Hiring plans at risk due to skills shortages, finds PwC report

Two thirds of UK businesses fear that their hiring plans could be derailed because they won’t be able to find the people with the skills they need, according to a survey by international professional services firm PwC.

Tue, 20 May 2014Two thirds of UK businesses fear that their hiring plans could be derailed because they won’t be able to find the people with the skills they need, according to a survey by international professional services firm PwC.

The survey of over 1,300 chief executive officers in 68 countries reveals that a quarter of UK business leaders plan to increase their headcount by up to 5% in the next 12 months, with a further 20% planning increases of up to 8% and a further one in five planning increases of over 8%.

However, the research reveals that UK business leaders are more concerned about the availability of key skills than any of their Western European counterparts, rating it as the biggest business threat to their growth plans. Technology and engineering firms report the most chronic shortage of skilled employees.

The research finds that with demand for certain skills, such as technology and data analytics, in high demand but short supply, UK businesses are widening their reach to find the talent they need. However, rising labour costs in high growth markets and signs of skilled young workers in China and India starting to favour domestic employers is leading organisations to look to Indonesia, Vietnam and the Philippines for new talent.

Jon Andrews, HR consulting leader at PwC, says: “Businesses need to get out of the mindset that new skills always equals new people. The most successful organisations will combine recruitment with internal mobility and the development of their own people to be more adaptable to its evolving strategy and business environment.”

The research shows that UK business leaders are looking to the government to do more to help to plug the skills gap. Two-thirds of UK CEOs say creating a skilled workforce should be the joint top priority for the government (alongside ensuring financial sector stability and access to affordable capital). However, only 7% of UK business leaders believe the government has been effective at achieving this.

In contrast, an overwhelming majority of business leaders (93%) say they need to change their strategy for attracting and retaining talent, but over two-thirds of UK businesses haven’t taken any steps to do this yet.

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