Skills Shortages Getting Worse. Training Key To Resolving
New research conducted by Wade Macdonald has found that skills shortages within the HR and finance sectors is getting worse, with 39% of all temporary hires having been recruitment to fill gaps arising out of the departure of permanent employees and the difficulties encountered in terms of skills shortages in replacing them.
Hiring Temps A Costly Solution
Addressing gaps left by skills shortages through the employment of temporary workers in the UK has become increasingly more costly, around 25% - 35% more compared to the cost of hiring permanent employees.
These increased costs can be attributed to several factors. Firstly, there is a growing demand for highly skilled temporary workers due to rapid technological advancements and market volatility. Businesses require specialised skills that can be brought in quickly and effectively without the long-term commitment of a permanent hire, which drives up temps wages.
Secondly, regulatory changes have impacted costs. The introduction of more stringent employment laws has led over the last 20 years to better working conditions for temps. This includes the Agency Workers Regulations 2010, under which agency workers are entitled to the same basic rights as permanent employees hired directly, once they have completed a qualifying period of 12 weeks in the same job
Additionally, there has been a reduction in the supply of labour from the European Union under Brexit, which had previously filled many lower-skilled temporary roles in the UK. This scarcity has pushed up wages as employers compete for available workers.
Furthermore, recruitment agencies are investing more in sourcing and managing high-quality temp workers to meet client needs and skills shortages, which includes increased training and administrative costs that are being passed on to employers.
Investment In Training A Better Long-Term Solution
Whilst hiring temps provides flexibility and can help bridge gaps caused by skills shortages, businesses must weigh these benefits against the higher costs. A better long term strategy would be to train up existing permanent staff or recruit permanent hires to be trained up. This would require investment in training, but is likely to be more cost-effective in the long run.
Moreover, by prioritizing internal talent development, organizations can tailor training to specific operational needs. Not only does this avoid problems with skills shortages, but ensures that employees' skills are fully aligned with company goals and processes.
Furthermore, this investment in human capital tends to foster a culture of loyalty and engagement. Employees who receive training and development opportunities often feel valued by their employer, which can lead to increased job satisfaction and lower turnover rates. Retaining knowledgeable staff not only reduces recruitment costs, but also ensures the preservation of institutional memory and expertise within the company.
Additionally, trained employees are likely to be more productive and innovative, contributing to the overall competitiveness and success of the business.
Finally, in a new study conducted by the British Standards Institution (BSI), involving a survey of 900 business leaders, 64% stated that they wanted to see the Government introduce tax breaks as an additional incentive for business to invest in training. The report concludes that: "Given high rates of economic inactivity amongst UK adults, it is notable that organizations are being encouraged to consider opportunities for retraining and returnships [for older people], which could help address this trend. The top area for policymakers to consider was incentivizing businesses to recruit older people or invest in retraining."
Employment Scams Have Surged By 259%
A new report published by Wix.com has found that the number of attempted employment related frauds reported increased by 259% between 2022-23. With over 30% of all adults having encountered such a scam, 20% of those specifically targeted in relation to a fake job offer sustained financial loss. The average loss was £2,300.00.
