Labour market figures released today by the Office for National Statistics (ONS) show that the UK is still faced with a worsening skills crisis.

Despite the overall rise in job creation, the vacancy rate continues to increase, and is particularly critical in specialist areas such as IT and engineering. The latest Labour Market Figures, produced by the ONS reveal there are 588,000 more people in work than this time last year, but that there has been a 6% increase in the number of unfilled roles over the same period, as there are now 756,000 vacancies.

The figures also showed that the unemployment rate for September to November 2015 was 5.1%, down from 5.8% for a year earlier. Unemployment fell by 99,000 to 1.68 million and employment rose by 267,000 to 31.39 million for September to November 2015. For the same period, 74% of people aged from 16 to 64 were in work, the highest employment rate since comparable records began in 1971.

“The labour market continues to be a bright spot for the UK economy, reflecting strong domestic demand and the importance of maintaining flexibility," Matthew Fell, CBI Chief of Staff, said. "However, global risks are ramping up, so there’s no room for complacency. While employment has continued to rise strongly, with the largest increase for almost 18 months, private sector pay growth has continued to slow, underlining the need for a sustained recovery in productivity.” 

As far as the skills gap, the on-going shortage in skilled workers can be of concern for business managers as hard to fill vacancies can cause delays in developing new products and services.

Despite there being over 2 million students enrolled on degree courses in 2014/15, with a 3% increase in full-time first year enrolments in engineering and technology subjects, businesses often find that graduates are not adequately prepared for the workplace.

The skills gap is affecting UK productivity, for example, engineering companies have reported an annual shortfall of 55,000 skilled workers. It has been estimated that addressing the shortage of skills in this area could generate GBP 27 billion per year from 2020.

The Open University, a UK-based public distant learning university, states that a greater emphasis on workplace-based higher education is necessary to create more value for businesses and individuals alike.

 “The skills gap is affecting everyone, holding back businesses and having a knock-on effect on British economic productivity,” Steve Hill, Director of External Engagement at The Open University, said.

“In most cases, the answer to this shortage is right under our noses – with up to 90 per cent of the current workforce still in work over the next decade,” Hill said. “With the right training and up-skilling, these individuals can become the engineers, data scientists and high-skilled digital workforce the UK needs to compete on the world stage.”

“The challenge now is for Governments and the academic sector to work together to develop courses that meet the needs of businesses, and provide the right support for those committed to developing their careers,” Hill said.

Additionally, the ONS Labour Market figures also showed that Scotland has the highest employment rate out of the four UK nations, and is outperforming the UK as a whole with 21,000 more Scots in work, compared with the previous quarter, bringing the total to 2,631,000. The unemployment rate was down by 0.7% to 5.4% - the largest quarterly fall since the summer of 2014.

For the full report, click here.