Skills shortages have a significant impact on businesses
The UKCES Employer Skills Survey 2015 is one of the largest of its kind in the world. Based on interviews with over 91,000 UK employers, it offers a comprehensive insight into the state of skills in the UK. The first of two animations looks at skills, recruitment, and the impact these have on the economy as a whole.
The biennial Employer Skills Survey is one of the largest surveys of its type in the world. Based on more than ninety one thousand interviews with employers across the UK, it offers a comprehensive insight into the state of skills in the UK. In the first of two videos looking at the 2015 survey, we examine issues around skills and recruitment, and what this means for the economy.
The economy has performed well in the two years since the previous survey in 2013, and this is reflected by high levels of job creation in 2015. At the time of the survey, there were an estimated 927,000 job vacancies across the UK- up by 42% compared with 2013 - with 19% of companies reporting vacancies, compared to 15% in 2013 and 14% in 2011.
Although employment has remained strong, productivity remains a concern in the UK, as our economy has struggled to keep pace with other nations. The UK’s productivity problem makes finding the right employees more important than ever. And although vacancies have risen, this have been matched by an increase in employers struggling to find the skills they need.
In 2015 around a quarter of all vacancies were deemed hard-to-fill due to shortages in skilled labor. The total number of these So called “skills shortage” vacancies rose from around 146,000 in 2013, to 209,000 in 2015 - a rise of 43% in just two years.
Close to half of employers with a skills shortage say they have lost business to competitors as a result – demonstrating just how big an impact such shortages have.
Our smallest employers, with less than five employees, are hit particularly hard -with 29% of their vacancies hard to fill due to a lack of skills. This is worrying – as these very small firms make up about half of all UK employers.
Strong vacancy growth has also made retaining staff more of an issue for UK employers. In 2015, one in every 12 employers reported problems with retention in at least some occupations - nearly double the levels of 2011.
Looking at the skills challenges by sector, financial services and construction have seen very sharp increases in skill shortages since 2013.
Skill shortages have more than doubled in two years within financial services. Roles such as underwriters, investment analysts and accounting technicians are proving particularly difficult to recruit for. This acts as a brake on productivity, and given the importance of financial services to the UK economy as a whole, has ramifications which go beyond the sector.
Meanwhile in construction – a key sector for growth - skills shortages are hurting business - 56% of employers that have skill shortages saying they had lost business as a result.
The survey shows employers are struggling to find softer people and personal skills, as well as technical skills. Customer handling abilities and team working are proving to be increasingly scarce, with time and task management causing issues in around half of all skill shortage vacancies.
Complex analytical, problem solving and mathematical skills are also among those hardest to find; skills that are key to helping organisations to adapt and innovate.
Skills shortages have a significant impact on businesses. They may reduce productivity and competitiveness and ultimately hinder the UK’s economic performance.