff mobility and job rotations. 35% of SMEs report to invest more in training, and a third improve benefits in order to increase job attractiveness. A quarter invest more in candidate searches and 23% move to change work processes, such as outsourcing or automation. Lastly and surprisingly, despite two thirds of SMEs reporting that it holds back their business activities, only 9% decide to abandon the activities facing the shortages.
When it comes to public policies, the SMEs state that better collaboration with public employment services (58%) and better tools for assessing applicants’ skills (49%) and for assessing companies’ needs (46%) would make recruitment easier. Only a minority (38%) wish for easier procedures for the recognition of foreign qualifications.
The challenges in implementing the measures are manifold: Half of all respondents report difficulties in finding time for their employees to participate in training. However, finding training opportunities or funding to cover training costs represents only a difficulty for a minority of SMEs. The EU’s support for skills training is almost completely unknown among SMEs: Only 5% are familiar with the relevant EU funding programmes and only 3% with the policy initiatives for skills. The European Year of Skills has a long way to go to raise awareness on the EU’s work on skills development to the relevant actors.