The 2015 Hays Global Skills Index has been published, highlighting the UK’s struggle to keep pace with labour demands, and the increasing wage pressures arising from the talent shortage.
The report, published in collaboration with Oxford Economics, shows labour markets tightening in the UK, US, and Northern Europe, while demand slackens in BRIC countries as they face up to slowing growth. In total however, 21 of the 31 countries included in the Index are experiencing upward pressure on wages, pointing to a general return to growth globally.
“The world is generally back in growth mode,” said Hays’ chief executive Alistair Cox.
“However, this has exposed the huge challenges facing global labour markets, with demand for skilled workers outpacing supply, even though many countries still suffer from high overall unemployment rates. Businesses and governments must act to address these issues or risk jeopardising future economic growth.”
With UK growth of around 2.6 per cent forecast for 2015, the labour market has been subject to steady upward pressure. According to Nigel Heap, managing director of Hays UK, the worsening STEM skills shortage will continue to inflate wages across the technical sectors.
“Where these skill shortages are most acute, particularly in engineering and technology, salaries are rising more sharply as employers compete for hard to find skills,” said Heap.
“This wage pressure in high-skill occupations is reflected in the increase in the overall (Index) score for the UK this year, and is likely to continue unless measures are taken to address both short- and long-term skill shortages in the UK.”
While the wage gap between high and low skilled workers in BRIC countries has narrowed over the past 12 months, in North America and Europe the opposite is true. According to Hays, a combination of regulatory changes, better education, and immigration reform is required in order to provide businesses with the talent they require to maintain the current momentum.
“Education and training schemes need to be better aligned and tailored to produce sufficient levels of the skilled resources businesses need,” said Cox.
“However, this will take time to deliver results. In the meantime, regulatory and immigration reform is required as a short-term route to enable businesses to access world class talent from outside their domestic markets. Otherwise valuable jobs will continue to go unfilled.”