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Businesses hampered by skills shortage

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Some six out of ten firms say that a lack of skills is holding back their ability to develop and grow.

The figures come from the latest skills survey carried out by the Institute of Directors (IoD).

According to the survey, a third of respondents (31 per cent) were struggling to fill workplace vacancies. The main cause was a shortage of applicants with the requisite skills, with almost three-quarters of hard-to-fill positions blamed on a lack of candidates with the necessary qualifications or experience.

Even more significant than skills-related recruitment difficulties were skills weaknesses in existing workforces. On average, firms reporting skills gaps estimated that 24 per cent of their employees lacked the skills needed to carry out their duties to the appropriate level.

Overall, some 58 per cent of respondents to the poll said that skills gaps and shortages were having a negative impact on the ability of their firms to grow and develop.

The effects could be seen in the form of higher operational costs (32 per cent), compromised quality (34 per cent), lost orders (25 per cent), stifled innovation (33 per cent) and increased workloads for other employees (61 per cent).

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.”