Employers paying more to recruit new staff

According to research from The Open University, the skills gap is costing UK businesses more than £2 billion a year in higher salaries, recruitment costs and temporary staffing.

The Open University Business Barometer, which monitors the skills landscape of the UK, has found that employers have had to inflate salaries to attract talent above market rate, costing at least £527 million alone.

With 90 per cent of employers having found it difficult to recruit workers with the required skills in the last 12 months, the research also revealed that the recruitment process is taking longer for 75 per cent of employers, creating additional costs in the form of recruitment fees and hiring temporary staff, estimated to be at least £1.7 billion.

Additionally, 56 per cent of businesses had to increase the salary on offer for a role well above market rate to get the skills they required in the last 12 months. The average increase amounted to £4,150 per hire for SMEs and £5,575 per higher for larger organisations. A further 21 per cent of respondents reported difficulty in filling managerial roes, with 43 per cent finding candidates are lacking managerial skills.

To combat this trend, employers are expected to change the type of training they offer to their staff, with the number of organisations in England offering apprenticeships expected to nearly double from 31 per cent to 59 per cent. This is likely due to the new apprenticeship levy, introduced in April.

Steve Hill, external engagement director at the university, said: “The UK challenge of finding talent with the right skills means that businesses need to look at recruitment, development and retention differently. Now faced with a shrinking talent pool, exacerbated by the uncertainties of Brexit, it is more important that employers invest in developing their workforce.

''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.”