Press release

London businesses set to grow but threat of skills shortages still looms

UK Commission for Employment and Skills (UKCES) welcomes signs of growth from CBI and KPMG London Business Survey, but warns against growing threat of skills shortages.

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The UK Commission for Employment and Skills (UKCES) has welcomed new figures showing signs of growth in London, but warns that more businesses need to take action to tackle skills shortages.

Figures in the London Business Survey, launched today by CBI and KPMG, show 62% of businesses in London are planning to recruit this year and two thirds are planning to expand.

The survey also reflects UKCES findings that skills shortages continue to be a problem for some businesses, as almost half of firms (45%) report that not all their staff have the right skills for the job.

The UKCES Employer Skills Survey - which includes interviews with almost 10,000 London businesses – found 26% of employers in hotel and restaurant sectors said some of their staff were not “fully proficient”, along with a quarter of those in the public sector.

The same research shows that employers aren’t able to fill almost a quarter (23%) of all vacancies in London due to a lack of applicants with the right skills.

This means that the number of cases where employers have been unable to fill a vacancy due to skills shortages has more than doubled since 2011 - rising from 14,000 to 30,000 in the capital.

Michael Davis, UKCES Chief Executive, said:

These figures again highlight the enduring threat of skills shortages to business, and show how rapidly the issue can escalate if not tackled head on.

The fact that more employers in London are looking to expand is welcome news. However we must ensure we do not turn a blind eye to the increasing threat of skills shortages.

By taking steps now to ensure employers are training their staff we can make sure we can build strong foundations on which our economic future can grow.

UKCES research also reveals that:

  • Across the UK instances where employers were unable to find job applicants with the skills required accounted for almost a third (30%) of vacancies in professional occupations such as solicitors and IT professionals.
  • Such vacancies also accounted for one fifth (20%) of vacancies in managerial roles.
  • Four in ten (39 per cent) vacancies for skilled trade occupations (such as chefs and car mechanics) are hard to fill due to skill shortages, while in London this figure rises to 53% of all skilled trade vacancies.
  • Almost one fifth (18%) of employers in London are recruiting, above the national average of 15%.
  • Employers in London are less likely to recruit school leavers than anywhere else in England, with just 5% taking on a 16-year-old school leaver.

Read more results from the UKCES Employer Skills Survey.

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(Photo by mariusz kluzniak on Flickr. Used under Creative Commons).

Published 4 September 2014