New agency ‘needed to tackle skills shortages’

The government is facing calls from business leaders for the creation of an independent agency with statutory powers to tackle the UK's current and future skills shortage.

David Sapsted

1 August 2022

At a time when the number of vacancies in Britain is greater than the total of people registered as unemployed, the Institute of Directors (IoD) says the government should create a Shortage Occupations Agency to determine what should be done to overcome the "chronic and systemic" skills shortages.

The IoD report coincides with a survey from Broadbean Technology - the world’s largest network of job boards - showing an unprecedented decline over the past year in the number of UK applicants for skilled, white collar vacancies.

Earlier this month, the British Chambers of Commerce called on the government to expand the Shortage Occupation List, which makes it easier for organisations to hire workers from abroad for specific types of jobs.

Now, the IoD wants to see the creation of an agency "with a statutory remit to systematically advise on current and future skills shortages areas for the UK economy".

The government, says the report, should use the tax system to incentivise business training to address skills requirements identified by the proposed Shortage Occupations Agency, adds the report.

Alexandra Hall-Chen, senior policy adviser at the IoD, said: “Our own polling suggests skills and training are seen as crucial to firms’ future growth plans and are the single most important issue that will affect future productivity. Yet levels of workplace training are low by international standards and, if anything, are falling.

“Business leaders are clear that responsibility for fixing skills shortages lies jointly between government and industry. We are therefore calling on government to be clearer about what its priorities are, through the establishment of an independent Shortage Occupations Agency, and to be bolder in what it will do to achieve change.

"By using the taxation system to incentivise organisations that train up their staff to meet national skills shortage needs, the government can help to address this long-standing issue that negatively affects British business.”

Meanwhile, the Broadbean survey showed that the number of applications for white collar jobs recorded a 28% decline over the past year, with the figure increasing to 35% between May-June this year.

Broadbean's analysis revealed significant declines in applications across IT, pharmaceuticals and accounting. "The IT arena saw application numbers fall by 29% between May and June of this year, while figures in pharmaceuticals and accounting were down 41% and 33% respectively," the survey found.

But Alex Fourlis, managing director at Broadbean Technology, pointed out that the UK "skills crisis" was also resulting in shortages that were "impacting almost every business, across every sector".

He added: “While there is an undeniable shortage of blue-collar workers in fields such as retail and logistics, the dearth of workers in highly skilled sectors is also of concern for the UK’s economic bounce back, with candidates for these positions not only harder to source, but also requiring lengthier training programmes to develop.

“For employers and recruiters, now is a critical time. Businesses need to rebuild and nurture dwindling talent pools, utilise innovative technology to streamline hiring and maximise partnerships with external talent suppliers in order to find the undiscovered talent that is so desperately needed.

"Difficult times are ahead for the UK economy, and immediate action needs to be taken to establish a recruitment market that can best support the country’s economic bounce-back.”

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