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Is there a shortage of jobs or a shortage of people to do them?

View profile for Alexandra Dean
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A record number of people in the UK are in employment, and immigration from the EU is also at a record level.

There would appear to be little evidence to suggest that there is currently a shortage of jobs. The latest Labour Market Statistics published by the Office for National Statistics (ONS) show that the UK employment rate (the proportion of people aged 16-64 who are in work) has increased to the highest on record, to 73.5% compared with 72.8% a year ago, demonstrating that demand for labour is more than keeping up with population growth. 

Unemployment, at a rate of 5.5%, is well below that experienced during the recession and subsequent period of uncertain recovery. There were 740,000 job vacancies, close to the highest on record and likely to be a significant under-count as not all vacancies are notified with Jobcentre Plus.

But if there is a record rate of people in employment and employers are posting record numbers of vacancies, why are people still unemployed and why are recruiters reporting such large numbers of candidates for each position advertised? 

Part of the answer comes down to the fact that there may be mismatches between the skills available in the UK labour force and the needs and expectations of employers. The Employer Skills Survey (ESS) interviews more than 90,000 employers and reports every two years, with the latest data referring to 2013. 

In that year, total vacancies had increased by 12% on 2011 and were back to pre-recession levels, but the proportion remaining unfilled because of a lack of candidates with the right skills, experience or qualifications had also increased from 16% to 22%. This is equivalent to 146,000 skills shortage vacancies. 

The ESS indicates that manufacturing employers were most likely to encounter skills shortages when recruiting (accounting for 30% of hard-to-fill manufacturing vacancies) and that job roles in the skilled trades (plumbers, electricians, technicians et cetera) were particularly likely to be affected.

Education is frequently blamed for failing to equip young people with the relevant work skills. However, it is not this clear cut. 

Chris Lawton a senior research fellow in the division of economics at Nottingham Business School, believes the key issue is the long-term nature of the challenge. An individual starts to make choices in education that will affect the skills needed in their career as much as a decade before they will enter the workplace, by which time technology and consumer preferences will have changed radically. 

Education policy, workforce planning and careers guidance are all affected by the time lag between implementing policy and those changes impacting on the workforce. 

Chris Lawton explains that In a system where learner choice plays an increasingly important role, it is ever more important for young people to access good information, advice and guidance on the likely skills needed by employers in the future.

At Gepp & Sons Solicitors we can advise on all aspects of employment law. For more information and guidance, please contact Alexandra Dean on 01245 228141 or email deana@gepp.co.uk.

This is not legal advice; it is intended to provide information of general interest about current legal issues.