Skills gaps in finance and growth identified in MentorsWork report.
Productivity and business development is being curtailed across many small and medium-sized enterprises, due to emerging skill gaps.
This is according to a new report compiled by MentorsWork, a collaborative venture of Skillnet Ireland and the Small Firms Association, whose findings also show that many SMEs are also struggling to access finance and financial supports.
“It is critical that owner-managers of small businesses have up-to-date organisational and financial skills, including financial literacy, financial analysis skills and understanding risk”
615 owners and managers completed the MentorsWork competence assessment survey that forms the basis of the current programme insights on finance and growth skills needs.
Robust financial planning
Sven Spollen-Behrens, director of the Small Firms Association
While innovation and technological advances are critical in delivering increased productivity, SMEs crucially must have robust financial planning, Sven Spollen-Behrens, director of the Small Firms Association (SFA), says.
“It is critical that owner-managers of small businesses have up-to-date organisational and financial skills, including financial literacy, financial analysis skills and understanding risk, in order to implement the necessary changes to adapt to an ever-evolving business landscape”.
MentorsWork, an award-winning joint initiative from Skillnet Ireland and the Small Firms Association (SFA), is designed for business owners and managers throughout Ireland, to help boost SME productivity by providing mentoring and business development tools.
The report determines several predictors of financial competency, with higher employee numbers, and older businesses (10+ years) more positively correlated with stronger financial literacy skills and higher capacity to execute effective strategic planning.
Younger SME businesses (10 years or less), score lower than older counterparts in the report’s metrics in measuring financial literacy, financial analysis and understanding risk. In addition, these businesses have more difficulty with routes to accessing financing and financial supports, as do businesses with 9 employees or fewer.
Financial planning competencies by sector
ICT and services are the sectors particularly challenged when it comes to financing needs, and the services industry is associated with lower levels of financial literacy in the report.
By sector, retail and hospitality, food and drink, and manufacturing report above average competency around financial planning. SMEs involved in ICT are average, while services and all others rated below average.
Manufacturing, ICT, retail, hospitality and food and drink performed best when it came to assessing finances and risk.
The MentorsWork programme includes an in-depth competency assessment on SMEs’ main productivity drivers, one of which is finance and growth skills, Skillnet Ireland Strategy Officer, Mark Jordan says.
“Programmes are developed in response to specific business needs, which we regularly measure and assess. Our latest data from recent MentorsWork participants has helped us refine supports in the areas of finance and business growth for specific types of business.
“For example, the new 2022 MentorsWork programme, launched last month, includes a more intensive programme for faster growing businesses, as well as additional new support in progressing a business plan for former scheme participants.”
The success rate of businesses completing the 12-week MentorsWork programme is impressive to date, the Skillnet Ireland Strategy Officer says.
“The mentoring and business planning programme supports SMEs with up to 250 employees from a diverse range of sectors. SMEs play an important role in driving Ireland’s economic revival. The programme helps companies to focus on key talent needs which are essential to shape and deliver on a sustainable business plan,” Jordan says.
Launched in 2020, MentorsWork has helped over 1,000 businesses around Ireland. The next round of 1,000 programme places is now open to SME owners and leadership teams across all industry. Any private sector business with up to 250 employees can participate in the 12-week subsidised mentoring programme, addressing core competencies with a one-to-one mentor.
Marks for marketing
Competency in business marketing is highest in the retail and hospitality and food and drink sectors, and for larger companies too. Younger companies (0-10 years) rate their marketing competency higher than more established businesses.
Older and larger businesses rate their competence in winning and competing for new business more highly, with retail and hospitality out-pacing services, manufacturing and ICT businesses.
The motivation for growth in the retail and hospitality industry is lower than average, however, it seems. The same is true for younger and smaller businesses.
Businesses more than 21 years old and those with 10 employees or more are associated with higher strategic planning scores. The manufacturing, food and drink, and ICT sectors are rated more highly than average for strategic planning.
A strategy focus is something significant that an independent mentor can bring to a business, Sven Spollen-Behrens of the Small Firms Association (SFA), says.
“Small business owners are pulled in all directions, and will often manage day-to-day operations and sales and marketing too, to keep business ticking over. Where MentorsWork helps is in directing attention to future business planning, such as what does expansion look like, how will it be funded, and where will it come from?”
One-to-one mentoring sessions, peer-focused workshops, expert-led masterclasses and an online learning platform are all part of the scheme to support business productivity.
MentorsWork supports businesses in sectors including services and manufacturing for domestic and international markets. Lifestyle, hair and beauty, childcare, technology, retail, marketing services, and recruitment are largely represented in the 12-week programme too.
SME owners and managers can apply now to participate at https://mentorswork.ie/