Why low numeracy and literacy rates are hurting SMEs

Poor employee literacy and numeracy skills among workers are holding Australian businesses back, according to research released today.

A report by the Australian Industry Group surveyed 300 employers, with 93% saying low-level skills among workers is having a negative impact on their business.

The biggest issue for business is the poor completion of workplace documents, with 31.9% of small business employers and 48.6% of medium businesses citing this as a concern.

Coming in second for employer gripes is material wastage and errors, followed by time wasting.

Peter Strong, executive director of the Council of Small Business of Australia, told SmartCompany this morning “what the report is saying is very true”.  

“It’s very frustrating when you get someone in to work in your retail shop and their spelling is really bad,” he says.

However, Strong saysit is not necessarily the fault of workers, who he believes are not being given the level of education and skills needed to enter the workforce.

“We’ve been talking about this for a long time and we’re seeing things wax and wane depending on who’s in government but we’ve got to make sure when people leave school and education that people have the basic skills for work,” he says.

The lack of skills has a two-fold consequence, says Strong, with both the worker and the employer suffering.

The Ai Group report compared the impact on poor employee skills across small, medium and large businesses, finding the biggest impact occurs on medium-sized business.

This finding does not surprise Strong, who says that small businesses by nature are able to work closely with staff and give one-on-one support to their employees.

Big businesses have the funding and resources to offer extensive training but medium-sized businesses are left in the middle.

“Medium businesses by their nature have more employees, but still don’t have the scale to do the very intensive supporting of individuals (like big business),” Strong says.

The report correlates to international data into adult competencies that found 44% of Australians have literacy proficiency skills levels below the minimum to function effectively in the workplace and society. 

Ai Group chief executive Innes Willox said in a statement the survey result reflects a “deepening concern about the level of foundation skills in the workforce and a continuing drag on the nation’s productivity”.

“As Australia continues to evolve towards the digital economy, increasingly more sophisticated skills within the workforce are required,” he said.

“Occupations with highly-educated workers are expanding much more rapidly than other occupations. So the mastery of literacy and numeracy is increasingly more important to meet the challenges of this evolving economy.”