Intensifying skills shortages are set to stifle current business optimism.
Lack of suitably skilled staff is hampering commercial activities and the achievement of business objectives for many south-central companies.
With 70% of employers having already experienced moderate to extreme skills shortages, the triple challenge of talent employment – obtain, maintain, retain – is now reaching new competitive heights, writes John Burbedge.
Businesses are still very keen to hire (71% plan to recruit over the next 12 months) but 77% anticipate a shortage of suitable applicants, revealed Hays director Sarah Stevenson in Reading when presenting the Hays UK Salary and Recruiting Trends 2018 survey findings*.
“Despite this positive outlook, and employers charging ahead with both business and hiring plans, they are faced with huge recruitment challenges. In fact, we may currently be in one of the toughest recruitment markets in recent years.
“Unfortunately, skills gaps are already having far-reaching consequences with the potential to restrict future plans and not just those related to hiring – 59% of employers say skills shortages are negatively impacting their productivity,” Stevenson added.
“Employers are facing a double-edged sword through skill shortages – not only are business objectives being challenged, but existing employees are feeling the pressure.”
Findings provided within Hays’ comprehensive 280-page report, its fourth overall UK salary and recruitment insight, include:
- Despite current market uncertainty, employers remain positive – 95% state their future business activity will increase or stay the same.
- Skills shortages are now a challenging concern, 76% of employers believe current lack of employee talent will prevent them achieving their objectives.
- High competition for skilled staff, willingness of employees to move, and fewer people entering the jobs market is compounding skills shortages.
- More businesses are now relying on temporary and contract staff,
- Skills shortages are putting existing employees under significant pressure, reducing morale, increasing workplace stress, and stifling career ambitions.
- Such issues are encouraging employees to consider leaving their jobs for better salaries and work-life improvements.
Four out of five Thames Valley employers see their top recruitment challenge as lack of suitable candidates, higher than the 77% UK average.
Unsurprisingly in the dynamic Thames Valley economy, competition is fuelling the skills search challenge, highlighting the importance of employers investing in their own branding (particularly online/social media) and ‘grow-your-own’ upskilling schemes.
“Employers need to stand out with a distinct employment offering that will appeal specifically to the types of talent that they require. You want candidates to approach you even before you have a role.”
Yet mismatches still exist between employment benefits offered by businesses and employee expectations. For example, 26% of employees view work-life balance as key when considering a new role, yet only 15% of employers see it as important in order to attract staff.
“From my team’s local experience, badly managed change, increased pressure, lack of career progression and not being able to work flexibly are among the key motivators for wanting to leave a company rather than salary being a single driver,” noted Stevenson.
Hays gave businesses three recommendations for 2018:
- Make workforce planning a key strategic priority.
- Invest in your employee brand to compete for talent.
- Utilise contingent workers for more than just projects.
CBI on the Brexit case
London & Thames Valley director Eddie Curzon explained how the CBI was working hard ‘behind the scenes’ meeting government representatives
about businesses’ Brexit concerns – and campaigning for a status quo transitional business period that averts a cliff-edge Brexit; for positive international trade partnerships; ‘right to remain’ reassurances for UK and EU27 citizens; and a suitable ‘business-friendly’ future migration system.
Brexit issues had overshadowed current business concerns about poor government implementation of the Apprenticeship Levy, he suggested.
Thames Valley to the rescue?
EY economist Marcus Richards’ macro-economic overview painted a somewhat dismal outlook – UK economic growth forecast to fall to 1.4% next year (1.8% in 2016), interest rates rising for the first time in 10 years, growing UK consumer debt, lack of consumer confidence, and 3% inflation outstripping average earnings growth.
The good news? EY’s assessment after recent research: “The Thames Valley already brings significant value to the UK, has adaptability, employment, resilience – all things that can act as a foundation to make the region a real engine of growth for the UK economy.”