Shortage of skilled workers knocks red tape off top of business constraints league table - press release

Embargoed until 12 March 2008

For the first time this century, regulations and red tape have been replaced by workforce issues as the number one problem holding back privately held businesses. These are the findings of the latest International Business Report (IBR). 37 per cent of privately held businesses (PHBs) report the availability of a skilled workforce as a constraint on business development, up from 34 per cent in 2007. The number of businesses reporting regulations and red tape have dropped from 37 per cent to 31 per cent.

Alex MacBeath, Global leader - privately held business services, says: "Despite the exploding global population and more people are going on to further education than ever before, privately held businesses are still struggling to find the right people. The IBR results show that PHBs are working hard to become attractive employers, but these latest results suggest that recruitment is a growing problem. Add to that the fact that many business owners are facing succession planning issues because their children have very different aspirations than to follow in their parents' footsteps and you realise why people issues are at the top of the privately held business agenda."

The number of businesses reporting that their growth is being hindered by a shortage of long term finance, working capital and the increasing cost of finance have all increased this year as well. Shortage of long term finance as a constraint is up from 17 per cent to 20 per cent, shortage of working capital is up from 20 per cent to 24 per cent and the cost of finance is up from 20 per cent to 25 per cent.

Alex continues, "The increase in businesses reporting financial issues as constraints on growth is probably just the tip of the iceberg in terms of greater financial woes. The credit crunch is putting increasing pressure on all kinds of businesses now and I suspect that in 12 months' time the shortage of long term finance, working capital and the increasing cost of finance will be even bigger issues for privately held businesses.

Privately held businesses are identifying and beginning to address the key issues they face as they operate in an increasingly global marketplace. Together with the current state of the economy, it represents a challenging period in the short term for businesses. However, as they address these issues and meet the challenges, they will be increasingly well positioned to be successful in the very dynamic global environment."

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Further enquiries, please contact:

Christine Hobart
International communications manager
T +44 207 391 9548

Neil Bird
IBR project manager
T +44 (0)207 391 9516

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Notes to editors:

[Member firm name*] is a member firm within Grant Thornton International Ltd (Grant Thornton International). Grant Thornton International and the member firms are not a worldwide partnership. Services are delivered independently by the member firms.

About IBR:

Grant Thornton International started a major annual survey of the attitudes and expectations of small and medium-sized businesses in 1992 called the European Business Survey (EBS). In 2003 the research project was widened to an international perspective covering medium-sized businesses and renamed the International Business Owners Survey (IBOS).

In 2007, the survey’s name was changed from IBOS to the International Business Report (IBR). The IBR survey draws upon 16 years of trend data for original EBS participants and 6 years for original IBOS countries. The 16 year trend data is available for: France, Germany, Greece, Ireland, Italy, Netherlands, Spain, Sweden and the United Kingdom, while the 6 year trend data is available for Australia, Canada, Hong Kong, India, Japan, Mexico, Russia, Singapore, South Africa and the United States.

Grant Thornton International will donate US$5 to UNICEF for every completed IBR questionnaire. In 2008, this will result in a donation of over US$39,000.

The research was conducted by Experian Business Strategies Limited. To find out more about IBR and to obtain details of IBR reports and results please visit www.internationalbusinessreport.com.