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Insight: Economic recovery threatened by skills shortage, survey finds

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26th Aug 2014
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More than eight in 10 UK businesses are experiencing a skills shortage, which is putting economic recovery at risk, according to new research.

The survey by private equity firm ECI Partners revealed that 82% of the UK’s fastest growing companies are being hit by an increasing skills shortage, with the whole country and every sector being affected.

The North West and Midlands were the worst hit areas, while the majority of the industrial businesses questioned reported a shortage, the report said.

David Ewing, managing partner at ECI Partners, fears that the growing skills shortage across the country could limit the growth potential of these companies and therefore the UK economy.

“The UK is in desperate need of a better skilled workforce, world class infrastructure and a ‘normal’ functioning banking sector," he said.

"These items should be top of the agenda in the upcoming party conferences, the 2015 general election and beyond.”

Meanwhile, a separate report by Close Brothers Invoice Finance has revealed growing concerns over digital skills shortages in the UK, with 43% of small and medium-sized businesses in urgent need of enhanced digital skills over the next three years in order to cope with demand.

Of that number, 77% are concerned about how they will upskill and many anticipate potential problems finding suitable skilled staff.

CEO of Close Brothers Invoice Finance David Thomson said: “Many SMEs do not feel adequately equipped for the future and they are concerned that finding staff with the appropriate skills will be a challenge."

“We need to explore how the UK can prepare to compete in a digital global economy. Perhaps it is becoming necessary for businesses to look towards the younger generation to help address the growing skills gap.”

The UK Commission for Employment and Skills warned last month that “urgent action” is required to ensure the UK’s skills challenges don’t threaten economic recovery. 

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