UK Skills Gap: Skills Shortage Will Cost the Country
You will likely have seen the endless job vacancies in the UK currently available. There are now over 1.3 million positions that need to be filled, covering a whole host of industries and sectors.
The UK skills gap that companies are struggling with is set to cost the UK a staggering £120 billion by 2030, which we can all agree is crazy money! With 62% of organisations facing severe consequences due to the UK skills gap, we understand how frustrating the UK visa system is subject to many delays in 2022. At Synergy Immigration Solutions, we are well-versed in the struggles that companies face, which is why we have created a streamlined immigration law service to help you fill gaps with qualified overseas talent.
Keep reading to find out exactly how much this issue will cost the UK if a resolution is not found in the coming years.
What does the UK skills gap look like in 2022?
In the UK, most sectors are subject to the UK skills gap due to the current lack of skilled workers, which has detrimental knock-on effects to not profit margins and UK-based innovations. This is because of the changes in the UK immigration law, which came into effect in 2020. As a result of Brexit, the new UK immigration system introduced a points-based system for all workers that wish to be employees in the UK. This meant that not only was it difficult for people to enter, but it also meant that many current UK employees did not meet the criteria making their status null and void. This change saw a drop of 41,000 skilled workers between 2019 and 2020, which meant a correlating amount of job vacancies – negatively impacting and furthering the UK skills gap.
UK skilled worker visas are also subject to various delays in 2022 due to the Home for Ukraine scheme, which was launched to support efforts attached to the ongoing war. This has seen more than 213,000 applications in a short time, which has, understandably, taken up efforts.
The cost that the UK is subjected to because of the ongoing UK skills gap will cost the country in lots of areas, including the following:
Recruitment and Temporary Staff
Companies in the UK spend more than £4.4 billion annually covering recruitment, temporary staffing, training, and visa sponsorship fees. Whilst this means that other sectors, including recruitment and education, will stand to benefit, it does deliver a huge knock-on expense to companies that are already struggling.
Loss of Innovation
The UK skills gap in the digital sector alone is costing the UK economy £12.8 billion each year. Therefore, the UK runs the risk of losing its status as a leading global innovator if this is not sorted. Whilst training within the UK is important for graduates and students; there is also a need to bring in overseas talents to bridge this huge gap.
Alongside the costs we have already mentioned, there is also the issue that companies cannot bring new jobs and departments to the market as they are suffering from a lack of resources for existing positions. This will seriously impact overall business development and cost the country a large amount, far exceeding the next decade.
What areas is the UK lacking in the most?
The UK skilled worker shortage list showcases the sectors and industries that are being affected the most by the UK skills gap. This is important to understand as it allows us to understand better the financial implications the country will face if the shortage is not resolved soon. The list has been comprised of sectors that need the most support in the UK. Without the filling of these positions; the UK will run into more financial trouble than it is already in.
The main sectors included in the list are the following:
Health Care Professionals
This includes managers, caregivers, and residential care professionals. The healthcare industry is heavily impacted by the UK skills gap. The NHS alone reports that more than 110,000 vacancies need to be filled. With the national health service already under pressure to perform at a faster level to make savings of more than £330 million, the need for skilled professionals is increasingly becoming essential.
Included in the list are chemical students, biochemists, geophysics, and engineering professionals. With around 6000 professionals predicted to be needed each year over the next decade, the UK skills gap increases the risk of the country falling behind when it comes to essential advances if the shortage is not fulfilled. This covers a whole range of essential support, including infrastructure developments, medical advances, and bio-chemical knowledge needed to meet the UK’s sustainability objectives.
This covers mechanical, electrical, and design engineering. The engineering industry reports that 49% of companies are struggling with the UK skills gap. This is an industry which is also set to run into severe trouble over the next few years as 19.5% of the workforce is set to hit retirement age by 2026. Whilst the UK has some incredible engineering-focused training and academic institutions, without additional support from overseas professionals the annual £1.2 trillion profit could be impacted.
IT and Web Design professionals
Astonishingly, the UK IT job vacancies rose by 191% in early 2022 as a result of both the skills shortage and the increasing need for IT advances. The shortage list includes IT architects, system designers, programmers, software developers, website designers and IT communication professionals which are amongst the list of skills needed the most. With IT tech salaries being as much as 80% higher than other industries, the country is willing to invest, to help fill the UK skills gap in the digital sector.
The number of registrants coming to support the sector in the UK has fallen by 68% between 2019 to 2021. The profession is at breaking point, with many sources reporting that if vet professionals are brought into place quickly, we could go past the brink of being able to meet demands.
With 18% of practices struggling to meet the UK’s demand for housing and infrastructure needs due to a lack of talent, it is no surprise that they are on the list. This doesn’t just impact private company profits but also public-focused ones. This is because the UK has agreed to build more than 300,000 homes a year to meet the needs of the growing population. Without having enough professionals in the planning phases, financial impacts would mean more people in temporary housing, which currently costs the government around £1.45 billion per year.
This may not be the sector that springs to mind, but it is essential if the UK stands a chance at mitigating the effects of lost earnings in other industries. Quality professionals have a large role to play in not just product outputs but also services. If professionals are not recruited for this sector, the UK risks making more financial losses than it can afford.
Laboratory and Testing Professionals
Over the next few years, the UK needs an estimated 700,000 additional laboratory tech professionals to meet the needs of innovation. With it taking an estimated ten years for professionals to be fully trained, the need to bring in overseas talent that is already at the top of their field is obvious. If the positions are not filled, the UK runs the risk of falling behind in many different industries.
How can I bring overseas talent into my company?
At Synergy Immigration Solutions, we specialise in helping both individuals and businesses succeed in sorting visas and status applications. One of the services that we offer covers Sponsorship Licences which is the status employers need to successfully recruit overseas talent.
The government introduced the UK sponsorship licence in 2021 to regulate visa applications post leaving the EU. By creating a process that allows individuals to be awarded a visa based on skills applications can be processed more quickly and fairly. Businesses that are looking to bring in talent from outside the UK need to ensure they meet the criteria outlined by the government. They will also need to provide the following to prove they are a legitimate business with the structure in place to look after employees:
- Company accounts
- Proof of VAT registration
- A letter from your corporate banking provider setting out the dealings it has had with you, including the nature and duration of those dealings.
- Proof of inspections and outcomes for relevant industries such as agriculture and healthcare.
- Business ownership and directorship proof.
- Evidence of trading locations.
- Proof that you are based in the UK
- Proof that you are operating and trading lawfully in the UK
Do you need support in bridging the skills gaps in your industry?
As we have outlined, if the UK does not successfully bring in or train talent to fulfil the overwhelming amount of job shortages, the financial impact will be catastrophic.
The UK skills gap is not something we are phased by. We think that with every challenge comes a positive. In this case, the pressure the UK is under means that processes are being put into place to make it easier for more talent to be recruited. If done successfully, this could lead to a very bright future!