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The £2.2 Billion cost of the skills gap

 

The Open University recently published the findings of research conducted with 400 businesses during April and May this year.

The sample of businesses comprised 300 small and medium sized enterprises (SMEs) and 100 larger and the study found that the skills gap is costing UK businesses more than £2 billion a year in higher salaries, recruitment costs and temporary staffing.

Key findings were that:

  • 90% of employers have struggled to recruit workers with the right skills in the last 12 months
  • £527 million spent on inflated salaries to attract talent
  • 7 in 10 (69%) employers will struggle to find workers with the right skills in the next 12 months

The research showed that the recruitment process is taking longer for three quarters (75%) of employers – an average of one month and 24 days more than expected – which means many will have incurred additional costs in the form of recruitment fees and hiring temporary staff, estimated to be at least £1.7 billion.

Vacancies proving hardest to fill include senior managers, mid-level managers and almost half of the employers were struggling to attract talent with the right IT skills, crucial at a time of digitisation and technological revolution.

The research also indicates that over half employers hired at a lower level because they were unable to find a candidate with the required skills, placing an increased reliance on training. There is a recognition that certain skills may take longer to build and the number of employers offering apprenticeships is expected to double to 59%, indicative of the implementation of the apprenticeship levy.

Investing in talent at all levels has to be a priority for the government and businesses in order to address the skills and talent requirements of the country at a time of challenge and uncertainty.

Read the full article

The Employment and Skills service at Wiltshire Council offers support to businesses in a number of ways:

  • Our Higher Futures team provides local access to a substantial higher education offer which focuses on identifying skills gaps, providing impartial advice and guidance on options available and sourcing suitable higher education training.
  • The Routes to Employment team can support employers to find out more about the process of employing an apprentice including how it works, an overview of funding and help with advertising vacancies.
  • Impress HR supports small growing Wiltshire businesses who have not HR support in house and are looking to grow their staff

Please contact us to find out more about how we can help.

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Higher Futures is delivered by Wiltshire Council / Swindon Borough Council on behalf of Swindon and Wiltshire LEP.

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