More than four in five small businesses have reported that they are having major problems with recruitment, according to new research.

A survey, commissioned by the Gatsby charitable foundation, has revealed that nearly one million small businesses – 81% – in England have “major concerns” about finding staff.

The ability to recruit people with the right knowledge and skills for their needs is the second biggest overall issue for small businesses (43%) after rising costs (51%).

The research found that 55% of small business owners believe there is a lack of candidates with the right knowledge and skills.

On top of this, 86% of small businesses say they face barriers upskilling current employees, and only 38% of small business employees undertook training in the last year.

This is in contrast to business owners admitting that the top two motivators for their employees to perform are “a clear route for progression” (47%) and “opportunities to develop new knowledge and skills” (43%).

Releasing the research, Gatsby said it suggested that many small businesses were uncertain about how to engage with the education and skills landscape which could help to alleviate some of their recruitment and upskilling concerns.

Jenifer Burden, director of programmes at Gatsby, said: “Small businesses are the backbone of our economy and society but there’s no doubt they’re facing a tough year ahead.

“As our research shows, one of their major challenges is getting to grips with the education and skills landscape which has changed and can be complex to understand.”

Gatsby, a charitable foundation set up by Lord David Sainsbury to support and strengthen technical education, released the research to coincide with the launch of Education Landscape: A Guide for Employers.

This free, impartial resource is an overview of the education system in England as a whole and explains how employers can work with schools, colleges and universities, and the wider skills system, to benefit their business.

Jenifer added: “The Education Landscape: A Guide for Employers has been developed with major industry bodies to help businesses understand how they can get the most out of engaging with the education system – from shaping the skills being taught in their local area around their own business needs, to motivating and retaining current staff.”

Partners in the initiative include the CBI, the Federation of Small Business, British Chambers of Commerce and the Institute of Directors.