Skills Shortages in Conflict with Recruitment Plans

Posted on: 06.12.2010    10:31:38

The U.K. private sector is planning to add jobs in the next 12 months, but concern is growing that a lack of skilled workers could dent hopes of filling vacancies. According to a survey by PricewaterhouseCoopers, 28% of U.K. firms polled said they plan to increase staffing in 2011. Still, 53% of U.K. companies say that the current skills shortage represents the biggest challenge.

The shortages are generally concentrated at the trade skills level with welders, fabricators and bench joiners being very much in demand. The care sector is struggling to fill vacancies with nurses being in very short supply. Inevitably therefore the influx of Polish workers will continue and may be joined by other EU workers particularly from Ireland.

Until the UK provides a long term fix to its education system rather than papering over the cracks then the momentum of job creation will be, in part, offset by the necessity to import people to fill the skills gap. This will not be a short term fix but something that will take a decade of joined up thinking from the government in charge of strategic planning and execution of appropriate policies.

At present said Mr Rendell of PwC “The U.K. has lost its position as the world’s most educated work force, which is parrticularly worrying as we come out of the recession and may limit future growth,” Mr. Rendell added that companies need to ensure money spent on training is as closely monitored as capital investment in order to get the most from their work force, and particularly new workers.

A lack of skills at a time just as the economy is in great need of job creation to help prop up the wider economy will be worrying news for the U.K.’s coalition government as the erosion factor goes unreported elsewhere.

The independent Office for Budget Responsibility predicts a net increase in employment over the coming years, as it forecasts increasingly strong growth in the U.K.’s private sector but how many of these will be suitable for the 330,000 public sector jobs to be slashed? Undoubtedly a proportion will be taken by Polish workers and the like and real risk exists that a significant proportion of the public sector caste offs will not have transferable skills required by the private sector and will become the new unemployed. Add to this that growth forecasts are seen as unrealistic by some economists, particularly in 2011, when the bulk of jobs will be lost and companies will be competing hard for their share of much diminished discretionary income.

We can not afford to dismiss the impact of the 2.5% hike in VAT on the 4th January and this may further erode spending. Whilst growth in 2010 has been above forecast levels we are now seeing forecasters adjust down growth for 2011 to under 2% and that may well turn out to be ambitious.

Again the B of E’s printing presses may well need to be restarted in the middle of next year as it is naïve to think that the UK can stage a unilateral recovery when all the surrounding markets and associated spending power remain in trouble.


Author: Chris Slay

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