Exclusive: London businesses shelve growth plans amid gaping skills gap
London businesses are being held back by a shortage of staff who have the skills to excel in roles, exclusive research for City PM has found.
Just over three in four firms in the capital are running into roadblocks when trying to find staff who have the necessary knowledge to propel their business, according to research from the Open University and the British Chambers of Commerce (BCC).
Difficulties finding appropriate staff is making existing staff less productive and less motivated, with the organisation’s analysis finding 71 per cent of companies in London are heaping more work on staff.
Across the UK, 73 per cent of businesses are grappling with skills shortages, leaving around four in 10 businesses shelving growth plans.
“Skills shortages are biting hard, damaging businesses and holding back our economic growth,” Jane Gratton, head of people policy at the BCC, said.
Separate research out yesterday from Wall Street investment bank Goldman Sachs found that Brexit has fashioned imbalances in the UK labour market by curbing the flow of workers from the continent.
“Sectors that used to see the highest inflow of EU workers have also seen the largest increase in vacancy rates,” analysis at the firm said in a note to clients.
A big upsurge in non-EU national migrants heading to the UK helped push net migration to a record high 606,000 last year, up from 329,000 in 2015.
However, Goldman noted that the skills this new group of migrants are bringing to the UK are not those demanded by firms, leading to mismatches in the jobs market.
A rise in the volume of people who are out of work and not looking for a job – known as economically inactive – since the beginning of the Covid-19 crisis has amplified tightness in the labour market.
Historically low unemployment of 3.8 per cent has generated fierce competition between businesses to lure candidates.
The UK’s “skills shortage has not improved, despite the existing efforts from organisations across the UK. We haven’t solved it yet,” Martha Lane Fox, chancellor at the Open University and president of the BCC, said.