Skills shortages threaten growth

Dec 07 2004 by Brian Amble Print This Article

Severe skills shortages are threatening to derail growth in the British economy as demand for staff keeps on growing.

The latest Report on Jobs from the Recruitment and Employment Confederation (REC) and Deloitte and Touche showed that while demand for staff continued to be buoyant during November, candidate availability was again substantially lower than in the previous month.

The sharpest decline was reported for permanent staff, which fell for the thirteenth month running.

According to many recruitment consultancies, it is now increasingly difficult to fill certain vacancies, to the extent that the rate of growth of permanent staff placements and temporary staff billings actually eased compared to October.

As a result, starting rates of pay continued to rise strongly, although the rate of increase was less marked than in October.

Average salaries awarded to people placed in permanent jobs rose for the sixteenth month in a row, although the rate of increase was the least marked since April. Meanwhile, temps’ hourly pay rates rose at the second fastest rate since August 1998.

Brett Walsh, European Head of Human Capital at Deloitte, said that demand for staff had risen for the seventeenth consecutive month in November.

"The tightening job market, particularly at this time of year, makes it increasingly difficult for employers to attract suitably skilled candidates," he said.

"Retailers are likely to be particularly effected, with 20 per cent of firms reporting in Deloitte’s Annual Christmas Retail Survey that they will be unable to recruit the right staff to work over the Christmas period."

Gareth Osborne, Managing Director at REC, added that more efforts needed to be made to expand the pool of available labour.

"The employment market continues to be characterised by a tightening in supply with severe skills shortages emerging as one of the biggest threats to continuing growth in the economy.

"If the UK economy is to meet its predicted growth in the next few years, action needs to be taken quickly and purposefully to improve the employability of the workforce."