The latest CIPD and KPMG Labour Market Outlook survey has found that nearly 600 employers are experiencing difficulties in recruiting skilled people from the UK as the country’s economy slowly stabilises. This has compelled them to turn to offshoring and recruiting migrant workers to fill in the shortfall in ‘home-grown’ talent.
Results from the survey show that approximately 10 per cent of private sector firms intend to offshore UK jobs between now and June 2011. Of those planning to do this around 65 per cent said that they will be offshoring to India, 36% per cent to China and 29 percent to Eastern Europe.
CIPD Public Policy Advisor, Gerwyn Davies, warned that “employers running global operations will be forced to offshore skilled jobs to other countries if the right skills mix in the UK cannot be found”.
Read the full survey here
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It is quite remarkable that companies are seeking talent from abroad when unemployment is at an all time high and we have increasing numbers of young people and graduates seeking work – not to mention the reams of people who have been made redundant. This appears to be an excuse by some companies to cut costs by going abroad:
Maybe I’m being cynical?
Please do a reality check and look around with your own eyes. Don’t just believe fancy reports that are open to a wide array of manipulation, biases and PR and journalist agendas.
Talent shortage is a myth propagated by incompetent industry managers who use it to cloak shortfall in their own performance.
There is NO shortage of talent or experience in the UK. Just do an internet search on the number of freelance experts, niche consulting companies and the like, and you will find clever, qualified, well-educated, and highly experienced people who are living and working in the UK. Not to speak of half a million plus unemployed graduates.
The first problem is the affordability gap: UK plc can no longer afford to hire home-grown talent, so it goes on bargain hunting. But that is self-damaging, as it puts less money into the pockets of the people and the economy; i.e. less customers, more cost pressure, more cuts and hence even more reliance on cheaper (not necessarily better) talent.
Also, the expats may be paying taxes (and providing the govt with short-term tax revenues, which is why Labour was so keen on lax immigration), but they also take money out of the local economy by sending a significant proportion of their earnings back to their home country. The short-term gain in tax revenue is also not enough to cover the cost of long-term infrastructure and services (council, schooling, NHS, etc). And when the expats settle and bring over their families the support and social costs to the average taxpayer spirals too.
The second issue relates to age and experience (and its price). UK employers tend to prefer younger employees because they are more cost-effective, and may hang around longer with the company. However, there is no longer such a thing as job or career security, so why do we allude ourselves with such outmoded concepts? And has anyone ever conducted a study to measure the true cost of mistakes by inexperienced business managers?
Many UK companies think that they can compete better by moving their cost bases abroad altogether, but as anyone who has played any away-match will tell you, it is never easy to play on someone else’s turf. In the long-term those companies will always tend to lose out to their local counterparts.
The real solution lies in UK companies managing their costs more efficiently and understanding the economic link and cycle between their employees and customers. Cutting out the local workforce may also mean cutting-off your current or future customers. But using home-grown talent for exporting innovation could lead to sustained prosperity for many.