With record numbers in employment and ever increasing job vacancies being posted by employers, the UK’s growth prospects are looking good and leaders are optimistic about the future. A big challenge to this growth though is the huge skills crisis that is impacting all organisations.
This crisis is not just about a skills shortage but a mismatch between the current skills base and the requirements of the role to meet business objectives now and in the future. This not only holds back growth but also impacts productivity.
Many UK business leaders believe that the current skills challenge and our research found that 88% of C-Level executives, said that they are suffering from a skills shortage and almost all of these think that this is having a negative impact on growth.
These views are closely matched within their own organisations. 74% state they have a skills problem within their business and, of these, 91% think it is holding their business back from growth. Many of the organisational heads we questioned have a good insight into the talent base and skill requirements within their own companies. Of those questioned, 86% are able to identify which skills are in short supply and this insight is key to being in a strong position to hire the right talent to meet their needs.
But, for some, the belief that there is a skills crisis within their business is based on gut feel alone. In fact, one in seven businesses (14%) are unable to assess where the main skills challenges lie and one-fifth (21%) have no initiatives in place to address their crisis internally. This failure to identify the skills gap within their organisations means companies are left unable to recruit the right skills and this can have a huge impact on productivity which in turn restricts growth.
When it comes to hiring new talent, many CEOs, almost three-quarters (73%) of those questioned, are struggling to recruit the right people with the right skills. And, in a desperate attempt to fill vacancies, seven in ten (70%) admit to making compromises in their employee hires. Whilst this approach results in filling vacant positions it means they are not necessarily bringing the right talent on board and this can have a negative impact on productivity growth. However, with programmes in place, organisations can diversify their skills base and three-quarters of those questioned are actively doing this.
Whilst recruitment is challenging, some businesses are also unaware of their current employee attrition rates. Almost one in three (27%) say they don’t know how fast they are losing staff. And, for those that do, 30% have no idea whether this is good or bad compared to their industry peers.
But, it’s not all doom and gloom when it comes to the skills crisis. HR departments are increasingly viewed as having a key role to play in helping UK businesses overcome the current skills crisis.
Of the business leaders questioned, more than half (54%) say they feel their HR department has a clear impact on the development and delivery of their overall business strategy.
The vast majority of firms (86%) know which skills are in short supply and are taking positive steps to identify, track and develop existing talent within their business.
Three-quarters already have a programme in place to do this.
Businesses are also looking at how they address employee attrition with 63% saying they have developed initiatives to tackle staff churn.
Many businesses – 75%, are confident that their employee proposition is strong enough to attract the right people. One of the key areas here is the ability to respond to the demand for more flexible employee contracts.
Firms are seeing increasing requests for: More flexible working
CEOs agree that this more flexible approach to contracts is helping to attract the right people and skills. With such initiatives in place, three-quarters of those questioned report that they believe their organisational approach to HR is helping them to attract the right talent to their organisation.