Skill shortage scuppering business growth

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A new survey out this week has revealed a massive 20 per cent of job vacancies in England remain unfilled because of a lack of skilled applicants.

The study, by the Learning and Skills Council, found almost half of employers reporting skills shortages and losing business to competitors as a result.

In addition, skills gaps within employers' existing workforces were also a significant problem with 22 per cent saying their staff were not up to scratch and a further 30 per cent said they had higher operating costs as a consequence.

Over a fifth of these employers said they lost orders because of a lack of skills with quality and customer service also significantly affected - the problem was even more acute with smaller businesses.

Another consequence of the skill shortage was a threat to innovation with 36 per cent saying a problem filling job vacancies had delayed the development of new products.

According to research by Ernst & Young, industry losses through lack of basic skills are as high as £10bn annually and costs a typical business with 50 employees around £165,000 a year.

This also means output per hour worked is around 30 per cent higher in the US, France and Germany than in the UK and up to a fifth of the productivity gap between the countries was as a direct result of lower skills levels in the UK.

Mark Haysom, chief executive of the Learning and Skills Council, said the survey was all about listening to and understanding, the needs of business.

"To remain competitive both nationally and internationally, English businesses must be strategic about staff training and development.

"This survey will allow us to better identify those specific areas most in need of investment and continue to work with employers to develop solutions - we need businesses to recognise the issues at stake here and work in partnership with us," he said.