Skills Shortages: Problems Continue
New reports from the CBI / Pertemps Network Group and SD Worx into the issue of skills shortages have found that the problem is continuing to adversely impact UK businesses.
As we reported in a previous article, recent research conducted by Reed Talent Solutions revealed that 77% of employers had encountered skills shortages in terms of a gap between those skills held by their existing staff, and that required to achieve their business objectives. Furthermore, 70% of employers reported that recruitment had become more difficult, with 60% stating that acquiring new staff with the right skills set (i.e. skills shortages) as the main cause.
Now, the new annual Employment Trends Survey published by the CBI / Pertemps Network Group reports that 71% of employers have encountered labour shortages, with 77% of respondents to the survey expressing concerns about skills shortages and their impact upon their businesses. Moreover, 82% of employers stated that they believe that such shortages would still be around 5 years down the line.
The survey also found that in terms of addressing the skills shortages problem, 69% of employers were investing in upgrading the skills of their existing employees, whilst 60% were investing in new technology / automation to boost productivity and reduce labour dependency.
Critics, nevertheless, would point out that UK businesses should have started investing in training, technology, and automation many years ago. As we have highlighted in several recent articles, the UK has a long standing problem in terms of poor productivity and skills shortages which go back many years, a problem that was masked for a very long time by the availability of EU workers under the free movement rules. The fact that UK businesses are now finally investing out of necessity, will it is to be hoped finally address the issues
The CBI / Pertemps Network Group survey also found that:-
- 38% of respondents reported that labour / skills shortages had adversely impacted their ability to expand
- 22% of employers stated that labour / skills shortages meant that they were unable to invest in some parts of their business
- 12% of businesses stated that they had actually contracted as a direct result of labour / skills shortages
- 65% of respondents reported that they had invested in "leadership and management capabilities" as a means of retaining their existing staff
- 60% of employers stated that they had increased "base pay" in order to "attract and retain" staff
Furthermore, in another new survey, SD Worx report that 46% of UK businesses have been unable to recruit the staff they require to complete work, with 41% of employees stating that they have insufficient time to acquire the training they require.
Commenting upon the findings of their Employment Trends Survey, the Chief Executive of CBI, Rain Newton-Smith, stated: "It is crystal clear that while labour shortages are making it more important than ever to focus on productivity, they are also making it harder to invest and grow, stifling the economic transformation needed to deliver sustainable growth."
Newton-Smith added: "More often and more effectively adopting technology will be key to improving living standards. In doing so, we’ll need to help employees add to their skills. That’s why government needs to go further with their skills reforms and turn the Apprenticeship Levy into a Skills Challenge Fund, unlocking firms to invest more capital in improving the skills of more workers than apprenticeships alone."
Numbers Starting Apprenticeships Falls
As we highlighted in a recent article on the calls for reform of the apprenticeship levy, the numbers starting apprenticeships between August 2022 and April 2023 dropped by 4.6% compared to the same period during the previous year.
Now, the NFER’s Research Director on education to employment and social mobility, Dr Lisa Morrison Coulthard, has added to the calls for reform of the apprenticeship levy. She argues that: "The continued decline in apprenticeship starts amongst young people and people from disadvantaged backgrounds of all ages is a concerning indicator that barriers, including low wages and minimum grade entry requirements, persist....The Government should commission a review of the long-term decline in 16-19-year-old apprenticeship starts, and the sustained under-representation of apprenticeship starts from disadvantaged young people. In particular, the Apprenticeship Levy should be redesigned to ringfence funding for 16–18-year-old apprentices."
