Identifying the skill requirements of the workforce in SMEs: findings from a European Social Fund project

As market trends evolve and core business activities shift into new territories, there is a need for companies to facilitate a corresponding change in the skills base of the workforce. This paper reports the findings of a European Social Fund (ESF) Objective 4 project, which was carried out throughout 1998/1999. Fourteen innovative, technology‐based small and medium‐sized enterprises were interviewed with the aim of investigating the processes currently in place to aid in the establishment of a skilled workforce, and the extent to which future skill requirements were identified. The research methodology involved a series of semi‐structured interviews with owner‐managers, managing directors and other staff within the sample companies. The first interview, involving 20 companies, allowed general company information to be collected and interviewees were questioned about business planning and those factors considered to be of strategic importance. The second interview, involving 14 of the original 20 companies, investigated human resource issues in depth. Respondents provided information about staff recruitment, retention and training and the extent to which these issues were integrated into strategic plans. The study used Investors in People (IiP) guidelines to identify potential models of best practice and therefore to aid in the production of the research questionnaire. It was found that the majority of respondent companies did not use a sophisticated approach to identify current and future staffing needs. Recruitment and staff development were addressed as and when required, thereby catering for immediate operational needs. Only three of the 14 companies had formal training plans in place, which integrated human resource plans with long‐term strategic business plans. An earlier version of this paper was presented at the 23rd Institute for Small Business Affairs Policy and Research Conference, November 1999, Leeds, UK.