Escalating skills shortages and increased competition for talent are resulting in three in four (78%) employers reporting recruitment difficulties in the last year, according to the latest CIPD/Hays Resourcing and Talent Planning Survey.

The survey reveals that two-thirds (63%) of organisations are having to look externally in order to meet the changing skills needed in-house. However, equal attention needs to be given to the development of internal staff, to ensure employers are building a skilled and sustainable workforce in the long-term, CIPD warns.

From 520 UK-based HR professionals, the survey found nearly half (45%) of respondents are making efforts to develop more in-house talent. However, almost three-quarters (74%) continue to recruit externally for key talent or niche areas. 44 percent of organisations anticipate an increase in headcount in 2015 in order to meet demands.

Jessica Cooper, Research Adviser at the CIPD, says:

“Organisations are increasingly feeling the pinch when it comes to sourcing key but scarce skills. In the ‘make or buy’ debate, the ‘buy’ decision still seems to predominate investment in talent, but hiring new talent is just part of the solution for addressing skills shortages. Once people are in a role, they still require ongoing development to achieve their full potential and meet ever-changing and critical skills needs. Organisations also need to consider how they can align recruitment activity with an increased focus on internal talent development, in order to build skilled workforces that can easily flex to fulfil future skills needs.”

Managers, specialists and technical staff are the most difficult vacancies to fill, followed by senior managers and directors. Lack of specialist skills and/or industry or general experience prove a common reason for recruitment difficulties.

Barney Ely, director of Hays Human Resources, comments:

“As the economy recovers, it is becoming increasingly difficult for employers to find the professionals they need to take advantage of growth. The fact that 34% of employers are working more closely with their recruitment partners shows that organisations are recognising this challenge and increasing their efforts to attract the right people through a more effective recruitment process.

The survey highlighted a number of approaches that employers would consider to address their recruitment difficulties. Almost half (47%) of organisations are considering targeting candidates who are not looking to move while 43% would consider recruiting those with potential, but without experience, and then equipping these staff with the skills needed by the organisation. It is important that employers start to implement these ideas soon if they are to address the skills gap before it becomes too detrimental to business success.

“With falling unemployment and candidate confidence to move jobs increasing, staff retention is also firmly back on the agenda. Improved pay and benefits is one solution, but it is those organisations which are able to invest in learning and development opportunities in order to retain their most talented professionals and attract new talent that will find themselves at an advantage in a growing economy.”