Skills shortages are damaging Britain's 'fragile' economy 

A survey of more than 1,000 London business leaders and HR managers, carried out by BusinessLDN, found that three-quarters of firms (77%) are reporting open vacancies and of those two-thirds (65%) are struggling to fill them.

Vacancies span from specialist rolls, skilled and managerial jobs the toughest to recruit.

Skills most in demand are sector-specific technical skills, transferable skills, such as negotiation, and basic digital skills, with the latter expected to be most sought after in the future.

The biggest challenge to recruitment is a low number of suitable applicants with the required skills, the survey said, cited as a problem by 57% of firms, followed by competition from other firms (40%), lack of flexibility on offer (37%), the job entailing anti-social hours (31%) and a general lack of interest in the role (31%).

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Of those who had a lack of suitable applicants, almost two-thirds pointed to candidates’ lack of “soft skills” such attitude, motivation, or personality (64%), while a similar percentage cited their lack of experience for the role (62%) and almost half lacked the right qualifications (47%).

While two-thirds of firms (66%) say their existing workforce has the right skills and capabilities to meet their business’s needs, the remainder report gaps. Of the latter, respondents report gaps in the following skills: technical (58%), cross-cutting skills, such as negotiating (42%), basic digital (42%), basic maths (23%), English (21%) and green (21%).

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BusinessLDN Chief Executive John Dickie said more needed to be done to allow workers to acquire in-demand skills.

He said: “With most businesses running vacancies they can’t fill, it’s vital we unlock the full potential of the capital’s workforce by giving Londoners the skills employers need – whether they are already in work or not.

“Firms are struggling to recruit across all types of roles, from entry-level posts right through to technical experts, with sector-specific and digital skills most in demand.

“With the majority of companies looking to increase investment in training, the Government can help ease the current crunch by making existing programmes easier to navigate, providing more online and short modular courses and ensuring current spending is targeted on developing the competencies they need now and, in the future, especially in digital and green skills.”

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In terms of barriers to investing in training, among the issues firms highlight in the survey are cost (47%), time available (42%), relevance or quality of training (40%) and knowing where to find the right training (34%). 

Several ways to boost training are suggested by respondents, including greater availability of online provision (47%), more courses co-created with employers (38%), more shorter modular courses (38%), government provision being easier to understand (37%), tutors with up-to-date knowledge of industry (36%), tax breaks to offset the cost of training (34%), help with finding training providers (33%) and more responsive training providers (31%).

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Anneka Hendrick, CBI London Regional Director, said: “In order to help drive growth and productivity across London, it is vital that our skills system meets the needs of employers.

Richard Burge, Chief Executive Officer at the London Chamber of Commerce and Industry (LCCI) said: “It is crucial for Britain to invest in hiring employees with the right skills and talent, as they boost productivity and drive economic growth of our country.

"As reiterated by London businesses in LCCI’s quarterly Skills Survey, skills shortages not only stunt business growth and affect employment but also have long-term implications for the future of our young professionals. In an environment where demand is outpacing supply, skilled workers are the backbone of our fragile economy."