UK : A severe skills gap is costing UK businesses more than £2bn a year as companies struggle to find workers with the right attributes, according to inaugural research by The Open University.
The body reckons companies are having to shell out £2.2bn on higher salaries, recruitment costs and temporary staffing to fill vacancies amid a dearth of those with the skills they want.
Its Open University Business Barometer, which will now be released annually, said 90pc of employers had found it difficult to recruit workers with the required skills in the past 12 months and so had been forced to inflate salaries above the market rate to attract talent, costing at least £527m alone.
With the UK’s unemployment rate at its lowest for more than 40 years at 4.6pc in April according to data from the Office for National Statistics, the pool of talent companies have to pick from has become shallow which is forcing wages up. The uncertainty about immigration post-Brexit adds another layer of uncertainty about the future depth of the workforce.
The house building industry in the UK has been one which has particularly felt the pinch recently between the amount of workers it needs versus how many it has access to.
The Open University said these factors meant the recruitment process was taking longer for 75pc of employers – an average of one month and 24 days more than expected – thus pushing up recruitment fees and costs for temporary staff up to roughly £1.7bn.
More than half (56pc) of the 400 businesses surveyed had to increase the salary on offer for a role well above market rate to get the skills they required in the last 12 months, with the average increase amounting to a hefty £4,150 per hire for small- to medium-sized businesses and £5,575 per hire for larger organizations.
Companies are also increasingly having to hire less qualified people and train them on the job. The Open University said in the next year, the number of organizations in England offering apprenticeships was expected to nearly double from 31pc to 59pc, thanks in part to the Government’s recently-introduced apprenticeship levy which is aimed at reducing the skills gap. In spite of this, 69pc of companies expected to struggle to hire people with the right skills in the next year. The findings of the report will be presented to MPs and Peers this month.
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