19 March 2025
At the West of England Institute of Technology we’re committed to bridging the gap between academic institutions and the evolving needs of the workforce, the “SME Skills Horizon: 2025” (SME Skills Horizon 2025) report offers a compelling snapshot of the current landscape for small and medium-sized enterprises (SMEs) in England. The report highlights a notable trend: while SMEs experienced an average growth of 27% in 2024, there remains a persistent challenge in recruiting employees with the right skills, particularly at the entry level, which accounts for 32% of the skills gap.
This contrast of growth and skills shortages underscores the critical role that educational institutions must play in preparing students for the realities of the modern workforce. The report indicates that fewer SMEs are offering technical education options within the workplace, even though a significant majority (78%) recognise the benefits of such programs. This presents an opportunity for educators to step in and collaborate more closely with employers to design and support curriculum that aligns with industry needs.
One area of particular interest is the integration of artificial intelligence (AI) into business operations. The report suggests that advancements in AI are seen as opportunities to support business growth. However, to fully capitalise on this potential, there is a pressing need for a workforce proficient in AI-related skills. Educational institutions can address this by developing specialised programs and courses that equip students with both the technical and soft skills required to thrive in AI-driven environments. An example from the West of England Institute of Technology where learners on the Higher Technical Qualifications (HTQ’s) in computing, are involved with creating optimal factory schedules to minimise wasted time and improve efficiency, this aligns well with the challenges faced in industry and means students can apply these learnt skills to benefit their employer.
Moreover, the report highlights a decline in concerns related to staff retention, with only 27% of SMEs citing it as a top concern, down from 40% in previous years. This shift suggests that while retaining talent has become less of an issue, attracting new talent with the appropriate skill set remains a significant hurdle. Collaborative approaches to how education and industry work together is needed now more than ever. The Department of Education Institutes of Technology’s, now in their 5th year of operation, are key to making these connections and are already showing great results with innovative ways of working with employers. By working together, we can develop and implement strategies that not only address the current skills gaps but also anticipate the future needs of our evolving economy. Through such collaborations, we can ensure that our students are not only prepared to enter the workforce but are also equipped to drive innovation and growth across the sectors in our region.
