Growth undermined by lost productivity and avoidable recruitment spend, finds PwC
The inability of people to retrain for new skills or switch industries is costing the UK £1.2 billion in lost productivity and wasted recruitment costs, a study by consultancy PwC has found.
The report – Adapt to Survive – suggests the UK economy is missing out on £930 million because the skills of available workers are “mismatched” to the opportunities available.
In addition to this, a further £270 million is being spent by employers on unnecessary recruitment costs.
Yet out of the 11 countries examined in the study, the UK ranked second as the most adaptable country just behind the Netherlands. The Netherlands achieved a high score of 85 on PwC’s ‘Talent Adaptability’ scale because of its multilingual workforce and international business base.
The study, commissioned by LinkedIn, examined data from the online network’s 277 million users, and from the consultancy’s Saratoga database’s 2,600 employers.
The adaptability of the 11 countries was ranked based on factors such as the average number of times workers in the country had switched employers, and the number of job vacancies available per person.
The research found a strong correlation between the adaptability of a country’s workforce and the performance of companies in that country.
India and China ranked as the least adaptable countries in the study, scoring just 34 and 23 respectively, because of the smaller number of mature sectors; concentrated skill sets, and a geographic size that makes employee mobility difficult.
The UK’s success was attributed to the international nature of the market; the large number of global businesses that have UK offices, and the above average movement of workers between positions.
But, despite the available opportunities in the UK, the report shows employers are spending longer finding suitable candidates for vacancies and employees are at risk of prematurely leaving job roles after being poorly matched to a position.
The costs of this recruitment raise concerns for chief executives in the UK, with 65 cent of leaders intending to increase their company’s headcount over the next year. A similar percentage (64 per cent) of business leaders said they were worried about the lack of suitable skilled employees in the current market.
Commenting on the study, Michael Rendell, partner, global head of HR services practice at PwC, said: “Businesses’ growth strategies are changing and many UK CEOs recognise that they don’t currently have the right people with the right skills in the right places to achieve their aspirations.”
He suggested that organisations needed to be better at matching talent to the vast opportunities available in the UK.
This can be achieved by, “using analytics to identify skills that are central to the business strategy now and in the future, improving internal mobility and rewarding people who display new and adaptable skills,” he added.
Other countries examined in the study were Canada, Singapore, US, Australia, France, Germany and Brazil.
