Lack of digital skills is influencing business turnover
Nearly four in ten of the UK’s small businesses lack basic digital skills, according to new research from Lloyds Bank UK.
The third annual Business Digital Index suggests that a lack of skills is having a negative effect on business, as those with the most skills were twice as likely to increase their turnover when compared to those with least skills.
Seven in ten of those questioned said they need to do more to develop their digital skills too and recognised the benefits that such an approach can bring.
The study identified five key skill areas that are needed to ensure a business can make the most of having an online presence – communicating, transacting, creating, problem solving and managing information.
Just 62% of small businesses possess all five skills according to the study, while that figure drops to 50% among sole traders.
It follows a report from 123 Reg that revealed that hundreds of thousands of micro-businesses do not have an online presence as a result of a lack of digital skills.
Some 15% said the issue prevents them from doing more business online, a figure that has roughly doubled from 12 months ago.
Just one in five small businesses used online methodology to trade overseas too, meaning the vast majority of firms are missing out on potential sales opportunities.
The report also highlighted that two thirds of businesses are trying to seek free or low-cost ways of mastering digital, rather than investing part of their budget into it.
A lack of digital skills is having a far-reaching effect on the UK economy too – a select committee suggested earlier this year that it might cost the UK around £63 billion annually in lost productivity and competiveness.
For firms that are facing difficulty, turnaround management might offer a solution, as there can be alterations to the running of a business that can change its fortunes.
The study also found strong correlation between the digital maturity of a business and a successful organisational structure, suggesting that investment in digital brings long-term benefits.
By Phil Smith