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Companies bemoan UK suffering 'critical' skills shortage
UK firms are finding it harder than ever before to find skilled workers, with nearly three-quarters of the services industry struggling to recruit the employees they need.
The skills shortages had reached "critical levels" in the last quarter of 2017, a survey by the British Chambers of Commerce (BCC) members found, threatening to dampen future growth after a record number of British companies reported hiring difficulties.
In the manufacturing sector, which returned its highest output in a decade despite the weakened sterling, also saw its activity slow in the last quarter.
The BCC report revealed that both the services and manufacturing sectors anticipated a rise in costs moving forward, with 63% of manufacturers laying the blame on the increased cost of raw materials.
In response, 36% of services firms planned to raise their prices, as did half of the manufacturers surveyed, the highest share of companies since the beginning of 2016.
The recruitment drought comes as UK unemployment reached a 42-year low of 4.3%, forcing companies to seriously consider offering more competitive salaries in order to attract staff who had found it relatively simple to find work.
Dr Adam Marshall, director general of the BCC, said businesses "must do more" to address the skills shortages by training and investing in people wherever they could.
"Government must also give firms the confidence to put their livelihoods on the line and go for growth," he said.
Suren Thiru, a BCC economist, added that while inflation was likely to peak in the coming months, it would still remain "stubbornly above" the Bank of England's 2% inflation target for a "prolonged period", applying further pressure to businesses as well as squeezing customers.