Hiring spree ‘threatens to cause skills shortage’

Bullish plans by employers to hire more staff next year could lead to a skills shortage in areas ranging from engineering to management, recruiters have warned.

Hiring spree ‘threatens to cause skills shortage’

A dearth of suitable recruits could “cast a shadow” over the employment market at a time when businesses are showing signs of greater confidence about the future, the Recruitment and Employment Confederation believes.

More than eight in ten employers think that economic conditions are improving and more than four in ten will be more confident about hiring staff, according to the REC’s latest JobsOutlook survey. Eighty-six per cent of employers expect to take on more permanent staff in the next three months, while 78 per cent said that hiring was on their agenda for the medium term, according to the survey.

However, that could lead to a recruitment crunch at a time when unemployment is at its lowest rate since January 2006 at 5.2 per cent and with vacancies at a record high of 747,000, according to the latest Office for National Statistics data. Employers may find it increasingly difficult, therefore, to fill new positions with suitable staff.

The latest JobsOutlook report highlights engineering, professional and managerial, driving and distribution and construction as skills that are particularly hard to find.

Tom Hadley, the confederation’s director of policy, said that 2015 had been “a vintage year for the labour market. Employers are confident, hiring has been steady and pay has increased for many people as the benefits of economic growth filter through.

“The outlook for 2016 is similarly rosy, with many private sector businesses seeking to build upon a successful year by expanding their capacity to take on more work and also by improving productivity. This should mean even more opportunities for people with the right skills.”

Nonetheless, he added, “major challenges are just around the corner . . . The introduction of the national living wage, uncertainty around the European Union referendum outcome and skills shortages that are getting worse in many industries all have the potential to knock employers off their stride.”

The proportion of employers reporting they have a “considerable” amount of spare capacity has remained static at 0 per cent throughout 2015, while the proportion of businesses saying that they have made employees redundant in the preceding 12 months has fallen from 9 per cent at the end of 2014 to 5 per cent in the final report of this year.

More than 40 per cent of start-up businesses surveyed recently by the Institute of Directors’ 99 network, made up of young entrepreneurs, said that they had struggled to hire people with the right skills, while 39 per cent said that they had difficulty accessing financing, which was preventing the growth of companies.

Bullish plans by employers to hire more staff next year could lead to a skills shortage in areas ranging from engineering to management, recruiters have warned.

A dearth of suitable recruits could “cast a shadow” over the employment market at a time when businesses are showing signs of greater confidence about the future, the Recruitment and Employment Confederation believes.

More than eight in ten employers think that economic conditions are improving and more than four in ten will be more confident about hiring staff, according to the REC’s latest JobsOutlook survey. Eighty-six per cent of employers expect to take on more permanent staff in the next three months, while 78 per cent said that hiring was on their agenda for the medium term, according to the survey.

However, that could lead to a recruitment crunch at a time when unemployment is at its lowest rate since January 2006 at 5.2 per cent and with vacancies at a record high of 747,000, according to the latest Office for National Statistics data. Employers may find it increasingly difficult, therefore, to fill new positions with suitable staff.

The latest JobsOutlook report highlights engineering, professional and managerial, driving and distribution and construction as skills that are particularly hard to find.

Tom Hadley, the confederation’s director of policy, said that 2015 had been “a vintage year for the labour market. Employers are confident, hiring has been steady and pay has increased for many people as the benefits of economic growth filter through.

“The outlook for 2016 is similarly rosy, with many private sector businesses seeking to build upon a successful year by expanding their capacity to take on more work and also by improving productivity. This should mean even more opportunities for people with the right skills.”

Nonetheless, he added, “major challenges are just around the corner . . . The introduction of the national living wage, uncertainty around the European Union referendum outcome and skills shortages that are getting worse in many industries all have the potential to knock employers off their stride.”

The proportion of employers reporting they have a “considerable” amount of spare capacity has remained static at 0 per cent throughout 2015, while the proportion of businesses saying that they have made employees redundant in the preceding 12 months has fallen from 9 per cent at the end of 2014 to 5 per cent in the final report of this year.

More than 40 per cent of start-up businesses surveyed recently by the Institute of Directors’ 99 network, made up of young entrepreneurs, said that they had struggled to hire people with the right skills, while 39 per cent said that they had difficulty accessing financing, which was preventing the growth of companies.