The £2bn Skills Problem Facing UK Companies

The intensification of the UK skills shortage is forcing employers to pay ‘well above market rate’ to attract employees – costing companies over £2billion a year.

According to the survey, conducted by The Open University, the 400 firms surveyed said the skills gap was making it difficult to secure talent, with 90{e85120a690986c003b28f85c6b4de0e089ccbb3c964777e8593c25d2056b3cf6} revealing that they had faced difficulties recruiting workers with the relevant skills in the last 12 months – The Guardian reports.

They found that those already in work were reluctant to move employers, while some EU nationals did not want to take a UK role because of the lack of clarity over immigration.

The duration of the hiring process was lengthened for three quarters of employers surveyed, who said it took them an average of one month and 24 days more than expected.

56{e85120a690986c003b28f85c6b4de0e089ccbb3c964777e8593c25d2056b3cf6} of businesses increased the salary on offer for a role, with the average increase £4,150 per hire for small and medium-sized firms and £5,575 per hire for larger organisations.The extra costs from recruitment fees and hiring temporary staff were “at least” £1.7billion.

Over half (53{e85120a690986c003b28f85c6b4de0e089ccbb3c964777e8593c25d2056b3cf6}) chose to recruit lower level staff to plug the skills gap, whilst the same amount invested in training to bring those new employees up to the required level. Those surveyed also cited uncertainty surrounding Brexit as exacerbating the skills gap.

A separate report from the Recruitment & Employment Confederation (REC), found that UK businesses are failing to hire the right person for two out of five roles – despite the costs incurred.

Investing in strategic recruitment – from the initial phase through to onboarding – could be one way to soften the financial impact.

REC’s Chief Executive, Kevin Green comments: “Getting recruitment right is even more important during a time of economic uncertainty because businesses need to ensure they’re not wasting money.”

He has also called on the government to be considerate of the growing skills shortage when creating their post-Brexit immigration policy.

“Decisions about the future immigration system are too important to be subject to political whim – we need [a] policy to be built on sound evidence and data,” he said. “Designing the post-Brexit immigration system is an enormous task and it cannot happen only in Whitehall. Recruiters are on the frontline of the labour market, and we are ready to work with the government to design and deliver policies that will help the country prosper.”