Lack of skills reaching ‘critical’ levels, business leaders warn

The latest quarterly economic survey by the British Chambers of Commerce shows almost three quarters (71%) of service sector companies reported recruitment difficulties in the last three months of 2017, which is the highest figure since records began.

And 75% of firms in the manufacturing sector also reported recruitment difficulties in the same time period.

Of these, skilled manual labour was the leading area of recruitment difficulties (68%).

The survey also shows that growth in the British economy remains subdued, with almost all services indicators below their pre-EU referendum levels and the strong performance of manufacturers easing slightly in the final quarter of 2017.

And the findings of the survey indicate the skills shortages are reaching ‘critical’ levels. According to the British Chambers of Commerce (BCC), the results emphasise the need to kick-start the economy by addressing the growing skills gap, which is hindering the ability of companies to find the workers they need to develop.

‘Labour and skills shortages are set to be the biggest potential drag anchor on business in 2018, since ultimately it is people that make businesses work,’ said the director general the BCC, Dr Adam Marshall.

‘Business itself must do more – by training and investing wherever possible in people – but government must also give firms the confidence to put their livelihoods on the line and go for growth.

‘This must be the year employers act rather than just complain on skills, and the year government delivers clarity, leadership and investment in people and infrastructure. Kick-starting growth, and boosting wages and prosperity for all, depends on this,’ added Dr Marshall.

Responding to research, the chairman of the Local Government Association’s people and places board, Mark Hawthorne, said: ‘Twelve million people – the combined population of London, Greater Manchester and Staffordshire – will be without a job or in work they are over-qualified for by 2024.

‘Without radical reform, swathes of people face a future where they have skills mismatched for jobs, risking them being in low paid, insecure work, and reliant on benefits, at a huge cost to people’s lives and the local and national economy.

‘The current system for getting the unemployed into work and increasing their skills levels is not working for the economy, for employers or individuals. This has to change for the future economic prosperity of this country,’ added Mr Hawthorne.