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Round-up of the week

Posted on 29th January 2016

Employers keen to hire more permanent staff

The majority of employers want to boost their permanent workforce in the near future, a new survey has revealed.

According to the Recruitment and Employment Confederation (REC), 83 per cent intend to take on more permanent staff in the next three months.

This reflects a wider improvement in sentiment, with 80 per cent saying economic conditions are getting better, and 94 per cent operating with limited capacity to take on extra work.

Tom Hadley, director of policy at the REC, commented: "Businesses want to hire so that they can take on more work, but with fewer candidates available, employers need to take a thoughtful approach to bring in the skills they need."

For example, it pointed out that workers are increasingly seeking flexibility in their job. As a result, employers could gain an edge over rival firms by offering people the chance to fit work around other commitments.

Skills shortages on the up

The number of jobs being left unfilled because of skills shortages rose by 130 per cent between 2011 and 2015.

According to the latest UK Commission for Employment and Skills (UKCES) Employer Skills Survey, so-called skills shortage vacancies now account for almost a quarter of job openings in the UK.

Whereas the figure had stood at 91,000 in 2011, it had reached 209,000 by 2015.

This is proving to be a particular issue in the financial services sector, as it saw the sharpest rise in skills shortages throughout this period.

Lesley Giles, deputy director at the UKCES, commented: "With global competition intensifying, the UK urgently needs to boost its productivity. To do that, we need people with the right skills."

Douglas McCormick, a commissioner at UKCES, added that while the UK has seen "exceptionally strong" job creation in recent years, this has been accompanied by stalling productivity levels.

Business community responds to UKCES report

The figures showing the extent of skills shortages in the UK have prompted a response from major business groups.

The CBI noted that while the UK is "holding steady" in the face of global uncertainty, the business need for people with the right skills and capabilities is continuing to grow.

Neil Carberry, director for employment and skills policy at the body, commented: "The positive picture on hiring shows the need to close the skills gap which is having a direct impact on UK firms’ ability to compete, particularly in high-growth sectors. "

Mr Carberry went on to state that businesses are putting more time and money into training and developing their staff.

Nevertheless, he believes the apprenticeship levy might "act as a disincentive by increasing the cost of taking on apprentices".

He insisted that if the levy is going to work at a time when demand for skills is growing, it must have the flexibility for companies to "continue to train according to business and industry need".

The British Chambers of Commerce, meanwhile, stated that the UKCES report has highlighted what the business community has "been saying for some time".

Dr Adam Marshall, executive director of policy at the body, said the shortage of skills is preventing businesses from reaching their full potential and hitting productivity.

This, he said, means firms need "support to invest in existing staff, while working together with schools to bridge the gap between education and employment".

Dr Marshall warned that politicians and businesses cannot afford to ignore this issue, but acknowledged there is "no easy fix".

To discuss conditions in the labour market further, speak to one of our experts here at The Maine Group!