Shortage of skilled labour threatens recovery

Oct 08 2003 by Brian Amble Print This Article

No sooner do the first shoots of economic appear in the UK than the first signs of skills shortages appear with them. The record low rate of unemployment may be good news for the economy as a whole, but new figures suggest that it becoming a major problems for businesses.

Just days after the recruitment industry reported that the labour market in the UK was picking up and skills shortages were beginning to return, ‘the Business in Britain’ report by Lloyds TSB has found that more than four out of ten companies have had problems recruiting skilled staff this year.

Almost a quarter of the 2,000 businesses surveyed said that they also had difficulties finding unskilled workers.

A decade ago, the picture was very different. Then, fewer than one in five businesses faced recruitment difficulties.

Michael Riding of Lloyds TSB Corporate said that organisations were finding themselves in a Catch-22 situation. "This dwindling pool of talent makes it more and more difficult to recruit appropriately trained and qualified staff," he said.

"What we are now seeing is that many firms are choosing not to recruit at all, but when they do need to increase staff numbers the right people for the job are simply not available."

Shortages of skilled workers are particularly acute in construction and hotels and leisure, where almost six out of ten firms have experienced difficulties in recruiting skilled staff in the last six months.

Even in manufacturing, where the first tentative signs of recovery are only now beginning to appear after more than two years of decline, over a third of firms still had problems recruiting skilled staff.

According to Michael Riding, "businesses who do need to recruit are finding that getting the right people is very difficult and they have to work hard to do so. This could result in a situation where competitiveness in threatened as businesses have to come up with even more innovative ways to retain and motivate key staff and ultimately, wage bills are forced up.

"With over 600, 000 jobs lying vacant across the UK, what this survey shows us is that getting the right people to do the right job, and do it well, is a major problem for UK businesses.

"If the UK is going to be in a position to really trade on the world stage then we have to ensure that we foster a culture where people are trained in the skills that businesses need and vocational qualifications are just as attractive as academic ones."