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How smaller firms can afford to close the digital skills gap

The digitalisation of the workplace has a defining business trend in recent years, but smaller firms are struggling to reap the rewards because of shortage of digital skills. More training is the answer, but how can these firms afford it?

The transition to digital has been rapid, with the process accelerated by the impact of the pandemic. From social media marketing and e-commerce capability to workplace digital technology, digitalisation has fundamentally changed the business landscape, but a significant number of smaller firms are getting left behind and missing out on key benefits.

According to State of Small Business Britain 2021 report, almost one fifth of SMEs lack basic digital skills, while a similar amount can’t count on the advanced digital skills that they need. At the same time, Office for National Statistics data show that almost two thirds of young people believe that they lack basic digital skills.

Why there is a small business digital skills shortage

One of the main reasons behind the shortage in small business digital skills is the speed at which the transformation is taking place. Some firms are simply struggling to keep up. Another is the widespread switch to home-working, a change that put digital training out of reach for many, with existing skills quickly becoming out of date.

Notably, according to new research from Maybe, there is clear evidence of demand for digital skills training, with almost two thirds of businesses interested in accessing support and training to help them grow, almost 60% wanting support with digital skills for social media and over 45% looking for help with digital skills for e-commerce and web.

Digital skills training costs and how alternative finance can help

The desire for digital skills training clearly exists, but it comes with a considerable price tag and this cost is a major barrier for smaller firms that are already facing unprecedented headwinds and extreme pressure on cashflow.

Against this backdrop, integral to overcoming this challenge and getting the training that can help firms benefit from digitalisation is access to finance and it is here that alternative finance can help.

In the wake of prolonged caution from traditional lenders, which is an issue that has returned during the pandemic and amid challenging market conditions in 2022, services such as invoice finance, asset finance and peer-to-peer lending are proving a vital source of capital for small businesses, both for maintaining cashflow and for essential investment.

These facilities, which offer a more easily accessible and personalised approach to lending, are helping small businesses survive and target recovery and regrowth. Furthermore, alternative lending is playing a prominent role in the government’s headline emergency support scheme, the Recovery Loan Scheme (open until the end of June 2022). Invoice finance and asset finance between £1,000 and £10 million per business are available under the initiative. This profile is helping cement the reputation of alternative finance in the business sector.

Upgrading digital skills and smaller firm finance options

Closing the digital skills gap is critical for smaller firm but doing so is a significant challenge in a marketplace impacted by a range of negative factors. In order to afford the training, access to finance is critical. As such, it is vital that businesses are aware of all the finance options available to them, including the services of alternative lenders.

To find out more about A&T Business Associates services, contact Steve Bowles on 01903 602211 or steve.bowles@atbusinessassociates.co.uk.

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