The UK skills shortage: Companies need a flexible workforce

Recent Government figures point to continued imbalances in the UK labour market, contributing to a persistent skills shortage and casting a long shadow of doubt over the long-term growth prospects of the British economy. The recent Office for National Statistics (ONS) report on skills mismatches analysed the extent to which UK workers are over or under qualified in their current positions compared to the average for their jobs.

Highly specialised skills are scarce

In 2015, the number of individuals who were under-qualified for their job was at its highest since 2012, meaning that employers are often being forced to hire employees without the knowledge and capabilities required for the job.

This constitutes an uphill battle for the British economy as highly specialised skills are scarce, meaning that companies cannot find the talent they need to keep growing and remain competitive. At the same time, companies employing under-qualified workers are spending resources in a workforce that is not fit for purpose and incurs additional training and staffing costs. Furthermore, this means that the UK will continue to underperform against other advanced European countries in terms of labour productivity.

What is a skills mismatch?

Skills mismatches arise from the persistent difficulties businesses have experienced in workforce planning, exacerbated by the rapid pace of technological change and shifting consumer preferences. For employers, these issues can reduce their ability to respond to customer needs and adopt new technologies or processes. Gaps in workforce capabilities can also lead to increased workload and stress for employees, having a significant impact on job security, self-confidence, and prospects for career progression in individuals.

In any well-functioning labour market, there will always be some disparity between the skills available and jobs on offer. The UK economy is experiencing something more serious than this. Prolonged shortages are causing problems for businesses looking for staff in certain sectors, particularly in IT: in fact, the number of positions left vacant because employers are unable to find workers with the capabilities or knowledge to fill them has risen by a staggering 130 per cent since 2011.

Skills gaps in IT?

Key skills that are in great demand from recruiters can be found in the engineering sector, and surprisingly – given the perceived deindustrialisation of the economy – there are growing shortages of skilled technicians in manufacturing. Of particular significance is the shortage in the strategic IT and digital sectors, where future jobs and growth lie. Appropriate measures have not been put in place until recently, with the announcement by the government of the creation of 3 million new apprenticeships to deal specifically with the skills and productivity gaps.

However, this will only provide an impact in the long term as apprentices grow in experience and become accustomed to the particularities of the real world and of different workplaces. In the meantime, there are few real alternatives to solving the nation’s shortages other than new approaches to recruitment.

A skilled solution

A solution to the mismatch can be found in a different and innovative approach to recruitment. The development of recruitment tools that enable greater workforce flexibility and allow companies to hire skilled professionals based on immediate needs, even if only on a temporary basis, enables companies to minimise the most immediate effects of the skills mismatch. They can also reduce the overheads that would be incurred by employing a less qualified workforce. At the same-time this prevents highly skilled workers from being misused as they can be employed flexibly through project-based work, permitting companies to gauge their needs in highly specialised skills effectively.

Companies who are tied to traditional workforce structures are often unable to implement business critical projects due to a lack of technical knowledge and staff. In this increasingly divergent market, decision makers must look at other solutions for their staffing problems. Moving towards a more project-based arrangement, businesses can rapidly scale their technical workforce at short notice. This flexible approach will help companies to respond to the challenges of a labour force in which there are persistent mismatches between skillsets and job requirements.

A different approach to recruitment could indeed help address some of the most pernicious aspects that arise from a mismatch in general skills, limiting the losses attributable to mismatches and enabling a flexible workforce to move around depending on business needs. Workers will need to become more agile as the workplace is continuously evolving, and firms will have to make use of new models of recruitment which permit them to access ever scarcer high-value skills. It seems this will be the state of affairs until the country finds a realistic and more permanent solution to the productivity gap, with changes in education and apprenticeships paying off.

Farida Gibbs, CEO and Founder of Gibbs S3

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