Talent mismatch costs UK £1.2bn a year
10 April 2014Follow @PwC_NI
Not having the right people in the right jobs is potentially costing the UK £1.2 billion a year, according to PwC research, which was commissioned by online professional network, LinkedIn.
The research study, Adapt to Survive analysed interactions from LinkedIn’s 277 million professionals, of which 15 million are in the UK.
This LinkedIn data was matched with information on 2,600 employers from PwC’s global Saratoga people and performance database, to understand which countries best aligning talent with opportunity.
The report looks at five key workforce issues across 11 countries [see Notes] and reveals that the global cost of poor talent adaptability – the inability of people to retrain for new skills or switch industries –could be as much as £96 billion annually. (US$150 billion).
For UK employers, a costly combination of the time taken to identify and recruit the right talent and an increased likelihood that mismatched talent won’t stick around for long, could drive up annual recruitment costs alone by as much as £270m.
The report also points to a clear link between the adaptability of talented workers and the performance of the undertaking they work for. It’s estimated that if the UK improves its ability to match talent with the right opportunity, it could unlock up £930m in increased productivity.
If the UK could unlock the combination of the £270m of ‘lost’ recruitment spending and the £930m of potential increased productivity, the UK economy would benefit to the tune of £1.2bn., annually.
The report uses a Talent Adaptability Score [see Notes] to analyse workforce flexibility in different countries, thus indicating the country’s likely ability to respond to future shifts in workforce demand.
The report ranks the UK in 2nd place of the 11 countries, due to the international nature of the UK market and the presence of a large number of global businesses, combined with above average movement of talent between employment positions. The Netherlands’ multilingual workforce and international business base placed it first in the rankings.
Emerging markets India and China made lower scores due to there being of fewer mature sectors and their geographic size which limits talent mobility.
Kevin MacAllister, partner and private sector leader with PwC in Northern Ireland says that many organisations and their employers are not adapting quickly enough to the potential impact of external factors on their domestic markets:
“Employers in industries ranging from IT to engineering and construction are increasingly concerned that they don’t currently have the right people with the right skills in the right places to respond to recovery and increase Northern Ireland’s international competitiveness.
“Instead of a skills gap hampering growth plans, organisations need to be better at matching talent to opportunities.
“This includes using analytics to identify skills that are central to the business strategy now and in the future, improving internal mobility and rewarding people who display new and adaptable skills.”
Dan Shapero, VP of LinkedIn Talent Solutions and Insights, added:
“Countries increasingly differentiate themselves in the global marketplace via their human capital.
“Up until now, it’s been challenging for them to assess the skills, knowledge and experience of their workforces due to the dearth of professional data.
“We’re hopeful that countries will leverage the insights uncovered in Adapt to Survive to maximise the efficacy of their human capital and create more opportunities for their workforces.”
About the Talent Adaptability Score
The Talent Adaptability Score looks at five key behavioural factors: the average number of times professionals in that market switch industries; the average number of different positions held in a professional’s career; the average number of internal promotions in that market; the average number of employers a professional has had in each market; and finally, the average number of open vacancies divided by the market’s population.
The Talent Adaptability Score is a powerful indicator of a market’s ability to respond to future shifts in demand, not a snapshot of current economic performance.
Email: John Compton
Tel: +44 (0)28 9041 5663