Employers urged to stop ‘buying skills in from elsewhere’

23 Aug 2017 By Hayley Kirton

Two in five organisations have no capacity for extra work – but uncertainty over Brexit means they must focus on upskilling

Companies are being urged to stop relying on buying in skills, as research reveals that two in five (40 per cent) businesses have no spare capacity and would need to recruit to meet additional demand.

The latest JobsOutlook survey from the Recruitment & Employment Confederation (REC), published today, also found that almost a fifth (19 per cent) of the 601 employers it surveyed were planning to take on new permanent staff within the next three months.

This is despite employer confidence in the economy dropping to net -3 per cent, with 31 per cent believing the economy will worsen in the near future against 28 per cent that think it will improve.

“The jobs market continues to do well despite growing uncertainty,” said Kevin Green, REC chief executive. “However, this drop in employer confidence should raise a red flag. Businesses are continuing to hire to meet demand, but issues like access to labour, Brexit negotiations and political uncertainty are creating nervousness.”

David Willett, director at The Open University, said: “UK employers are faced with a chronic skills shortage, partly exacerbated by the uncertainties surrounding Brexit, which is why employers need to start looking at recruitment and staff development differently. It is now more important than ever that organisations invest in their workforce, to build up the skills they need, rather than buying them in from elsewhere, which can be costly and time-consuming.”

And Lizzie Crowley, skills adviser at the CIPD, said: “In light of Brexit, there is considerable uncertainty about the future ability of UK businesses to recruit EU migrants to fill shortage areas. This highlights the critical importance of understanding the demographics of your workforce and having a workforce development plan in place to address the current and future skills needs of your business.”

Open University research published in July found that skills shortages were costing UK businesses £2.2bn a year, as organisations were forced to shell out on inflated salaries, increased recruitment costs and temporary staff to hold the fort in the interim.

In June, Theresa May revealed that the UK would be introducing a settled status after Brexit, which would essentially maintain the rights of those EU migrants who had been in the country for at least five years.

However, it is less clear what the position will be for employers recruiting from the EU once the UK is no longer a member. Home secretary Amber Rudd has commissioned the Migration Advisory Committee to review EU migration, which is likely to contain some discussion on possible immigration systems for workers, but the final report is not due until September 2018 – just months before Brexit is set to be enacted in March 2019.

It has previously been reported that the government is considering special visas to tackle skills shortages in certain sectors, including a three-year 'brickie visa' for the construction industry. The REC report found that the construction industry in particular was struggling to recruit both permanent and temporary staff, thanks to the sector's dependence on EU workers and the government’s ambitious housebuilding targets.

The Office for National Statistics (ONS) is due to release statistics on migration tomorrow. However, figures published in May revealed that net long-term migration had slumped to +248,000, down 84,000 on the year before and driven partly by emigration from EU citizens.

Meanwhile, ONS figures published last week revealed that the unemployment rate had dropped to 4.4 per cent, down from 4.9 per cent a year earlier and the lowest it has been since 1975.

A government spokesperson said: “We recognise and value the contribution that EU citizens make to the social, economic and cultural life of the UK.”

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