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Will the UK economy suffer if the skills shortage isn’t resolved?

Paystream News

Michelle Derungs

Wednesday 12th Feb, 2014

A recent report released by the Chartered Institute of Personnel and Development (CIPD) has highlighted the urgent need for a pro-active rather reactive response to the growing shortage in skilled labour. Currently, the government has turned to short-term solutions in response to the lack of highly skilled labour, further neglecting the growing concern for the future of the UK economy.

The study stated that aside from Spain, the UK currently hosts the highest level of low-skilled labour, pinpointing that 22% of the UK population did required very little education in order to attain work. This is a substantially low percentage compared to the likes of Europe where Germany and Sweden host just 5%.

The report further suggested that if the UK expects to increase productivity and remain competitive with the rest of Europe it needs to invest, not only on the expansion of skilled labour but the further development of skilled workers so that we have a highly skilled, innovative workforce.

The short term resolution to the skills shortage is, in no doubt, highly beneficial for Umbrella and Limited company contractors. Who in turn are vastly becoming a go-to source for skilled labour, giving contractors and freelancers the ability to leverage this with higher pay rate expectations.

Although beneficial for contractors in the short-term, they too will suffer in the future if the UK is not able to remain innovative and stay competitive when it comes to productivity.
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