Skills shortage undermines export market

Two thirds of exporters are struggling to recruit skilled staff, warn DHL and the British Chambers of Commerce as they release the latest Quarterly International Trade Outlook.

While the volume of UK exports remains high, and confidence among both services firms and manufacturers is increasing, more than two thirds of exporters (68%) reported difficulties hiring staff during Q2 2015 – the highest level since Q4 2013. The greatest area of recruitment difficulty reported was in finding skilled and professional staff.

Although the volume of trade documents issued by Accredited Chambers of Commerce in Q2 declined by 0.3% on the previous quarter, this was still 1.5% higher than for the same quarter in 2014, and was the second highest on record. Export documents are required for goods exported outside of the EU, and this figure demonstrates that UK businesses are continuing to grow non-EU exports and are breaking into new markets overseas*.

Firms are increasingly confident that turnover and profitability will rise in the coming months, leading to a third of firms (36%) expecting to take on additional staff in the next three months as a result. However, this confidence is rising much more quickly among service firms than among manufacturers.

There is also a growing expectation of export sales increasing over the coming months. The balance of those expecting exports to rise stood at +24 for service firms and just +12 for manufacturing firms**.

John Longworth, Director General of the British Chambers of Commerce, said: “This week we celebrated the achievements of those taking their A levels, but we have to remember that academic results are not the only thing employers look for. We need to make sure that the skills young people develop in schools equip them for the world of work. In the 21st century the countries with the most skilled workforces will be the ultimate winners globally. Our research shows that while confidence among exporters is rising, businesses are struggling to get access to the skilled staff that they need.

“Businesses and schools need to work together to ensure students have a better understanding of the business world, the opportunities it presents to them and the skills that will help them to get ahead, including foreign languages.

“If we are going to reverse the UK’s trade deficit then businesses need a workforce with the appropriate skills and knowledge to trade and compete on the global stage. Businesses must be able to attract and, crucially, retain the talent they need to stay ahead.”

Phil Couchman, CEO, DHL Express UK, said:

“It’s really encouraging to see the continued confidence expressed by UK businesses, and particularly to see the strong performance of the North East – which we hope can only get stronger with the Government’s plans for a Northern Powerhouse.

“On this occasion there is also the clear message that as we continue to deliver on our commitment to growth, we cannot afford to lose focus on the people and skills that are paving the way for these strong results to continue.

“It is vital that we all, as employers and educators, continue to up-skill our workforce in the UK. Whether that’s through apprenticeships for young people, or further investing in the development of our existing employees, a commitment to bettering our workforce is essential in ensuring that the skills gap is plugged and the UK remains competitive on a global scale.”