Tens of thousands of firms across Scotland are being forced to reduce their opening hours or slash services thanks to dire staff shortages which are crippling the economy.
According to shocking new research, one in three small businesses is now closing early, shutting completely on certain days or scaling back their operations because they simply cannot recruit enough workers to operate fully.
Business owners are frustrated they are losing trade worth millions of pounds, not through lack of demand, but through a lack of employees.
The problem is particularly severe in rural areas, especially the Highlands and Islands, where a shrinking population means firms struggle to find enough working-age staff to fill vacancies.
But across the country business owners are also complaining that, even where staff are available, many lack the basic skills and commitment to do the required jobs.
The shortages are all the more concerning given that the unemployment rate in Scotland currently stands at 3.7 per cent – with more than 90,000 Scots out of work.
Last night business leaders called for urgent action to support a key sector of the economy, while the revelations also sparked a fierce political row.
Guy Hinks, chair of the Federation of Small Businesses Scotland (FSB) – which carried out the research – warned that economic growth was being stifled.
He said: ‘When you are running a small business, you want to be doing just that, running the business – not tearing your hair out trying to find staff. It’s hugely frustrating, but it’s a situation which tens of thousands of small Scottish firms find themselves in.
‘The scale of the issue means it is not just a problem for the individual businesses themselves, it is a drag on the national economy.
‘Many of these will be successful firms with ambitions to grow, perhaps to take on extra staff, but instead are being forced to curtail their operations due to circumstances beyond their control.’
Early closing: Group’s McKay’s Hotel in Pitlochry needs staff
Struggle: Hotels boss Richard Drummond
Small businesses are the backbone of the Scottish economy, with around 350,000 separate firms employing over 900,000 people and turning over £93bn annually.
To understand the pressures firms are facing, the FSB has just completed a comprehensive ‘state of the nation’ survey of its members.
With full results due to be published later this month, the FSB has shared with the Scottish Mail on Sunday its alarming findings on staff shortages – and the devastating impact on companies up and down the country.
The survey reveals shortages have forced one in three (32.4 per cent) small businesses to make changes to their daily operations over the last year.
Overall, almost one in five (18 per cent) cut services, while one in 14 (7.2 per cent) cut their opening hours.
A similar number introduced unwanted changes to cover shortages – such as owners or senior managers being diverted from their normal role running the business to helping carry out day-to-day tasks.
In rural and remote areas, particularly the Highlands and Islands, shortages are largely driven by demographic factors, as the overall population is falling while an ever greater proportion of people are retired.
More than two fifths of small businesses in the Highlands (43.5 per cent) reported a lack of available local workers being an issue.
According to the FSB, firms in every area of the country reported shortages of workers with technical and job-specific skills.
Worryingly, they also said many businesses were concerned that staff lacked basic skills, such as communication, problem-solving and teamwork.
Construction and hospitality were the sectors most badly affected.
The Tories said businesses were being let down by the governments at both Westminster and Holyrood.
Damage: Tory Business spokesman Murdo Fraser
The party’s business, economy, tourism and culture spokesman Murdo Fraser said: ‘This is clear evidence of the damage being done by the anti-business policies of both Labour and the SNP, and by the failure to invest in training and our homegrown workforce.
‘The lack of suitably skilled workers, when record numbers of Scots are economically inactive, is a particularly damning indictment of the nationalists’ failings in education.
‘Their broken promises on rural infrastructure, transport and housing have only made matters worse.’
Figures released earlier this year show the overall unemployment rate for people aged 16 years and over in Scotland was 3.7 per cent – rising to 11.5 per cent among people aged 16-24.
In total, around 91,500 adults over 16 and over are unemployed, with just over a quarter being unemployed for 12 months or more.
Last night the Scottish Government blamed Westminster for blocking its calls for re-gional visas, as well as for introducing visa restrictions on overseas workers and in-creasing employers’ National Insurance contributions.
Deputy First Minister Kate Forbes said: ‘We have repeatedly called on the UK Govern-ment to work with us to develop tailored migration routes, including a Rural Visa Pilot, to grow Scotland’s economy and strengthen our public services.
‘Recent changes to the immigration system, including an increase to the skills and sal-ary threshold for the Skilled Worker Visa, have created additional barriers for business-es which rely on international talent to fill vital job roles.
‘We continue to work with businesses to drive growth across the economy and call on the UK Government to reverse its damaging decision to raise employers’ National In-surance contributions.’
We can’t get people we need, says hotel boss
As director of a Highland hospitality firm, there is nothing more frustrating for Richard Drummond than having to close early.
Yet even in the peak visitor season, when tourist numbers are at their highest, staff shortages mean he has no other option.
‘We want to trade late into the evening,’ he said. ‘But now, even at the weekends and during the summer, we have no choice operationally but to shut earlier. We simply haven’t got enough staff.’
Mr Drummond helps run Turas Hotels which operates venues – including hotels, restaurants and bars, plus a distillery and brewery – in Pitlochry, Aviemore, Boat of Garten, Inverness and Ullapool.
Speaking to the Scottish Mail on Sunday from the McKays Hotel in Pitlochry – where a lack of restaurant staff meant he was helping serve lunch to customers – he explained the pressures he faces.
He said: ‘I’m so proud of the businesses we’ve created: they’re great holiday destinations that ooze Scottishness.
‘And the Highlands are a world class destination that attract people from every corner of the globe.
‘At peak times, the demand from visitors is huge. But trying to service that demand has become a real struggle.
‘Trying to get staff and entice people into our industry has become more and more demanding.’
Mr Drummond said Brexit and changes to visa regulations had made it far harder to attract workers from overseas – while the demographics of the Highlands mean he struggles to find staff locally.
The short-term and seasonal nature of many hospitality jobs, he said, also made attracting workers difficult – as did the lack of affordable accommodation in many parts of the Highlands.
He said: ‘Tourism is one of the most important parts of the Scottish economy, but because it’s fragmented around the country and often involves individuals or small-scale operators, it’s simply not taken seriously enough by government. As a result, not enough is being done to support the hospitality industry, especially in rural areas.’
