Vacancies left unfilled as skills shortage bites

Construction and financial services among sectors worst hit as employers struggle to find suitable candidates for around 25pc of vacancies

By Sally Percy

UK Telegraph Newspaper

9:27AM GMT 29 Jan 2016

In 2015, nearly a quarter of all job openings were left vacant because employers could not find people with the necessary skills or knowledge to fill them. This is a 130pc rise since 2011, according to the newly released 2015 Employer Skills Survey (ESS) from the UK Commission for Employment and Skills (UKCES).

The UK’s modest economic recovery between 2011 and 2015 can partly explain the increase in skills shortages; businesses have ramped up their hiring to meet customer demand. It does not tell the whole story, however. “Education has not always been aligned with demand in the marketplace,” says Douglas McCormick, a UKCES commissioner.

“We have real shortages of skilled labour in construction and also in professional services. That’s because in prior years there hasn’t been enough investment in the people coming through.”

As the survey highlights, skills shortages in the construction sector are a real concern, since the sector contributes nearly £90bn to the UK economy, employs more than a million people and undertakes strategically important housing and infrastructure projects. Worryingly, employers struggled to fill one in three construction vacancies in 2015.

The survey revealed that the UK workforce is in the throes of a time-management crisis, which may help to explain the productivity problem

Following the financial crisis, the financial services sector contracted sharply. Now it wants to boost its workforce to support growth and enable it to comply with stringent regulations. It is finding this challenging, however, particularly at graduate level.

“Traditionally, financial services has been a big employer for people leaving higher education, and it continues to be,” explains Alex Thornton, senior research manager at UKCES. “But it is struggling to compete with tech firms.”

The survey also revealed that the UK workforce appears to be in the throes of a time-management crisis, which may help to explain why productivity continues to be a drag on the economy. In 2015, employers cited time management as being the personal skill most commonly lacking in the labour market.

The trends highlighted by the Employer Skills Survey can give employers useful competitive insight and ensure that they make sensible investments

Interestingly, Mr McCormick believes that poor time management could indicate a wider problem – the general quality of management in UK organisations. “Time management is very simple,” he says. “You teach people how to set priorities, and to deal with those priorities in a timescale that suits them. But if nobody has ever taught you how to manage your time well, then you become inefficient.”

The trends highlighted by the Employer Skills Survey can give employers useful competitive insight and ensure that they make sensible investments – for example, when they look into what works best or choosing the right training programmes.

“The survey allows employers to understand the larger, macro-level challenges that are going on in their sector and to benchmark how they are performing against other, similar businesses,” explains Mr Thornton.

Skills shortages can act as a brake on businesses and on the economy more broadly. The survey found almost all employers that had difficulty filling vacancies solely as a result of skills shortages in 2015 said it impacted on their business.

Ultimately, there will be a need for co-ordinated action by employers, policymakers and training providers to overcome skills shortages

A huge 84pc said workloads increased for other staff; business or orders were lost to competitors (43pc); and there were delays developing new products or services (43pc). Staff, the bottom line and growth were affected.

Ultimately, there will be a need for co-ordinated action by employers, policymakers and training providers to overcome skills shortages. Together they can ensure that people leave higher education with the right skills, that employers help their own employees to grow, and that underutilised people in the existing workforce have the opportunity to retrain and reskill.

“If we focus on addressing the skills issue, we can reduce the skills shortage,” says Mr McCormick. “If we do nothing, it will get worse.”

Training: the key to success – how Unipart develops its own talent

Manufacturing, logistics and consulting company Unipart Group does rolling projections of the skills that it will require over a three- to five-year period. The group uses external skills surveys such as the UKCES research to inform these projections and to make business plans.

“We use external statistics as a broad guideline,” explains John Greatrex, Unipart’s HR director, “although we don’t rely on them for our detailed planning requirements.”

The UK workforce currently lacks certain specific skills that Unipart needs, particularly in terms of engineering and digital capability. So it overcomes these shortages by developing its own talent.

“Every part of our organisation has a training facility in it,” explains Mr Greatrex. “And everyone in the business has a competency matrix and development plan.”

The group also runs its own Institute for Advanced Manufacturing and Engineering in conjunction with Coventry University, but Mr Greatrex believes “organisations that don’t have their own training capabilities will find it hugely difficult to fill their skills gaps”.