COMPANIES NOT POSITIVE ABOUT GOVERNMENT POLICY

Eastern Europe is the best source of foreign talent for UK companies as the skills crisis deepens, according to a report from Vedior, one of the world’s largest recruitment companies. This is the view of a quarter (24%) of human resources managers interviewed by Ipsos MORI for Vedior’s survey, “Is the UK up to the job?”. Eastern European workers will be particularly important for the manufacturing sector. 38% of manufacturers said the region would be the best source of skills outside the UK.

Eastern Europe is way ahead of the second and third most important sources of skills, France (9%) and Germany (8%), and two thirds (67%) of UK organisations believe that membership of the European Union will help them fill their skills shortages. In contrast, North America, India and the Far East are seen as being far less important sources of talent.

38% of human resources managers expect the skills crisis to get worse in the next few years, but they have mixed views on how helpful government policy is. Whereas the majority (63%) of human resources professionals said government policy had no impact on their search for skills, a quarter of them said that government policy is a hindrance. The most negative policy-related comments were made with regard to increasing employment-related bureaucracy.

Zach Miles, CEO of Vedior, said: “With skills shortages set to get worse it is encouraging that UK employers are taking an open approach to the immigration of skilled workers. This will put the UK economy at an advantage over the many continental countries that also face severe skills crises, but that have far less positive approaches to immigration and less flexible labour markets. The challenge for the UK is to maintain its flexible labour market within a light-touch regulatory framework and to ensure education is more closely aligned to business demands.”

Zach Miles (right) shares a joke with Jim Murphy MP* (left), the UK’s Minister of State for Employment and Welfare Reform and Henrietta Royle, COO of the CASS Business School at the CASS Seminar to launch Vedior’s research report on the UK skills crisis. The Seminar was chaired by Richard Donkin, Employment Columnist for the Financial Times and other presenters were Matthew Francis, Human Resources Manager at Perkins Engines Ltd, Annemarie Muntz, President of Euro-CIETT, Professor Mark Stuart, Centre for Employment Relations, Innovation and Change at Leeds University Business School, Barry Waller, Head of Hackney Recruitment Centre and John Philpott, Chief Economist at the CIPD.

(*Following the Government reshuffle upon the resignation of Prime Minister Tony Blair, Jim Murphy has been promoted to Minister for Europe with responsibility for the UK's relations with the European Union, Russia, Central Asia, South Caucasus, Balkans, Ukraine, Belarus, Moldova and NATO.)

The skill shortage problem is most acute in manufacturing where half (49%) of the companies interviewed expect the skills gap to widen. 39% of public sector organisations anticipate a deteriorating situation. The services sector is less gloomy, but nearly a quarter (23%) of the companies surveyed do not expect the situation to get better.

Wage inflation is the most likely impact of the scarcity of talent - 40% of organisations say it is very likely they will have to raise salaries to attract and retain the right people. This expectation is particularly widespread in manufacturing (48%).

The commercial impacts of skills shortages are also high. There is an expectation of a potential decline in competitiveness (reported by 23%), customer satisfaction (21%) and lost sales (18%).

To counter the skills chasm, companies are expecting to invest in training - 39% of human resources professionals said this is very likely. They are also expecting to employ types of workers who do not fit the traditional full-time worker mode – mothers returning to the labour market after career breaks, over-50s, temporaries and part-timers – and to adopt more family-friendly employment policies.

The most commonly cited shortage is engineering skills, a problem reported by 20% of organisations. Other skills and workers that are especially scarce are skilled manual workers (raised by 10%), financial specialists (10%), managerial (9%), sales, IT and technicians (7%), and clerical staff (5%). 32% of public sector organisations face a shortage of healthcare workers. The public sector is also particularly short of other skills in finance (18%), IT (13%) and clerical areas (10%).

Company Profile:
Vedior is one of the world’s largest recruitment companies and is a full-service recruitment provider with a diversified portfolio of brands targeting a broad range of industry sectors.
From its global network of offices spanning Europe, North America, Australasia, Asia, South America and Africa, Vedior offers temporary and permanent recruitment as well as a number of complementary employment-related services such as outplacement, HR outsourcing, payrolling and training.
Vedior has a leading market position in the provision of professional/executive recruitment in sectors such as information technology, healthcare, accounting, engineering and education. We also have a significant global network providing administrative/secretarial and light industrial recruitment.

Research methodology:
Ipsos MORI interviewed human resources directors and managers from 200 organisations across the spectrum of the UK economy – in the services, manufacturing and public sectors. The sample was equally split between medium size organisations (100-250 employees) and large organisations (more than 250 employees). Interviews were conducted by telephone in April 2007.


For further information, please contact:
John Nurthen, Director of Corporate Affairs +44 1727 842999
Annemarie Muntz, Director of Public Affairs +31 35 646 7254