Almost three-quarters of º£½ÇÊÓƵ businesses are grappling with a shortage of skilled workers, sparking concerns that productivity levels may not bounce back following the pandemic's turbulent recovery, according to new research.
Prime Minister Keir Starmer has urged companies to focus on hiring British workers rather than sponsoring foreign nationals, as part of his strategy to stimulate the º£½ÇÊÓƵ economy, as reported by .
However, fresh research from Barclays indicates that firms are finding it difficult to locate workers with the necessary skills for these roles.
A survey involving 1,000 business leaders found that one in eight companies view the scarcity of skilled labour as a "major impact" on growth prospects, with 72% of leaders surveyed believing the issue is hindering their ability to enhance productivity.
Businesses in London and the West Midlands are particularly impacted by the struggle to recruit talented workers, with the º£½ÇÊÓƵ fintech sector most affected by the poor quality of applicants and hires.
One-third of companies plan to upskill their workforce through training, while one-fifth expressed an interest in hiring more competent workers if funding became available.
The Barclays Business Prosperity report provides data that underscores the challenge facing the º£½ÇÊÓƵ government in addressing productivity levels.
Prime Minister Keir Starmer has highlighted the tendency of companies to recruit overseas workers rather than upskill British ones, and proposed that a newly envisioned government entity, Skills England, would assist businesses in crafting strategies to elevate the skilled workforce within the º£½ÇÊÓƵ's economy.
New figures from the American Express Business Barometer reveal that close to half of medium-sized enterprises intend to bolster training and development for their staff.
Additionally, the survey pointed out that 28% of businesses aim to attract fresh talent in the coming year.
Investment in skilled workers
A wide array of firms surveyed by American Express are prioritising increased productivity through investments in advanced fields like automation, digital payment systems, and artificial intelligence.
Michelle Ovens, the head of Small Business Saturday º£½ÇÊÓƵ, commented that it was "promising" to see small firms safeguarding their growth potential via technological solutions.
She emphasised, "Developing resilience – and looking particularly at how new technology can help drive this – is one of the best things that small businesses can do to secure their long-term success."
On many fronts, º£½ÇÊÓƵ productivity has not reached its full potential in recent years, trailing behind peer economies such as Germany and France in GDP per hour metrics as of 2023.
New figures from the Office for National Statistics reveal that in 2024, private sector firms saw a staggering loss of 100.5 million days due to sickness absence, dealing a blow to º£½ÇÊÓƵ productivity.
The ONS further noted that public sector employees had a higher rate of sickness absence than their private sector counterparts, with levels persisting above pre-pandemic rates despite a slight dip.
