8 January 2016

  |  CBI Updates Team

Update

Skills threat to UK

Our latest Employment Trends Survey finds that job creation is set to continue into 2016, but skills shortages and rising labour costs are presenting firms with serious challenges.

Published shortly before the festive break, the CBI/Accenture Employment Trends Survey 2015, The path ahead, found that more than two fifths of companies plan to grow their workforce this year. Jobs growth is expected to be seen in permanent, temporary, graduate and apprentice roles throughout the UK, with the North East leading the expansion.

Click here to read the full survey

Despite this upbeat picture on job creation, firms are concerned about the cumulative burden of recent labour market interventions. The survey found that rising labour costs through the planned National Living Wage (NLW) and the apprenticeship levy are a concern for business, while the government’s rhetoric on immigration is undermining competitiveness.

Surveyed before the details of the levy were announced in November, just one in six businesses (16%) believed it was the right approach to tackle the UK’s skills challenges, with almost half (47%) anticipating it being costly and bureaucratic. While nervousness in some sectors about the NLW is evident –over half (51%) of service sector respondents indicated they will raise their prices to offset the increased wage bill.

For the second year in a row, the skills deficit topped the list of future threats firms perceive to the UK’s competitiveness. Further restrictions on skilled migration would hamper business activity, with 29% of companies affected reporting they would fail to meet customer demand if they were unable to get the right person, in the right place at the right time.

For more information, please contact fionnuala.horrocks-burns@cbi.org.uk