Nathan Bostock comment: Help SMEs hire new talent to fix UK '˜brain drain'

SMEs have the best roles the market has to offer our brightest young people, says Santander UK CEO Nathan Bostock. Picture: Contributed

In many areas of the country, promising businesses are struggling to recruit the talented people they so desperately need.

The result is a vicious circle that creates an ever-more unbalanced economy. Outside of the biggest urban areas, even the best businesses face recruitment challenges that stunt their growth, damaging the local economy and leaving young people even more convinced they need to move away.

In our densely-populated towns, meanwhile, housing shortages and pressure on public infrastructure from transport to health can mean a poor quality of life for long-term residents and incomers, alike.

How, then, to begin creating more balance? One crucial task is to persuade more young people that exciting opportunities can be found in the small and medium-sized enterprises (SMEs) thriving in their local communities. They need to know that global corporations in major cities do not have a monopoly on the best prospects – and they may not need to travel far from where they grew up or were educated to find rewarding and fulfilling careers.

Right now, most young people do not want to work for SMEs. Santander’s research shows 52 per cent of Scottish students on the verge of leaving full-time education want to work for a large firm, while 45 per cent aspire to work in the public sector. They believe SMEs don’t offer job security, can’t pay decent salaries and offer no career progression.

Yet, nothing could be further from the truth. SMEs employ more people than large companies, are growing more quickly and create more jobs, at entry level and in senior roles. The Federation of Small Businesses says SMEs account for 99 per cent of all firms in the UK, employing more than 16 million people – that’s 60 per cent of all private-sector employment. European Union research shows SMEs create 85 per cent of all new jobs in EU economies.

It is crucial that we start making this case more loudly. Santander’s own experience of connecting SMEs with students – including a project at Heriot-Watt University – suggests the potential is huge. We’ve worked with a series of SMEs who take on interns from local colleges and universities, and very often end up offering them permanent employment on graduation.

It’s a win-win situation. The SME gets extra capacity and a source of new ideas, both vital for growth, while students apply and develop their business knowledge in a real-life setting. And those interns who do accept full-time roles find they have more opportunities, access and responsibility than they could ever hope for in a large organisation.

This experience prompted Santander to set a target: we want 75 per cent of the student interns we place to achieve permanent employment in their host SME. That’s not an ambition based on some sort of idealistic notion about supporting the SME sector; rather, these are the best roles that the employment market has to offer our brightest young people – and the best people for the SMEs in need of new talent.

If we can begin to convince more young people that their future does not have to lie with a large corporation hundreds of miles from home or university, we can start to address the economic and societal problems we currently face. And why can’t SMEs achieve even greater prosperity by recruiting from a pipeline of fantastic talent?

It’s time to start reversing the brain drain. In the digital age, good businesses can be located anywhere, but to thrive they need access to the best people. SMEs across Scotland offer a bright future to the next generation, but we need greater efforts to get this message across.

Nathan Bostock, CEO Santander UK.