Difficulty finding talent directly impacts business finances

Almost a quarter of job vacancies last year were caused by the widening skills crisis across the UK, while 14 per cent of employers report skills gaps in their existing workforce, a report by the UK Commission for Employment and Skills (UKCES) has found.

UK employers had 928,000 vacancies in 2015, 209,000 (22 per cent) of which were down to a skills shortage. In 2011, there were just 91,000 so-called skills shortage vacancies.

While 19 per cent of employers reported having at least one unfilled vacancy, up from 15 per cent in 2013, six per cent of employers said they had at least one skills shortage vacancy, up from four per cent in 2013.

The UKCES report, Employer Skills Survey 2015, found that roles with particular difficulties recruiting included machine operatives, with 33 per cent of vacancies defined as being affected by a skills shortage, up from 25 per cent in 2013. Skilled trades continued to have the highest density of skill-shortage vacancies (43 per cent).

The construction sector was also found to be also significantly affected, with employers struggling to fill one in three vacancies, up from one in four in 2013, while the financial services sector has seen the sharpest rise in skills shortages, rising from ten per cent in 2013 to 21 per cent in 2015.

More than two-thirds of employers with difficulty recruiting reported a direct financial impact through either loss of business to competitors, increased operating costs, and/or having to outsource work.

A number of attributes were reported to be lacking in applicants for skills shortage vacancies including: time management (47 per cent), customer-handling skills (39 per cent) and having specialist skills or knowledge (64 per cent).

The study found 14 per cent of employers reported skills gaps in their existing workforce, stating approximately 1.4 million staff lacked proficiency in their current role – around five per cent of the UK workforce.

The most common skill lacking was the ability to manage their own time and prioritise tasks (59 per cent). A further 48 per cent were said to be lacking specialist skills or knowledge.

Dr Adam Marshall, executive director of policy at the British Chambers of Commerce (BCC), said: “It is clear that a shortage of skills is preventing businesses from reaching their full potential.

“The government needs to focus on the quality of apprenticeships, not the quantity – which will not help the next generation progress,” he added.

“Now is also not the time to introduce an Immigrant Skills Charge, as recently proposed by the Migration Advisory Committee. Businesses are currently experiencing acute skills shortages and we shouldn’t further handicap them by increasing the cost of recruiting the talent they need.” 

Neil Carberry, director for employment and skills policy at the Confederation of British Industry, also raised concerns about the apprenticeship levy and the effect on finding skilled staff.

“With the demand for skills on the rise, if the levy is going to work it must have the flexibility for firms to continue to train according to business and industry need,” he said.