UK Plc remains confident in difficult conditions

but firms unprepared for looming skills shortages


UK business confidence remains steady despite the economic fall-out of the war in the Middle East and tumbling Stock Markets, according to a new report released today by TMP/Hudson Global Resources, one of the world''s largest
mid-market recruitment consultancies. However, despite this confidence, the survey of 3,100 businesses also shows that problems are looming for UK plc if it does not take positive action to address long-term skills shortages.

The report is the inaugural edition of the company''s Industry Insight survey, analysing the current and projected recruitment intentions of UK companies, as well as investigating key HR and recruitment issues.

The survey shows that the majority of employers believe staff numbers will increase or remain the same in the next six months, indicating that UK plc remains confident in its prospects despite the events of recent months. Key
findings include:

* One-third (35 per cent) of businesses expect to increase staff levels during the next six months, with four out of ten (43 per cent)
respondents forecasting they will remain the same;
* Only 15 per cent of companies expect to have to cut staff numbers during the next six months. This compares favourably to the last six months, when more than one-quarter (27 per cent) of businesses cut staff
numbers;
* Despite the soft job market, almost one-third (32 per cent) of companies are still affected by specific skills shortages
* However, only one-quarter of firms (26 per cent) have a strategy in place to manage this issue over the long-term, with almost half (48 percent) not having one at all.

These figures confirm that despite the events of recent months, including disappointing UK GDP figures for the first quarter, most UK businesses clearly remain upbeat about their prospects in the next six months.
However, this short-term confidence does not guarantee long-term success, particularly if the key issue of skills shortages is not addressed. Chris Herrmannsen, European President of TMP/Hudson Global Resources, commented:

Our Industry Insight survey shows that UK plc still believes itself to be in good health, despite global economic conditions. However, whilst this is
positive news, it is concerning that even in a relatively soft labour market, many businesses are still being hit hard by skills shortages in key
areas of their business, but are doing nothing to address this long-term issue. An ageing population and increased demand for new work skills means skills shortages will become far more severe during the next decade, and
companies need to give serious consideration about how they are going to overcome this challenge.

In addition to the findings outlined above, the 2003 Industry Insight survey also shows that many businesses are still failing to make appropriate use of modern candidate assessment tools and rely solely on interview-based
methods: one-quarter of respondents use no recruitment tools other than a simple interview when hiring new staff. However:

* Almost two-thirds (62 per cent) use competency-based interviews;
* Twenty-nine per cent of businesses employ offline psychometric
testing techniques, with 10 per cent using technology to carry them out
online; and
* One-quarter use specialist candidate assessment centres.