Hays : As UK skills gap threatens to become a skills chasm, ensuring employability of graduates is crucial

• Skills gap has worsened by 8 per cent in the UK and 14 per cent in Europe over the last five years
• Wage pressures have risen in the UK as businesses battle to secure top talent
• Ensuring that graduates possess the right skills to make them employable to businesses will be crucial

A skills chasm has emerged as the skills gap worsens for a fifth consecutive year. Businesses continue to struggle to find and attract the right talent, with the lack of skills threatening business growth and further jeopardising productivity in the UK. According to a new report from Hays plc, the global professional recruiting group, the skills gap has worsened by 8 per cent in the UK, contributing to dismally low productivity levels.

These are the key findings of the fifth Hays Global Skills Index 2016, a report published today by Hays in collaboration with Oxford Economics. The report is based on an analysis of professional employment markets across 33 major global economies.

The recovery of the global economy means good news for employment levels, but without addressing the skills shortage, businesses are struggling to find the right talent and continue to suffer from low productivity levels. This is particularly acute in the UK, which now has the biggest gap compared to other leading Western economies since records began in the early 1990s.*

These shortages in the UK are particularly prevalent in technical engineering and specialist technology roles, with businesses struggling to attract sufficient numbers of qualified and skilled workers, impacting productivity and business growth. Those with the right skills are therefore in high demand, with the report revealing that wage pressures have risen in Europe over the past year, and significantly in the UK over the past five years, as employers are being forced to pay more for the right candidates.

One of the fundamental issues exacerbating the skills gap is the number of graduates possessing inadequate skills for the jobs available. In the UK, more than half of graduates are working in non-graduate roles due to the fact that their degrees offer neither the technical nor vocational knowledge that businesses are seeking. Tackling this increasing mismatch between market demand and supply of skills from local graduate talent may be the first step to solving the skills crisis, and this needs to be addressed by educational institutions, employers, governments or the graduates themselves.

Commenting on the findings of the report, Alistair Cox, Chief Executive, Hays plc said:

'As we see the global economy in a slow recovery, the global labour market is now facing huge pressure to fill the growing skills gap. The issue is particularly severe in the UK. What was previously a worrying skills gap is fast becoming a skills chasm. While there is a degree of current uncertainty in the UK market, wider pressures have been impacting the labour market for some time.

'There is an acute lack of graduates and trained professionals with the right skills to fill open posts and too little is being done to incentivise courses and training in subject areas that are notoriously short on skills. Equally, not enough is being done by the government to make it easier for businesses to access talent in the specific areas they need to recruit.

'Now more than ever we need to ensure we have the talent required to steer ourselves through this skills gap. Success depends on our employers, educational institutions and governments providing the tools and opportunities for young people and old to equip themselves with these much-needed skills. If steps are not taken to address this, we will waste our resources, businesses will underperform and the economy will be put at further risk.'

*http://www.ons.gov.uk/economy/economicoutputandproductivity/productivitymeasures/bulletins/internationalcomparisonsofproductivityfinalestimates/2014

Notes on methodology

This years' Hays Global Skills Index is entitled 'The Global Skills Landscape, a complex puzzle' and can be found online here: www.hays-index.com

The Hays Global Skills Index provides a score for each country of between 0 and 10 which measures the pressures present in its labour market. The score is calculated through an analysis of seven equally weighted indicators, each covering different dynamics of the labour market, such as education levels, labour market flexibility and wage pressures.

An overall score of above 5.0 indicates that the labour market is 'tighter' than normal. A score below 5.0 indicates the market is 'looser' than normal. Within these overall scores, however, the scores attributed to each of the seven indicators can vary significantly, highlighting the different dynamics and pressures faced by each country.

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