UK skills shortages reaching ‘critical levels’

Employers are finding it increasingly difficult to find workers with the correct skillsets and qualifications. Meanwhile, both vacancies and employment levels remain high.

Apprentice learning new skills: Skills shortage in the UK
The shortage of skilled workers in the UK is approaching a “critical level” with a majority of companies reporting problems in recruiting suitably qualified staff, according to a major survey published by the British Chambers of Commerce (BCC).

Skills shortage in the UK

Research among more than 7,000 firms by the BCC found that a record 71 per cent of companies in the powerhouse services sector said they were finding it difficult to hire workers with the right qualifications.The BCC’s Quarterly Economic Survey also found that three-quarters of manufacturing firms seeking staff were encountering problems attracting workers with the right skillset.Official figures in November showed a steep rise in the number of workers from other EU countries leaving Britain because of uncertainty over their status once the UK leaves the bloc.

High employment and the Brexit factor

But the BCC suggested that the Brexit vote is only one part of a problem being exacerbated by the fact the nation’s employment levels are at historically high levels.Adam Marshall, BCC director-general, said, “While there are many business bright spots across the UK, the evidence from the biggest private business survey in the country shows that growth and confidence remain subdued overall as we enter a new year.“Labour and skills shortages are set to be the biggest potential drag anchor on business in 2018, since ultimately it is people that make businesses work.“Business itself must do more, by training and investing wherever possible in people, but government must also give firms the confidence to put their livelihoods on the line and go for growth.“This must be the year employers act rather than just complain on skills, and the year government delivers clarity, leadership and investment in people and infrastructure. Kick-starting growth, and boosting wages and prosperity for all, depends on this.”
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Job vacancies on the rise

The BCC survey was published after a study from Totaljobs showed a record number of jobs were posted on its website in the first week of the year: 54,000 vacancies, compared to 45,000 in the same period last year. The number of vacancies in financial services increased by ten per cent, while there were about 1,000 extra engineering jobs on offer.David Clift, a spokesman for Totaljobs, said, “Despite political and economic uncertainty, the UK job market thrived in 2017, with unemployment reaching its lowest level in 42 years.“Our data suggests that this momentum is set to continue into 2018, with 20 per cent more jobs available now than a year ago. The good news for people looking to make their next career move is that there is a wide choice of vacancies available, right across the UK.”

Broader economic picture

On the wider economic prospects, the BCC survey reflected a subdued picture, with almost all service indicators below their pre-referendum levels and the strong performance of manufacturers easing slightly in the final quarter of 2017.Suren Thiru, BCC head of economics, said, “These results suggest that GDP growth remained underwhelming in the fourth quarter of 2017. Services sector activity remains subdued with most indicators still below their pre-EU referendum levels. Consumer-facing firms in particular are facing an uphill struggle due to negative real wage growth, which is continuing to stifle consumer spending. That said, the sector is still likely to have been the main determinant of growth in the fourth quarter.“Following a strong showing for much of 2017, the manufacturing sector did come off the boil a little in the last quarter, with most of the key indicators weakening in the quarter.“The latest results also confirm that inflation remains a concern with a significant spike in inflation expectations in the quarter. While inflation is likely to peak in the coming months it is likely to remain stubbornly above the Bank of England’s two per cent inflation target for a prolonged period, maintaining the cost pressures on both consumers and businesses.” 
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