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Scottish Highlands businesses facing increased pressure

Low population densities, low unemployment, growing numbers of visitors and increasing competition between businesses are placing increasing strain on small businesses across the Highlands & Islands.

In August 2016 an FSB survey of Skye & Lochalsh-based businesses found that almost a third (31%) did not have enough staff to meet their businesses’ needs. In September 2017 an FSB survey of Scottish island-based businesses revealed that 37% were being held back by a shortage of suitably-skilled staff, and FSB members across the Highlands & Islands and from most sectors tell us that they struggle to find staff with the right skills and attitude to work that they need. How can one meet and surpass the demands and expectations of one’s existing customers and grow one’s business if one doesn’t have enough staff? 

It is a real problem now, but what of the future? In 2017 an FSB survey revealed that 41% of Highland employers have at least one EU worker on their books – its 45% for tourism businesses. If Brexit makes working in the Highlands less attractive financially and more difficult for EU citizens technically, and numbers drop, how are we going to make up the deficit? 

The National Records Office, Audit Scotland and Scottish Government’s chief economist are all forecasting a slight increase in the Highland population over the next 15 to 20 years, but the growth is going to be from people of pensionable age and due largely to inward migration. People of working age and children are in decline. 

Highland Council takes a more bullish line, predicting in December 2017 that school rolls in its 29 secondary schools will increase by 21% by 2034, and the five Inverness schools by 40%. Its forecasts are based on house-building programmes.

So while not all agree, on balance it would appear that Highland businesses are going to find it increasingly difficult to source the staff that they need to survive and thrive for decades to come. And whatever happens, we cannot afford to allow our standards to fall at a time of increased global competition and Brexit.

What can we do to improve the situation? 

We can attempt to automate, using technology to replace people, but we really need to do more to retain our young people and attract more young families in. This was the top priority for island-based businesses for the next 20 years in last September’s survey, and it applies throughout the region. It explains why breaking down the remoteness barrier is so critical. 

Amongst other things we need great road, rail, sea and air links to reduce distances; we need great digital to improve communications; and we need affordable houses of the right sizes and prices in the right places to house our workforce. We also need to ensure that everyone who moves to or visits the Highlands & Islands is made to feel very welcome indeed.