UK employers express concern over shortage of skilled candidates

Report finds firms are facing ‘critical’ skills gaps as predicted demand for permanent staff increases

New data has revealed that nearly half of UK employers are still worried about a shortage of skilled candidates, as the demand for permanent staff increases despite low confidence levels in the UK economy. 

New data from the Recruitment & Employment Confederation’s (REC) JobsOutlook report revealed that, between May and July 2019, 46 per cent of employers of permanent staff expressed concern about finding enough suitable candidates for hire – a fall of only 4 percentage points since 2018 – renewing worries about the effects of a post-Brexit skills gap. 

According to the report, employers are anticipating the most “acute shortages” of skills in health and social care (48 per cent), engineering and technical (39 per cent) and hospitality (36 per cent).

The REC also warned that these results should “ring alarm bells” for the public sector, as 45 per cent of public sector employers reported having no spare workforce capacity at all. 

Commenting on the report, Kirstie Donnelly, managing director of City & Guilds Group, said: “It’s clear that UK businesses are facing critical skills gaps, which, left unaddressed, could have a detrimental impact on their productivity and ability to compete post-Brexit.  

“While there’s still plenty more to be done at policy level to minimise skills gaps, more employers should be considering how they can upskill and train their current workforce, to ensure they are equipped with the talent they need for the future.”

 The report also showed that employers are experiencing low confidence in the UK economy. The balance between respondents who were confident the economy would improve and those who believed it would worsen was -26 per cent – calculated by subtracting the percentage of respondents who answered negatively (44 per cent) from those answering positively (18 per cent). 

However, despite this drop in confidence, employers were still looking to hire. The REC forecasted that the demand for permanent staff would increase, with a greater proportion of respondents answering positively about future hiring intentions.

The balance of respondents saying they would increase permanent employees rose to +19 per cent in the short term and +21 per cent in the medium term in May-July 2019. This compared to the +16 per cent and +18 per cent respectively recorded in the previous quarter (February-April 2019).

Tom Hadley, director of policy and campaigns at the REC, said that the survey suggested that employers were seeking to take on both permanent and temporary workers to maintain stability amid Brexit uncertainty – and many were attempting to transfer their temps to permanent roles to combat candidate shortages. 

The percentage of companies transferring at least half of their temporary workers on to permanent contracts increased from 15 per cent in May-July 2018 to 23 per cent in the same period this year.

Hadley added that the government’s recent announcement that freedom of movement could end abruptly on 31 October if there is a no-deal Brexit had “come at the worst possible time” for employers.

“EU workers are an integral part of our health and social care system and the UK workforce as a whole. It is essential that the government has in place a sensible transition towards an evidence-based immigration policy to help reassure employers and EU citizens,” he said.