- Study from Hays plc shows an increasingly acute shortage of higher level skills available in UK labour market
- UK immigration reform critical to attracting more skilled overseas workers to meet current requirements
- Only Spain, Portugal and Ireland in Europe suffer a greater talent mismatch than the UK
The UK economy is facing an emerging skills shortage, which threatens to derail recovery and undermine the country’s growth prospects.
Talent mismatch problems have been exacerbated over the past year as the economy shows signs of recovery, opportunities are being created but the necessary skilled resources are unavailable.
Talent mismatch issues in the UK are particularly apparent in industries such as oil and gas, energy, IT and construction where niche skills are in increasingly high demand. In Europe, the only countries that face greater talent mismatch challenges than those of the UK are Spain, Portugal and Ireland – all economies badly affected by the Eurozone crisis.
These are the findings of the Hays Global Skills Index 2013, a report published today by Hays plc, the leading global professional recruiting group, produced in collaboration with Oxford Economics.
The report, titled ‘The Great Talent Mismatch’ and based on an analysis of employment markets across 30 major global economies, highlights the extent to which businesses and governments have to work together to build the right skills pipeline for sustainable recovery and growth.
While more positive sentiment on the economy is starting to gain momentum, more action from both government and the business community is required to address on-going skills shortages.
In particular, the UK government must review its immigration policies to make them more geared towards attracting skilled workers that are in short supply locally, echoing Boris Johnson’s latest proposals for a ‘London visa’ to bring more talent into the capital in the areas of technology and fashion.
In the long term, education policy must be aligned far more closely with the needs of businesses. This also means motivating students towards the education required to meet the demands of industry, easing the transition for students into employment and ensuring the widest possible group of skilled workers across all generations are participating in the labour market.
Hays’ Chief Executive Alistair Cox said: “This year’s Hays Global Skills Index makes it very clear that the pressure on the UK labour market is increasing. Too many skilled jobs are now going unfilled because the right skills are in increasingly short supply. This makes a real dent on a company’s ability to grow and constrains the UK’s economic prospects at a time when we need to be encouraging a sustained recovery.
“Longer-term, business and government need to rebalance the education system to produce greater numbers of the skilled individuals that our industries need. In the short-term however, the only real route to fill these roles is revisiting the UK policies around skilled immigration. Policies are required which allow businesses to source the talent they now need, regardless of nationality. The alternative is to leave these skilled roles unfilled, leading to reduced investment, lower GDP growth and lower future job creation for the local workforce.
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Notes on methodology
The Hays Global Skills Index creates a score for each country of between 0 and 10 to measure the constraints and frictions being faced by its market for skilled labour. This is calculated through an analysis of seven components, covering areas such as education levels, labour market flexibility, and high-skill wage pressures.
A score above the mid-point of 5.0 suggests that employers are witnessing difficulties finding the key skills they need and are suffering market friction, whilst a score below 5.0 indicates a lax labour market in which there are no major constraints on the supply of skilled labour. Within these overall scores however, the scores attributed to each of the seven components can vary significantly, highlighting the different dynamics and pressures faced by each country.
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 2013 the Group employed 7,840 staff operating from 239 offices in 33 countries across 20 specialisms. For the year ended 30 June 2013:
- the Group reported net fees of £719 million and operating profit (pre-exceptional items) of £125.5 million;
- the Group placed around 53,000 candidates into permanent jobs and around 182,000 people into temporary assignments;
- 29% of Group net fees were generated in Asia Pacific, 40% in Continental Europe & RoW (CERoW) and 31% in the United Kingdom & Ireland;
- the temporary placement business represented 59% of net fees and the permanent placement business represented 41% 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