Problems with skills shortages in the UK are at a record three-year high, according to recruitment company Reed.

The eleventh Reed Skills Index surveyed 550 organisations to establish the need for staff with particular skills across a number of industry sectors. It found that 72% of those surveyed were having problems recruiting staff with suitable skills, a rise of 26% over the previous six months. The sectors with the biggest problems attracting skilled staff are the service sector, with 82% of organisations reporting a skills shortage and the retail sector with 74%, followed by 70% in manufacturing, and 61% in the public sector. Accountancy positions are proving even harder to fill than IT ones, according to the respondents identifying particular job roles at risk.

Skills shortages also appear to be a geographical issue, with the biggest problems highlighted in the Thames Valley area, which is the worst hit in the UK. 78% of Thames Valley firms say they are finding it hard to recruit suitably qualified staff. East Anglia is also experiencing difficulties, with 75% of firms declaring a problem. The North East fares better, with only one in two firms saying they have a skills shortage in their area, with 45% of firms in the North West reporting staff recruitment problems. In Scotland only 42% of firms are experiencing skills shortages.

James Reed, chief executive of the Reed recruitment group, comments on the results: “Employers have experienced a sharp rise in skills shortages over the last six months. This is certainly a wake-up call to business. While salary inflation may become a threat, a more immediate concern is shortages of the right talented people to enable organisations to continue to grow. New technologies have taken a lot of the costs out of business, keeping inflation low. This means that skilled people have become more essential, not less. Employees at all levels now need both to understand technology and to respond swiftly to the new opportunities that are opening up. If Britain is to be globally competitive I believe it is vital to be able to attract the very best talent from around the globe and I would certainly support government initiatives which facilitate this."

Earlier this month, our sister site BusinessZONE reported that the rules on work permits had been relaxed to in a bid to help to reduce the impact of skills shortages on businesses.

To read the full report of the Reed Skills Index, go to