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Facing Up to the UK’s Skills Shortage Challenge

The government are right to point to the continuing reduction in unemployment figures as evidence of a robust and growing economy in the UK. However, this optimism hides a growing number of unfilled specialist roles that point to a skills shortage that all employers and recruiters need to face up to. This year’s GDP estimates, that were published on 4th February, were interesting as they clearly show which parts of the economy are growing, and in which areas the skills market is failing to keep up with demand.

The estimates are likely to show that the construction and industrial sectors are continuing to struggle, while the digital economy is growing rapidly. A forecast made by Accenture Strategy predicts that by 2020 the online, digital economy will be worth over £776 billion pounds per annum, amounting to 33% of the total GDP. With scientific and technical job vacancies at their highest level since the turn-of-the-century, we clearly have a job on our hands up skilling our workforce to ensure long-term economic growth.

In the short term at least, the government’s proposals to restrict long-term work permits for non-EU nationals to those earning £35,000 and more per year is going to exacerbate the problem. The cap is going to make it more difficult for UK employers to headhunt talent from India, China and the USA, who will instead be attracted to positions in other growing high-tech economies, such as Norway, Japan and New Zealand.

So, what are the factors that will help the UK economy meet this skills shortage in the coming few years?

Continued migration

Selective migration from skilled workers (with jobs to come to when they arrive in the UK) is a proven means of ‘filling the gaps’ in different sectors and ensuring a flexible, skilled workforce. The presence of skilled migrant workers has the effect of encouraging further investment by employers in up-skilling their teams. The £35k wage barrier is going to make this more of a challenge, so we hope the government will show flexibility in either enabling start-ups and digital businesses to source talent from overseas, or to make it easier to invest in training for UK staff.

An increase in contract roles

Increasingly, recruiters and businesses are turning to temporary, fixed term contractors to fill the gap in skills normally taken by permanent employees. A survey of recruitment agencies by Hitachi Capital revealed that 72% had experienced increased demand for temporary contract is over the past year, a figure that rises to 85% for London companies. The increase in demand is being disproportionately felt in the healthcare and tech sectors, where highly skilled ‘super contractors’ are being actively headhunted in order to bridge the skills shortage.

Investment in Continual Professional Development

Skilled migrants and temporary contractors go a long way to temporarily overcoming a skills shortage in a business, but for long-term growth, Continual Professional Development remains the most sustainable and cost-effective means of up skilling permanent employees. With the emphasis on technical disciplines in the digital sector, the initiative lies with employers to create a compelling environment for staff to develop and grow their skills for the benefit of their businesses.

At First Base we are committed to helping you meet the challenges of the next few years by providing you with the temporary or permanent staff that bring the skills you need to grow your business. For impartial advice from one of our recruitment consultants, please don’t hesitate to drop us a line through our online contact form.

Tricia Hay

Tricia Hay is Owner, Director of First Base Employment Limited

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