The Green Skills Gap Is Coming for SMEs, Ready or Not
If you work in or run a small business, you’ve probably heard a lot about net-zero, sustainability, green jobs, and the coming transition.
But here’s the part no one is really saying out loud:
The green transition isn’t just for energy companies, construction firms or big corporates.
It’s coming for every business, including SMEs.
And according to the latest CIPD report, it’s going to reshape jobs, skills and workforce capability across the UK far more than most people think.
This isn’t a future problem.
It’s already happening.
6.3 million UK workers will see their roles change because of the green transition
The report estimates that around one in five workers will need to adapt as the UK moves towards net zero.
Of those:
10% will need upskilling
Another 10% will need full retraining
That’s not a niche shift. It’s one of the biggest labour market transitions since the industrial revolution.
And unlike the 1980s, this isn’t about industries collapsing.
It’s about nearly every sector adapting.
It’s not just “green jobs”. It’s green skills.
One of the biggest misconceptions is that “green jobs” means wind turbine engineers or environmental scientists.
But the shift is much broader.
The Climate Change Committee’s analysis shows that:
12% of jobs are in growing, transition-aligned sectors
7% are in sectors that need to adapt
Less than 1% are in sectors expected to decline
Most jobs won’t disappear — they’ll change.
A project manager will need sustainability literacy.
A customer service lead will need to understand green standards.
A maintenance team may need skills in low-carbon technologies.
A warehouse team may need new processes for energy efficiency.
An HR team will need to support reskilling for green capability.
This is a skills transition, not a job replacement event.
And SME-heavy regions will feel the biggest pressure
The report highlights that some of the UK’s most SME-dense regions including the East Midlands, West Midlands, and Yorkshire & the Humber also have:
the highest share of roles needing reskilling, and
the highest potential for green job growth
That’s a double hit:
Roles will change faster
Opportunity will grow, but only for those with the right skills
If your business is in these regions, the shift isn’t theoretical. It’s local, immediate and incredibly relevant.
Green jobs pay better, but they require higher skills
The London School of Economics found that workers in “green” roles earn an average 8% wage premium.
These jobs tend to require:
higher skill levels
analytical capability
stronger decision-making
stronger interpersonal skills
Meanwhile, “brown jobs” in high-emissions industries are more physical, more manual, and often located in areas with limited training access.
The risk?
Without reskilling support, existing inequalities will deepen.
This matters for SMEs who already struggle to attract and retain talent.
When the green transition accelerates, talent will flow towards employers who offer:
learning
progression
capability-building
relevance
security
The businesses that don’t will struggle.
What does all of this mean for SMEs?
Here’s the simple version:
Whether you employ 5 people or 50, your team will need:
1. Green awareness
Understanding your sector’s impact, risks and new expectations.
2. Green literacy
Knowing how sustainability links to job tasks, decisions and performance.
3. Green capability
Skills like:
analysing data
improving processes
problem-solving
adapting systems
understanding energy use
embedding sustainable practices into everyday work
These aren’t specialist skills.
They’re core skills, but with a sustainability lens.
Where SMEs often fall behind
The report is blunt about this:
SMEs are less likely to invest in training, particularly for mid-career and older workers.
Adult participation in learning has fallen dramatically, with only 1.8 million adults in further education or skills training
And training participation drops with age, meaning the employees who need to adapt the most… often train the least.
That’s a dangerous combination in a rapidly changing economy.
The good news? SMEs can adapt faster than big organisations
You don’t need a sustainability department.
You don’t need a net-zero task force.
You don’t need a corporate strategy written in 300-point bullet points.
What you do need is:
✔ Clear, simple processes
✔ People who can think, solve, improve and adapt
✔ A way to develop these skills inside the flow of everyday work
✔ A training approach that’s short, relevant and tied to performance
✔ A culture where learning isn’t “extra”, it’s expected
And that is exactly where SMEs have an advantage: speed, closeness, and culture.
You can embed capability quickly, through simple changes in onboarding, training and everyday practice.
Wondering where to start?
If you want to know how well your current onboarding or training supports problem-solving, adaptability, decision-making and learning, the green transition essentials, start here:
👉 Take the free Learning Impact Scorecard
It takes under 2 minutes and shows your strengths, gaps, and opportunities to build greener, smarter, future-ready skills across your team.
Small businesses don’t need bigger systems.
They need better capability.
And the green transition is the perfect moment to start building it