Professional services firms are spending an extra £230m to overcome a worsening skills shortage that could have 'potentially damaging' consequences for the UK economy, according to a study by academics.
The Open University has been investigating the extent and nature of the skills shortage, collating data from 950 senior business leaders. Its Business Barometer report, published today, shows that organisations across 15 sectors are spending £6.3bn on temporary workers, recruitment fees, inflated salaries and training.
At least six in 10 respondents admitted a skills shortage in their workplace. A similar proportion said their organisations have struggled as a result, either financially or in terms of resource. Six in 10 think the skills shortage has worsened in the last 12 months.
Four in five employers in the north east are currently suffering from a skills shortage. However, south west businesses are 'feeling the pinch the most', with three-quarters of business chiefs admitting their organisation has struggled in the last 12 months.
Over half of respondents think the skills shortage will worsen after Brexit. Many think the government will introduce taxes on employing foreign staff. The report states that such a tax might encourage organisations to build talent from within the business rather than buy it from outside.
David Willett, corporate director at The Open University, observed a current emphasis on buying skills in from the outside, but warned that the 'quick fix' is unsustainable. Willett urged business to embrace work-based training and apprenticeships.
The government's apprenticeship levy ring-fences funding for employers to spend on apprenticeship training. The levy is imposed on businesses in England with wage bills of more than £3m a year. In the legal profession, apprentices are split into three different funding bands: paralegal (£9,000); chartered legal executive (£12,000); and solicitor (£21,000).
Willett said: 'Following a number of teething issues with the newly created Institute for Apprenticeships and criticism of course flexibility, the uptake has been lower than expected. However, it is crucial that organisations embrace and access this funding now, or they risk losing it altogether.'