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The majority of UK businesses are planning a hiring spree over the next 12 months as their growth prospects improve, but nearly two thirds (64%) are concerned that they won’t be able to find the people with the skills needed to fill these positions.

A global PwC survey of over 1,300 CEOs in 68 countries reveals that a quarter of UK business leaders plan to increase their headcount by up to 5% in the next 12 months, with a further 20% planning increases of up to 8% and a further one in five planning increases of over 8%.

But despite the positive outlook for UK jobs, PwC’s research reveals that UK business leaders are more concerned about the availability of key skills than any of their Western European counterparts, rating it as the biggest business threat to their growth plans. Technology and engineering firms report the most chronic shortage of skilled employees.

With the demand for certain skills, such as technology and data analytics, in high demand but short supply, UK businesses are widening their reach to find the talent they need. However, rising labour costs in high growth markets and signs of skilled young workers in China and India starting to favour domestic employers is leading organisations to look to Indonesia, Vietnam and the Philippines for new talent.

Jon Andrews, HR consulting leader at PwC, said: “Despite rising business confidence equating to more jobs, organisations are struggling to find the right people to fill these positions. CEOs believe the gap between the skills of the current UK workforce and the skills their businesses need to achieve growth is widening.

“With two thirds of UK CEOs planning to hire more people in the next 12 months competition for talent will be intense. People with tech-based skills, such as cloud computing, mobile technology and data analytics, will be in strong demand but this is also the area with the biggest skills shortage.

“Business leaders are looking for people with a far wider range of skills than ever before. Gone are the days of life-time careers; chameleon-like employees who apply their skills whenever and wherever they’re needed are now in high demand.

“Businesses need to get out of the mindset that new skills always equals new people. The most successful organisations will combine recruitment with internal mobility and the development of their own people to be more adaptable to its evolving strategy and business environment.”

The research shows that UK business leaders are looking to the Government to do more to help to plug the skills gap. Two thirds of UK CEOs say creating a skilled workforce should be the joint top priority for the Government (alongside ensuring financial sector stability and access to affordable capital). However, only 7% of UK business leaders believe the Government has been effective at achieving this.

In contrast, an overwhelming majority of business leaders (93%) say they need to change their strategy for attracting and retaining talent, but over two thirds of UK businesses haven’t taken any steps to do this yet.

Jon Andrews, HR consulting leader at PwC, said: “UK businesses are laying some of the blame for the skills shortage at the feet of government and legislators, but they should accept that they need to adjust the way they think about and invest in the development of their employees. CEOs should be taking advantage of the new insights that can be gained through advancements in HR data analytics to predict where they can most easily harness the skills they will need and plan for changes in demand and supply.”