Latest labour market statistics show urgent need for skills-first strategies

It is encouraging to see economic inactivity rates falling, however, with retirement one of the key drivers of this, the UK could be facing a ‘retirement cliff’ at a time when skills shortages remain an issue.

Sectors including technology, healthcare and education are still struggling to find the talent needed to meet demand. And while the number of working days lost due to labour disputes fell in May, the fact that this remains above 100,000 lost days in sectors where skills shortages are still rife is a concern. While we don’t expect there to be an overnight solution to the skills crisis, we believe there isn’t enough focus on sustainable skills growth in the UK

Reforms are urgently needed to encourage international contractors and the self-employed to seek work in the UK. However, current visas do not encourage these professionals to choose this route due to overly complex visa requirements.

There are also reforms required to a number of existing employment law specifications that do not help skills development and growth in the country. This includes introducing the IR35 set off which is currently under consultation and the Retained EU Employment Law proposals which will boost the flexible labour market that is so critical during this time. However, as we have highlighted on a number of occasions, greater clarity around the impact on skills and how these consultations will differentiate the professional labour market is crucial.

As our APSCo OutSource whitepaper, launched yesterday, highlights, with four in five firms currently struggling to recruit, a move to skills-first hiring is needed, not only by employers and recruiters, but also policymakers. That includes building accommodations that are written into law that account for the different needs of each segment of the flexible labour market.