Expert Roy McCreadie reveals impact of SMEs on the Cumbrian economy

Ray says: "If you are an owner of an SME (small medium enterprise) based in Cumbria you will no doubt have your own take on the state of the economy, shaped by your recent experiences and the balance sheet of your business. But no matter how your business is performing, it is fair to say that the last decade has presented businesses with more than their fair share of challenges, from the banks going bust to question marks over Brexit, the Covid pandemic and now the war in Ukraine.

In common with most areas in the UK, the registered business base in Cumbria, according to the Cumbria Intelligence Observatory, is made up of micro and small businesses with 90% of registered enterprises employing fewer than ten people. Many of the smaller businesses are facing particular challenges as a result of Covid, which will have far reaching consequences for their growth potential and on plans to recruit new staff, particularly young people or those requiring training. Despite the predominance of small businesses, the geography of Cumbria means that in some areas there is significant employment dependence on a small number of large firms with the health of the local labour market strongly linked to trends within these firms and their supply chains.

To get around these issues it is essential that SMEs find time to undertake a number of fundamental business processes one of which is workforce development planning. The process which aligns business goals and needs with business strategy. In a start-up situation, you create a business plan to present to investors hoping that your new business venture will get funding – which is necessary to pay your bills, including employee salaries. Workforce development planning is a fundamental part of doing business, however, how many SMEs do not have the time or the expertise to develop these plans.

Not to worry, help is on hand through a number of Government initiatives such as the Cumbria Growth Hub which is supported by the Cumbria Chamber of Commerce and their team of business advisers who can offer a free development service for Cumbrian SMEs.

Workforce development planning is the alignment of core business goals with people strategy. It makes no sense to plan the launch of a new venture or product line without thinking about R&D, supply chain, and the skilled staff to make or provide that product or service. Workforce development planning is the tool you use to ensure that alignment of these business needs. Remember, when you carry out a workforce development planning exercise this is more than just figuring out who you need to upskill or recruit. There are many ways to approach this, but here are the four critical elements that will make your workforce planning a success.

1. Understand the Company’s Mission and Goals

Workforce development planning does not exist in a vacuum – it needs to support the company’s goals. Are you looking to expand your customers, products or service base? The company’s mission matters as well. What is the most important thing to the CEO, shareholders, employees, and customers? Make sure you have that answered before you move to step two.

2. Conduct a Current State Gap Analysis

This is a systematic method of understanding the gaps in the organisation. What is missing? While workforce planning focuses on the people side of the business, keep in mind that a gap analysis looks at all business areas, not just skills and talent. People are not at their best unless they have the equipment, training, and support they need.

3. Project the Future State of the Business

This involves speaking with company leadership team and involving every unit in the business. You are looking for where the growth will be and where the workforce will shrink. You want to determine what skills the company will need in the coming years, not just now.

4. Conduct a Future Gap Analysis and Training Plan

Knowing what you do about the current employment situation, business goals and the projected path, bring together a workforce plan that can plug these gaps by considering the listed points:

· What do you need to do to reach these goals?

· Do you need more employees?

· What type of training will your current staff need?

· Can you conduct this training in-house, or do you need people to receive more formal training using, where possible, Cumbrian training providers?

· What can other local agencies provide in terms of funding, IT, technology facilities etc?

Of course, there are many more things that you can do to plan for your workforce of the future, but these will provide you with a solid foundation. One last word of caution, remember to be flexible. Plans change, and your workforce plan needs to flex as the world changes around you."