Could a skills shortage damage the economic recovery?
Nearly three-quarters of British businesses have expressed concerns that a potential skills shortage could damage the economic recovery in years to come.
They fear a lack of qualified workers could ‘slam the brakes on’ and many businesses could struggle as a result, despite the widespread positivity that currently surrounds the economy.
The Prince’s Trust and HSBC survey found that 43% of businesses fear the recovery will slow in the next year, while 35% had concerns it would lead their business to fold.
Such concerns over potential liquidation suggests many businesses may be seeking company insolvency advice in the months ahead, keen to limit any negative impacts on their firms.
The concerns come amid economic growth – the UK economy grew by 0.8% in Q2 – and a return to pre-financial crisis levels in some sectors.
However, the survey revealed that half of businesses polled were having problems filling vacancies, citing a lack of skilled individuals as the major reason.
Some 72% said that recruiting young people would be vital to preventing a skills shortage, especially given the numbers of unemployed youngsters in the UK.
Filling the skills vacuum will be essential across many different sectors in order to progress growth, with businesses urged to take action in the report.
Another measure of the economy – the ICAEW/Grant Thornton business confidence monitor index – has fallen this quarter, with the construction, utilities and IT sectors all struggling to find skilled staff.
This is a point of concern as firms in these sectors can have a significant influence on the UK economy, so a slowing of growth would have knock-on effects.
Given the International Monetary Fund predictions that the UK is expected to be the fastest growing world economy in 2014, such issues with recruitment could have a serious impact.
Tackling a skills shortage is something that has received widespread attention in recent years, while the number of people choosing to do major university subjects is slowing increasing.
However, the concerns raised by these businesses suggest it might be too late for some.
By Phil Smith