Will the UK skills shortage continue to be a problem throughout 2017?

Monday 27th February, 2017
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Industry news

As we enter into March, the government's triggering of Article 50 of the Lisbon Treaty to begin the official process of Britain leaving the European Union draws ever nearer, as prime minister Theresa May has said this will happen before the end of next month.

But how are businesses feeling about the fast approach of Brexit, particularly in terms of the impact it will have on their ability to hire workers with the level of skills they require?

Towards the end of last year, many reports from across the UK's recruitment markets showed that more opportunities for limited company contractors, freelancers and other workers willing to take on short-term contracts were being advertised.

This highlighted a growing trend of businesses taking on temporary workers because they were hesitant to hire permanent staff in light of the outcome of the EU referendum, which was of course good news for contractors, and for organisations wanting to avoid succumbing to the skills shortage.

Businesses seemed to be in a pretty good position in terms of contractor hiring as 2016 drew to a close, so just how much of a problem will the country's skills shortage be during the remainder of 2017?

Are businesses worried about the skills shortage?

According to a report published by the Institute of Directors (IoD) at the end of last year, four in ten recruiters in the UK are concerned that they will not be able to fill vacancies once the post-Brexit era begins due to the skills shortage.

However, 60 per cent of the 844 business leaders questioned by the IoD said they were feeling positive about the 12 months ahead and were not too worried about the impact of Britain formally leaving the EU on their hiring plans.

In addition, many were feeling optimistic about the economy over the coming year, which further suggests that recruitment plans will not be affected too much.

Simon Walker, director-general of the IoD, called on the government to provide "clarity on a long-term skills strategy" so that businesses know exactly where they can expect to source more workers from in the future, especially because it is not yet known how foreign workers' immigration statuses may be affected post-Brexit.

Mr Walker added: "Business will now look to government to lay the groundwork for growth and, considering the skills shortage revealed in this survey, they should start by guaranteeing the status of EU citizens currently working for British businesses."

How contractors can do their bit to mitigate the skills shortage

While the majority of hirers are feeling relatively positive about hiring over the course of 2017, it is still important for contractors and freelancers to be doing their bit to mitigate the skills shortage in order to prevent it from becoming even more of a problem.

For example, contractors should ensure that they are taking the time to upskill themselves by gaining extra experience by either attending training sessions or relevant seminars. If you are a limited company contractor and you find that a lot of your time is used keeping on top of your limited company admin, then you should consider engaging the services of a limited company provider such as PayStream.

Our limited company service, My PSC, provides a safe pair of hands to help you with your limited company admin and advise you when needed, leaving you to get on with what you do best - all safe in the knowledge that you've got the most tax-efficient service.

If UK-based contractors take this kind of action and make themselves valuable to organisations, recruiters won't necessarily have to look towards hiring workers from elsewhere in Europe, subsequently taking away the worries surrounding immigration laws as well.

As a result, the UK's economy should be boosted in the long term, which could potentially lead to even more job creation and opportunities for contractors.



According to a report published by the Institute of Directors (IoD) at the end of last year, four in ten recruiters in the UK are concerned that they will not be able to fill vacancies once the post-Brexit era begins due to the skills shortage.

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Wednesday 1st March, 2017
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Posted by Michelle Derungs
Each month we highlight key points taken from REC's Jobs Outlook Survey to bring you the latest contractor market trends.