- New report shows skills shortages in the UK have become more acute for fourth consecutive year
- UK labour market under strain as talent mismatch exacerbates productivity issues
- Inflationary wage pressures significantly increased from last year as companies struggle to find the right people
UK employers are facing even greater skills shortages and rising wage pressures, according to a new report from Hays plc, the global professional recruiting group.
Since 2012 the UK’s talent mismatch level – the gap between the skills people can offer and the skills employers are looking for – has increased every year. The UK now has a talent mismatch score of 9.7 out of 10, among the worst in Europe.
The UK’s widening skills gap is highlighted by the Hays Global Skills Index 2015, a report published today by Hays in collaboration with Oxford Economics. The report, ‘Labour markets in a world of continuous change’ is based on an analysis of professional employment markets across 31 major global economies.
Wage pressure in the UK has also increased significantly since last year as the economy returns to health. This reflects the war for talent in certain industries, including engineering and technology, which is forcing companies to pay a higher premium for the best people.
The report outlines the need for UK and global businesses to work closely with respective governments to find long-term solutions to current talent shortages and faltering productivity. Otherwise long term growth will be at risk.
Commenting on the findings of the report, Hays’ Chief Executive Alistair Cox said:
“This year’s report offers grounds for optimism but none for complacency. UK growth prospects are better than they have been in a long time but employers are facing ever-greater challenges to find the talent they need. This can only mean that the productivity challenges we face as a nation will become even more severe.”
“We need to resolve the UK’s productivity puzzle and the current skills gap is clearly a big part of the problem. The answer does not lie in working longer hours, but in developing and using the right skills for the job. Better training for UK workers, attracting highly-skilled workers from overseas and investing in better technology are all part of the solution and will be critical in shifting the economy into the next gear.”
The pressure on wages is not unique to the UK, with this indicator worsening in 21 of the 31 countries examined by the report. Labour markets around the world are also struggling to shake off the after-effects of the financial crisis, in particular the ‘employment gap’ – the jobs lost since the start of the crisis.
“Economic growth in the last year has boosted employment and given businesses new opportunities to grow. However, with this growth comes new challenges in the form of a mismatch of talent with the skills business needs, further wage inflation and stagnant employee productivity. The result unfortunately is many people working longer hours but not getting more done. Only by addressing these skills shortages – through flexible employment regulation and skilled migration policies in the short term and an education system more tuned to business needs in the long term – will we ensure a strong recovery for 2016 and beyond.”
Notes on methodology
The Hays Global Skills Index provides a score for each country of between 0 and 10 which measures the pressures present in its labour market. The score is calculated through an analysis of seven equally weighted indicators, each covering different dynamics of the labour market, such as education levels, labour market flexibility and wage pressures.
An overall score of above 5.0 indicates that the labour market is ‘tighter’ than normal. A score below 5.0 indicates the market is ‘looser’ than normal. Within these overall scores, however, the scores attributed to each of the seven indicators can vary significantly, highlighting the different dynamics and pressures faced by each country.
- ENDS -
Hays plc (the "Group") is a leading global professional recruiting group. The Group is the expert at recruiting qualified, professional and skilled people worldwide, being the market leader in the UK and Asia Pacific and one of the market leaders in Continental Europe and Latin America. The Group operates across the private and public sectors, dealing in permanent positions, contract roles and temporary assignments. As at 30 June 2015 the Group employed 9,023 staff operating from 240 offices in 33 countries across 20 specialisms. For the year ended 30 June 2015:
– the Group reported net fees of £764.2 million and operating profit (pre-exceptional items) of £164.1 million;
– the Group placed around 63,000 candidates into permanent jobs and around 200,000 people into temporary assignments;
– 23% of Group net fees were generated in Asia Pacific, 41% in Continental Europe & RoW (CERoW) and 36% in the United Kingdom & Ireland;
– the temporary placement business represented 58% of net fees and the permanent placement business represented 42% of net fees;
– Hays operates in the following countries: Australia, Austria, Belgium, Brazil, Canada, Colombia, Chile, China, the Czech Republic, Denmark, France, Germany, Hong Kong, Hungary, India, Ireland, Italy, Japan, Luxembourg, Malaysia, Mexico, the Netherlands, New Zealand, Poland, Portugal, Russia, Singapore, Spain, Sweden, Switzerland, UAE, the UK and the USA
About Oxford Economics
Oxford Economics is one of the world’s foremost independent global forecasting and research consultancies, renowned for its econometric-based consulting and extensive research services. Founded in 1981, Oxford Economics was originally formed as a joint, commercial venture with the business college of Oxford University, Templeton College. Since its foundation, Oxford Economics has grown into an independent provider of global economic, industry and business analysis, headquartered in Oxford, UK.
Oxford Economics is a world leader in quantitative analysis, going deeper and further than other economic advisory firms, in helping its clients to fully assess the opportunities and challenges they face for future strategy and direction. It specialises in global quantitative analysis and evidence based business and public-policy advice, underpinned by a sophisticated portfolio of business forecasting services consisting of regularly updated reports, databases and models on countries, cities and industries.
For more information, visit www.oxfordeconomics.com