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UK skills gap costing businesses more than £2 billion, according to the Open University
6 July 2017
90% of employers have found it difficult to recruit workers with the required skills in the last 12 months, resulting in increased organisational costs
The skills gap refers to the gap that is created as a result of workers lacking the skills that employers have specified that they are looking for in advertised roles. HR Review posted on article on Monday, which stresses the skills gap that exists in most companies today; 90% of employers found it difficult to recruit workers in the last 12 months with the skills they were looking for.
Costs of skills gap
The total costs of the skills gap are a combination of increased recruitment costs, temporary staffing and inflated salaries, according to research by the Open University.
75% of employers say that their recruitment processes have increased in length by one month and 24 days on average. In addition to that, they have had to hire more temporary staff, which together with the increased recruitment costs total £1.7 billion.
Furthermore, because there is a skill shortage in workers, in order to attract talent, the salaries of the few workers who do possess the necessary skills have experienced inflating salaries, which have costed the companies in the UK £527 million alone.
Workers affected by and causes to skills gap
Workers who are likely to fall into the skills gap include newly qualified graduates and those who have been made redundant, especially older workers.
Today there are more university graduates than ever before. These graduates have higher qualifications but also fewer practical skills, that can only be gained in the workplace.
It used to be more common for companies to take in graduates and offer them training for the job. However, as some graduates did the training for the benefit of themselves and their own career, rather than intending to stay with the company that offered the training, many companies have become more reluctant towards offering their employees as much training as they did before. Many companies are therefore looking to hire ‘job-ready’ employees who already have some practical skills or training, in order to save costs. However, this has led to an increased skills gap in the workforce as a result.
Government incentives aimed at reducing the gap
A new apprenticeship levy was introduced in April earlier this year and the levy will be paid on annual paybills in excess of £3 million and so less than 2% of UK employers will pay it. As a result, the number of organisations in England offering apprenticeships are expected to nearly double, from 31% to 59%.
This levy seems to bring hope to many organisations- 52% of employers in England expect the levy to reduce the skills gap in the next year and 62% think it will be an opportunity for their organisation. However, 69% of employers still believe that they will struggle to hire people with the right skills in the next 12 months.
The role of recruitment agencies in reducing the gap
Recruiting new members of staff is indeed a lengthy process and if there is a skills gap, the process is expected the be dragged out. Recruitment agencies, such as Stafffinders, offer their expertise in recruiting staff with the right skills. As they have a database of candidates, they can shorten the recruitment process, which could save your organisation time and money.
The consultants at Stafffinders also have a network of talented prospects who are already employed and not actively looking for a job, but might be interested in other career opportunities should they arise. Most companies would only scan the active talent market, whereas Stafffinders also scan the passive talent market, which might help finding the right person for the role.
Is your organisation experiencing a skills gap in your workforce or is your recruitment process lengthy and costly? Contact Stafffinders to find out how we can help you with your recruitment needs.