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Skills shortages are shackling firms, says IoD
According to the latest skills survey from the Institute of Directors (IoD), the growth of nearly 60% of businesses is being held back by a lack of skills in the wider workforce and among existing employees.
The IoD is calling on the government to improve the overall business environment by scaling back business taxes and employment regulation so that firms have more resources to invest in training.
The IoD survey found that 31% of employers were struggling to fill vacancies in their workforce. Respondents said that this was primarily due to a shortage of applicants with the required skills: 74% of those with hard-to-fill vacancies blamed a lack of candidates with the appropriate skills, qualifications or experience. The survey found the hardest skills to source were technical skills, management and leadership skills, and customer service skills.
47% of the directors surveyed said that some of their organisation's employees lacked the skills needed to do their job to the required level. On average, organisations reporting skills gaps estimated that 24% of their employees lacked the skills they required. Organisations affected by skills gaps identified management skills and leadership skills as being in particular need of improvement.
According to the survey, employee skills gaps are wreaking considerable damage on businesses. 58% of employers reported that skills gaps were holding back the growth of their firms. This damage also comes in the form of higher operational costs (reported by 32% of respondents), compromised quality (34%), lost orders (25%), stifled innovation (33%) and increased workloads for other employees (61%).
The survey found that 94% of IoD members' organisations are investing in training. Assessing the impact of the recession, 72% of those organisations providing training said expenditure on training per employee had either stayed the same (52%) or increased (20%). 22% said it had decreased.
Commenting on the survey results, Miles Templeman, director-general of the IoD, said: "It is disturbing that at a time of economic weakness, the growth of the private sector is being held back by skills shortages. Businesses want to invest in training and are doing so on a large scale already, but they would invest even more if the Government took some radical steps to deliver a better overall business environment.
"Excessive employment regulation and an uncompetitive tax system effectively eat up resources that businesses could use to fund training. The Government needs to put more emphasis on sorting out these problems if it wants to tackle skills shortages. The biggest barrier to greater employer investment in training is a lack of resource, not a lack of law."
The full survey is available as a .pdf file on the IoD website
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