More than seven in 10 British businesses do not believe they will achieve the government's full employment target during the next five years, research carried out by an industry website and published on Thursday, 11 February, shows. According to data released by UK job website totaljobs, 71% of the 100 UK businesses surveyed are pessimistic over the government's ability to meet its ambitious employment goal by the end of the current parliament.
Official data released in January showed that wage growth in Britain slowed in the three months to November 2015, even though the national unemployment rate stood at 5.1%, its lowest level since May 2008 and marginally above the 5% rate that defines full employment.
The report also revealed that 43% of the 4,000 jobseekers surveyed have been more selective about the roles that they have taken over the last three years. As a result, 23% of businesses have reported subdued growth due to a shrinking talent pool and 55% currently face a skills shortage in their sector.
Jobs and skills mismatch
Among the businesses that took part in the survey, 49% expect recruitment will be difficult over the next two years, with the average number of candidates interviewed per role currently standing at six. Meanwhile, 65% of jobseekers said getting a job was becoming increasingly difficult, despite employers finding it harder to find new talent.
This contradiction, the authors of the report said, pointed to the continued mismatch between the skills held by candidates and those demanded by employers.
The recruitment industry is also seeing a shift in candidate supply and demand, with 68% of employers saying it is now more candidate-led than in the last five years.
"The UK economy will struggle to maintain long-term sustainable growth if the mismatch between the supply of jobs and existing jobseeker talent pool is not addressed," said John Salt, sales director at totaljobs.
"In an increasingly candidate-led market, there are a number of ways businesses can ensure that they are recruiting and employing the right talent."
An employee-led job market
More than a third of the businesses surveyed said they believed the time it takes to fill roles will increase in the next five years, as finding talent could become more difficult as the economy grows stronger.
Meanwhile, the Office for Budget Responsibility predicted that 60,000 people will lose their jobs as a result of the changes to the Conservative's National Living Wage (NLW) – which is effectively a rebranded minimum wage – although 95% businesses believe the introduction of the NLW will not discourage them from hiring, and 77% of employers said they regularly train people into roles, showing employers are already adapting to a tougher recruitment outlook.
On 4 February, the Bank of England (BoE) cut its forecast for British wage growth, saying it expects average weekly earnings, described by BoE governor Mark Carney as one of the main determining factors of future interest rates, to increase by 3% this year – down from the 3.75% it predicted three months ago.