The Open University’s latest Business Barometer, which monitors the skills landscape of the UK, has reported that 90% of employers find it difficult to recruit workers with the correct set of required skills in the last 12 months, with managerial roles proving particularly difficult to fill.
One in five of the 300 SMEs and 100 larger businesses studied stated that they struggle to hire senior managers (21%) and mid-level managers (19%). 43% also said they also find that potential candidates lack management skills.
At the same time, around half (47%) of employers say that they are struggling to attract talent with the right IT skills, despite the crucial role digital skills now play in the UK economy.
Due to these factors, the recruitment process is therefore taking longer for three-quarters of employers – an average of one month and 24 days more than expected and as a result, employers are facing significant additional hiring costs, estimated to be at least £1.7 billion, once recruitment fees and temporary staff fees are taken into account.
The study also suggests that this trend is set to rein for the next 12 months.
The UK currently has the lowest unemployment rate since 2005, with those employed reluctant to change jobs due to Brexit uncertainty.
The lack of clarity regarding future immigration rules also proves to be a deciding factor, with some EU nationals nervous to take up roles in the UK. Some companies have tried to overcome these challenges by increasing salaries above market rate to attract top talent.
The Open University has estimated that this costs employers a further £527 million.
The study found that the average increase amounted to £4,150 per hire for SMEs and £5,575 per hire for larger organisations.
Over the next year, employers are planning to change the type of training they offer to their staff, reports The Open University, with some putting a heavy focus on retraining and developing in-house staff skills.
The largest, public distance-learning and research university expects the number of organisations in England offering apprenticeships to nearly double from 31% to 59%. It believes this is most likely as a result of the new apprenticeship levy.
Just over half (52%) of employers in England expect the levy to reduce the skills gap in the next year, with three in five (62%) viewing it as an opportunity for their organisation.
External Engagement Director at The Open University, Steve Hill, said:
“The UK challenge of finding talent with the right skills means that businesses need to look at recruitment, development and retention differently.
”Organisations need an agile workforce that can embrace change and meet new challenges.
“The cost of the skills gap to the UK economy shows it must become a business and government priority to build the skills and capabilities of each individual through investing in talent at all levels.
“The Open University has a number of offerings, such as degree apprenticeships, which help to future-proof UK businesses and enable lifelong learning, as well as enabling greater social mobility by increasing opportunities.”
The full findings of the report will be presented to MPs and Peers at an event in the Houses of Parliament tomorrow, 11 July.
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