At Enginuity, our mission is simple but urgent – to close the skills gap in UK engineering and manufacturing so that employers have the right people, with the right skills, at the right time. To do that, we need more than just good intentions, we need clear insight into what businesses are facing on the ground and how the skills of their teams impact their success. That’s why we’ve launched our SME Snapshot, a new report designed to give policymakers, industry leaders, and employers a closer look at how small and medium-sized enterprises (SMEs) are navigating today’s shifting and complex economic and policy landscape.
Our first SME Snapshot captured insights from 135 SMEs across the UK, representing 6,500 employees and a combined turnover of £1.1 billion. Their feedback paints a unique picture, one of both challenges and resilience. For years, energy costs have dominated conversations about SME competitiveness. But our findings show a clear shift – high employment costs have now overtaken energy bills as the biggest driver of price pressures. This drives up costs and puts additional pressure on small businesses that are already struggling to stay competitive in a tight labour market. Despite these pressures, there is optimism. Many SMEs told us they remain confident about the year ahead. That optimism gets a boost from the Government’s new Industrial Strategy, which lays out a 10-year plan for growth. Encouragingly, awareness of the strategy is high among the SMEs we spoke to. This presents a real opportunity, if government and industry can work together to turn that vision into practical support, SMEs will be well-placed to thrive. Our recent roundtable with contributors to the report reinforced many of the themes emerging from the SME Snapshot, while also highlighting some worrying trends.
Employers shared the difficult choices they are facing amid weak market demand and rising employment costs, with many relying on natural attrition to manage headcount and expenses. The discussion underscored the urgent need for policymakers to understand the real-world pressures on SMEs and to act quickly to ensure these businesses can survive and continue to contribute to the UK’s economic growth. Enginuity has been a force in the engineering and manufacturing skills sector for 50 years, advocating for skills policy and solutions which close the skills gap and addressing the long-term sustainability of the SMEs which underpins the success of engineering and manufacturing growth in the UK.
We believe unlocking SME potential means replacing confusion with clarity, while building cultural esteem for vocational learning and ensuring long-term policy continuity. SMEs are ready to play their part in driving innovation, productivity, and growth, but to do so, they need strong institutional support and a skills framework that matches their ambition. Which is why we’re supporting them by amplifying SME voices, with data gathering, research, and insights; convening roundtables; showcasing issues. This evidence base allows us to drive meaningful change whether through policy recommendations, campaigns, or impact projects connected to reality, which solve real problems our sector is facing.
We hope this snapshot supports policymakers, industry bodies, and investors to better understand not just the pressures SMEs face, but also how to support the role they play in driving the UK’s next chapter of growth. Enginuity’s latest SME surveys and industry reports from the engineering and manufacturing sector at the link below. Help us represent the SME voice and join us in shaping the future of the industry. We’ll be launching our next survey in January, don’t miss your chance to take part: https://enginuity.org/insight-and-policy/sme-snapshot-report
Written by
Nicola Dolan, Head of Charity Operations at Enginuity. Nicola has 13 years of experience working in the skills and education landscape, working for both Enginuity and EAL, dedicating her career to driving meaningful change across the sector. Her mission is to turn vision into action, creating infrastructure and solutions to deliver sector-wide impact. Enginuity is a charity dedicated to closing the skills gaps in the UK’s engineering and manufacturing sector. Our mission is to empower businesses with the data, insights, and tools they need to thrive in our ever-evolving sector.