There has never been a better time to invest in skills,’ say UK’s business leaders. People and skills top the list of investment priorities for UK businesses, after years of under investment during the recession, according to a survey released today by KPMG.
The annual Business Instincts Survey, a poll of 498 C-level executives from businesses across the UK, found that under-investment has left many businesses with a skills deficit as they struggle to find ‘enough of the right people for the right jobs’. This lack of suitable candidates is ranked as second only to achieving profitable growth in a list of the biggest business headaches faced last year. Against this backdrop, more than half (58 percent) of the businesses surveyed said that they were planning to increase their workforce over the next 12 months. Yet, by admitting that attracting skilled staff is the top ‘people challenge’ currently concerning the Boardroom, one third said they are likely to keep workforce levels unchanged.
According to the findings, companies across the UK need to look after, reward and develop existing staff too. Many employees will have stuck with their current organisation through the recession with static pay and perhaps a rising workload and, with the economy improving, the survey suggests that retaining the best staff and being able to offer appropriate rewards are two of the biggest problems facing HR departments today. Commenting on the findings, Robert Bolton, co-lead of KPMG’s Global HR Centre of Excellence, said: “The war for talent is back – but it needs to be fought in a different way now. No longer can companies rely on rewarding high performers or tempting people to join with the promise of long-term financial incentives. With older staff needing, or wanting, to work past the traditional retirement age and more young people coming into the workforce, there could be four generations of people in a company at any one time. It means that the challenges of achieving a diverse workplace and supporting a variety of flexible working needsare forming the new battle front.”
The survey goes on to show that there is some positive news for the nation’s businesses. According to the data, access to finance in order to fund growth was not found to be a major issue. More than one-third (39 percent) claim they do not need to borrow funds, with many having built up cash reserves during the recession and strengthening their balance sheets. Overall, 86 percent of businesses also expect to increase their turnover this year, with a similar proportion (81 percent) believing their profitability will also improve. It appears that global mobility, and the associated skills, language and cultural issues, will also dominate the minds of HR teams and their C-suite colleagues as, although half of respondents said they are already operating overseas, 26 percent said they would expect to expand internationally in the next year.
Bolton concludes: “There is an increasing optimism among UK businesses who have indicated a gradual rather than explosive approach to their investment plans this year. Many businesses are feeling that under investment in staff during the downturn has led to a skills deficit but that the solution is not as simple as going out and rehiring talent. The right people are not always available, and competition is tough for the best hires. Businesses may continue to struggle to find the talent they need, especially in highly skilled areas and, as starting salaries and staff costs have started to rise for the first time in years, it could ultimately mean that whilst profits increase, for many businesses the key focus of profitability could still fall.”
