Skills shortages are costing Scottish businesses £360m a year

9 July 2019

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More evidence of the potential dangers of a no deal Brexit for Scotland comes in a report showing that skills shortages are already costing Scottish businesses more than £360million a year.

The cost rose by more than £10 million last year, according to the findings of the Open University Business Barometer, signalling the need for a migration policy that benefits Scotland.

According to the report Scottish businesses are paying out an average of £17,028-a-year on temporary staff, recruitment fees and increased salaries as they struggle to find staff with the required skills.

The overall cost is £361.2 million, is up 2.5% on 2018 and nearly two thirds (63%) of Scottish firms surveyed report difficulties in recruiting for a role due to candidates lacking the skills required.

The survey of 950 businesses showed that more than a third (35%) expect the skills shortage to impact their revenues and two thirds (64%) said they expected Brexit to make the skills shortage worse.

Pronouncements on such matters by politicians should always be taken with a pinch of salt but the Scottish Government has warned that Scotland’s population could be half a million smaller by 2040 than it would be if control of immigration policy was devolved, restricting economic growth and harming public services.

The country’s birth-rate continues to fall, with just 12,580 births registered in Scotland in the fourth quarter of 2018, the second lowest 
figure since records began in 1855. Scotland’s population is expected to grow by just 4.4% between now and 2040, slower than Scandinavian countries and Ireland.

Last year the Scottish Parliament finance committee warned that low population growth would put pressure on the government spending public services. UK ministers have said immigration powers for Scotland are not required, and that a separate immigration system would create added bureaucracy for businesses.

 

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