Half of employers forced to hire under-qualified staff

3 Jul 2017 By Hayley Kirton

Skills shortages costing £2.2bn a year; HR urged to take the ‘driving seat’ in workforce planning

More than half (53 per cent) of employers have faced such severe talent shortages that they have been forced to hire somebody less skilled than they had hoped, research released today has found.

The Open University Business Barometer said almost all UK businesses are struggling with talent, with 90 per cent of the 400 organisations surveyed reporting difficulties filling a vacancy in the last year.

Management roles are proving particularly tricky to fill, with a fifth (21 per cent) saying they had difficulties hiring senior managers and a similar proportion (19 per cent) having problems filling mid-level management roles. 

Meanwhile, three in five (58 per cent) employers believe skills shortages have damaged their organisation.

“The UK challenge of finding talent with the right skills means that businesses need to look at recruitment, development and retention differently,” said Steve Hill, external engagement director at The Open University. “Now faced with a shrinking talent pool, exacerbated by the uncertainties of Brexit, it is more important that employers invest in developing their workforce.”

Lizzie Crowley, skills adviser at the CIPD, said the findings showed that “HR really needs to be in the driving seat” on workforce strategy and planning.

“Even though this data highlights that businesses have got skills gaps and skills shortages, many of those businesses don’t know where the shortages are… not enough businesses are actually looking strategically at the skills that are available in their current workforce, how to best utilise those skills and also what type of training interventions they need to put into place to address any gaps,” Crowley added.

The Open University research also discovered that skills shortages are setting businesses back £2.2bn a year in inflated salaries, increased recruiting costs and temporary staff.

In particular, employers have boosted their salaries by a collective £527m to attract the right staff, with more than half (56 per cent) having raised a pay offer well above market rate in the last year. On average, SMEs hiked salaries by £4,150 per hire to snag the right person, while larger organisations were raising salaries by £5,575 per hire.

Office for National Statistics (ONS) figures, released last month, showed that the UK unemployment rate is now just 4.6 per cent, the lowest it has been since 1975. 

Meanwhile, concerns have already been raised that Brexit will further intensify the pressure on talent. Jonathan Beech, managing director of immigration law firm Migrate UK, warned that the UK could suffer a “Brexit ‘brain drain’”, after ONS data revealed in May that net migration had fallen in 2016, driven in part by a sharp rise in emigration from EU migrants. 

And research by the CIPD and the National Institute of Economic and Social Research, released last month, found that more than a third (35 per cent) of employers in traditionally lower-paying sectors – such as food manufacturing, hospitality and care – had been pushed to hire EU staff because they were unable to find Brits to fill their vacancies.

The Open University report will be presented to MPs and peers later this month. 

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