‘Skills shortage costing Welsh businesses more than £350m’

BUSINESSES in Wales are reportedly finding it difficult to hire workers with the required skills.

This “skills shortage” is costing Welsh organisations more than £350m, according to a new report commissioned by the Open University.

The Open University Business Barometer, which monitors the skills landscape of the UK, found that 92% of senior business leaders in Wales report difficulties in hiring workers with the required skills.

Over half (58%) report that their organisation has struggled as a result of the skills shortage over the past year.

The shortfall is now costing organisations in recruitment fees, inflated salaries, temporary staff and training for workers hired at a lower level than intended. The report puts that figure at £355m

While just over half (51%) of employers in the UK have been forced to leave a role vacant due to candidates lacking the appropriate skills, the talent shortage is felt more in Wales, with nearly three in five employers (61%) having to leave a position unfilled.

With skills in short supply, nearly three in four senior business leaders in Wales (74%) find that the recruitment process is taking longer – by an average of one month and 25 days. As a result, 70% report spending more on recruitment – a total of £70m more than expected.

While the process is taking longer, when talented workers with indemand skillsets are identified, they are able to take advantage of their strong position, driving employers in Wales to spend an additional £142m on salaries. Nearly half of employers (48%) were obliged to increase the salary on offer last year, typically on five occasions, by an average of £5,265 each time.

Lynnette Thomas, deputy director, strategy and development, at the Open University in Wales, said: “Employers in Wales are spending more than £350m a year on the skills shortage, but buying skills and not building them is a short-term approach which ultimately won’t pay dividends.

“It is crucial that organisations take a more sustainable approach, using training to address their skills gaps from within and reducing their spend in the long term.”