Yorkshire and Humber businesses spend £400m on ‘skills gap’
More than half of employers in Yorkshire and Humberside have struggled to find the right skilled workers over the last 12 months, according to an annual report published today.
The Open University Business Barometer 2019 has examined the cost of the skills shortage. Its analysis has found that recruitment fees, inflated salaries, temporary staffing and hiring at a lower level to build skills internally set organisations in the region back £400 million over the past year.
The same report notes that organisations have reported a 166% increase in spending on recruitment fees in the last 12 months as they try to attract talent.
And seven in ten (70%) of employers in Yorkshire and Humberside said they have struggled to find skilled workers this year, with Brexit uncertainty making talent scarcer.
More than a third of businesses (36%) hired temporary staff to plug gaps, while 33% spent more than intended on recruitment fees.
Others (40%) increased salaries in order to make roles more attractive, and just over a third (36%) were forced to hire at a lower level than intended.
The skills shortage comes as the UK employment rate stands at the highest level since 1971, while unemployment is at its lowest since 1974.
David Willett, Corporate Director at The Open University, said: “It’s encouraging that employers are looking to invest in the talent of their existing workforce, with businesses increasingly turning to strategies that will serve their skills requirements for the years to come.
“While many are starting to focus more on building up skills from within, rather than buying them in, it is essential that training ultimately delivers results, while fitting around employees’ existing commitments.
“Current uncertainties may see businesses understandably focusing on the short term, but initiatives like work-based training are essential for those looking to remain agile and competitive throughout in a rapidly changing business environment.
“Training, such as apprenticeships, provides a long-term solution to UK business looking to adapt to challenges on the horizon such as Brexit, digitisation and new technologies.”
The business barometer report for Yorkshire and Humberside points out that while recruitment spending is on the rise, there is also a greater focus on re-training existing staff, with 49% of organisations increasing their training and development budgets in the past year – by an average of 9%.
Less than 1% of employers in the region think Brexit will open up new growth opportunities for their organisation. And four in five (79%) senior business leaders agree the skills shortage will worsen after the UK officially leaves the European Union.
