LONDON — A lack of skilled job candidates is costing companies around £2.2 billion in higher salaries and recruitment costs, according to a report from the Open University.
Companies spend around £500 million on higher salaries to tempt skilled workers, and spend £1.7 billion on recruitment consultants and temporary staff to fill gaps, the report said.
More than half of the 400 firms surveyed reported having to increase salary offers to skilled workers, according to the study, which blamed uncertainty over Brexit for the lack of candidates.
For small companies, the average salary increase needed to tempt skilled workers to take the job was £4,150, while the same figure for larger firms was £5,575. The report said that 90% of companies had experienced difficulty hiring workers with the necessary skills in the past 12 months.
Businesses have warned that Brexit and tougher immigration restrictions have the potential to hamper access to talented workers from overseas. The government has committed to cut net immigration to fewer than 100,000 in the wake of Brexit, down from 273,000 in 2016.
“We have a much much higher degree of integration of our businesses within Europe than we do in any other part of the world, and [this is about] the ability to move people around quickly onto a construction project or to make a television programme or to work on a legal project. We are a services based-economy and people are our currency,” Carolyn Fairbairn, Confederation of British Industry’s director general, said last month.
Even without a specific policy, Britain is becoming a less attractive place for overseas workers. The number of European Union nationals working in the UK fell in the last quarter of 2016, official data showed, adding to fears of a skills shortage.
The Office for National Statistics said the number of EU workers fell by 50,000 to 2.3 million in the final three months of last year — the biggest drop in five years according to Bloomberg.
Meanwhile, a survey by human resources group CIPD found that “almost one in three employers said that EU nationals were looking to leave their organisation as a direct result of Brexit.”
Here is the ONS chart in context, showing the trend from 1997: