Billions of pounds in extra recruitment costs and inflated salaries are being spent by UK employers due to skills shortages
The UK currently has the lowest unemployment rate since 2005, with those employed reluctant to change jobs due to Brexit uncertainty. The lack of clarity regarding future immigration rules also proves to be a deciding factor, with some EU nationals nervous to take up roles in the UK. Some companies have tried to overcome these challenges by increasing salaries above market rate to attract top talent. The Open University has estimated that this costs employers a further £527 million.
The study found that the average increase amounted to £4,150 per hire for SMEs and £5,575 per hire for larger organisations.
Over the next year, employers are planning to change the type of training they offer to their staff, reports The Open University, with some putting a heavy focus on retraining and developing in-house staff skills. The largest, public distance-learning and research university expects the number of organisations in England offering apprenticeships to nearly double from 31% to 59%. It believes this is most likely as a result of the new apprenticeship levy. Just over half (52%) of employers in England expect the levy to reduce the skills gap in the next year, with three in five (62%) viewing it as an opportunity for their organisation.
External Engagement Director at The Open University, Steve Hill, said: “The UK challenge of finding talent with the right skills means that businesses need to look at recruitment, development and retention differently.”
”Organisations need an agile workforce that can embrace change and meet new challenges. The cost of the skills gap to the UK economy shows it must become a business and government priority to build the skills and capabilities of each individual through investing in talent at all levels. The Open University has a number of offerings, such as degree apprenticeships, which help to future-proof UK businesses and enable lifelong learning, as well as enabling greater social mobility by increasing opportunities.”
The full findings of the report will be presented to MPs and Peers at an event in the Houses of Parliament tomorrow, 11 July.