Budget must address "critical" skills shortages

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Date: 4 February 2020

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Almost three-quarters of UK firms looking to recruit have struggled to find the right talent, a new survey of employers has found.

The latest Quarterly Recruitment Outlook from the British Chambers of Commerce (BCC), in partnership with Totaljobs, has highlighted the serious skills shortages in the UK workforce, describing the situation as "critical".

Over half (55%) of UK businesses attempted to recruit in the final quarter of 2019. However, skills shortages continue to impact growth as 72% of firms reported recruitment difficulties in Q4 2019.

Shortages are most apparent in construction and hospitality, with 79% and 77% of firms in these sectors respectively struggling to recruit. Two-thirds (67%) of construction businesses tried to recruit in Q4, up from 62% in Q3.

Looking ahead, 26% of UK firms say they plan to increase their workforce in the first quarter of 2020. The construction industry reports the highest proportion of firms looking to grow their headcount (34%).

The findings highlight the need to address critical skills shortages in the upcoming Budget, including commitments to long-term funding for vocational education and for apprenticeships in small and medium-sized businesses. The BCC and Totaljobs are also calling on the government to review the Apprenticeship Levy.

Adam Marshall, BCC director general, said: "Although it is encouraging that businesses are looking to take on people, the prolonged skills shortages they're facing are not sustainable as they try to shake off years of political uncertainty and pursue growth.

"Training has got to be at the heart of the upcoming Budget if the government wishes to demonstrate that it is serious about 'levelling up' opportunity all across the UK. Funding boosts are needed for vocational and technical education, for apprenticeships, and for incentives to help more employers provide high-quality job-related training."

The survey has also found that uncertainty over the UK's future immigration regime continues to be a concern. Businesses need clarity on who they can recruit, Marshall said. "As things stand, businesses don't know who they can hire, and under what conditions, from New Year's Day 2021. That's unacceptable. The government needs to act swiftly to deliver a fast, flexible new immigration system that allows firms to access staff at all skill levels, and limits upfront fees, delays and costly red tape."

Written by Rachel Miller.

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