August 08 ,2014 | by Hari Sri

Skills shortage could hinder UK economy recovery

UK economy recovery

A new report from The Prince’s Trust says that the UK is perilously close to a recruitment crisis owing to a serious skills shortage.

A serious skills shortage is expected to take hold in the UK in the next few years, according to a new report from The Prince’s Trust and HSBC.

The Skills Crunch report finds that as many as 73 per cent of UK businesses believe a skills crisis is going to take hold in the country in the next three years. Worryingly, some 43 per cent even suggested that this would happen in the next 12 months, which suggests many are already feeling the pressure.

What’s more, the implications of these shortages could be serious for the UK economy.

 

The outlook is actually positive for British businesses at the moment – 72 per cent said that they were optimistic about their prospects in the coming year, while six out of ten said their firms were growing more quickly than they had in the previous year.

But two-thirds of business leaders said that quicker growth would create skills shortages within their organisations and of these, three out of five said this could hamper their financial growth. Worse, over a third said skills gaps could potentially cause their companies to fold. As many as eight out of ten said they felt that skills shortages would restrict UK economic growth in the next three years.

The Prince’s Trust argues that investing in the skills of young people to prepare them to fill the void is the only genuine solution.

“It is deeply concerning that employers are struggling to fill vacancies when we have hundreds of thousands of unemployed young people desperate for work,” says Martine Milburn CBE, chief executive of the charity.

“The current economic recovery is encouraging, but in order to sustain this growth, UK plc needs to invest in the next generation to avoid a skills vacuum in the future, which threatens to hamper economic growth.”

 

Nearly three-quarters of employers said they felt hiring young people would be crucial to avoid falling into a skills crisis, while two-thirds acknowledged that spending more on the right training would enable these young workers to fill those gaps more effectively.

“We know that unemployed young people want to work and that employers have vacancies they want to fill,” added Ms Milburn in her foreword to the report.

Hari Sri

Hari is the LSBF Blog's News Editor. He manages the editorial content on the blog and writes about current affairs, SME, entrepreneurship, energy, education and emerging market news.

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