A shortage of skilled employees continues to remain the biggest business problem for private companies despite the continued deterioration in economic conditions, according to a European-wide survey of firms backed by 3i, Europeís leading venture capital company.
Despite showing a year-on-year improvement, the shortage of skilled employees still remains the single biggest problem facing businesses. Weighted by Gross Domestic Product, the number of respondents across Europe who cited skills shortages as posing the most difficult business problem was 23 percent compared with the 28 percent recorded a year previously in May 2000.
The next most important business problem was cited as competition at 21 percent, down from 25 percent a year ago. There were sharp increases, however, in the number of respondents who saw problems from lack of demand, up from 10 per cent to 18 percent, and with access to finance, up from 6 percent to 11 percent.
A majority of respondents from each of the five countries - the UK, France, Germany, Italy and Spain ñ said they were facing a shortage of skilled employees. The problem is most marked in France at 64 percent, closely followed by Spain at 62 percent and Italy at 58 percent. The problem affects slightly more than half of the survey respondents in both the UK and Germany.
Brian Larcombe, 3iës chief executive, said: ìGiven the reductions in staff numbers by many companies across Europe, it is a bit surprising to see that shortage of skilled employees is still such a large problem. Of more concern, however, is that a slowing in demand is increasingly becoming a key issue.î
The methods of dealing with the problem of skill shortages vary according to the size of firms. Larger firms say that they are more likely to use training to address skills problems. Smaller firms, however, use other recruitment channels, such as enlisting head-hunters and the Internet, as a way of bringing the skills base up to required levels.
Whilst the shortage of skilled employees was the most important problem overall, there were variations between each of the five countries. Lack of demand was cited as the biggest problem in the UK, while competition was seen as the most important issue in France, Spain and Italy. A majority of manufacturers across Europe were more concerned about lack of demand than about skill shortages.
Across Europe as a whole, 3i-backed companies are fairly evenly split between those which believe that their countryís educational system is satisfactory in meeting the needs of their business and those which believe it is not. However, there is considerable difference in opinion between countries. Only one in five of respondents in Italy were satisfied about the countryís educational system, which contrasts sharply with 62 percent in Germany and 52 percent in the UK. This is the first time a majority of 3i-backed companies rate the UK educational system as satisfactory, a rise from only 21% in July 1989.
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Shortage of skilled employees causes problems for private companies across Europe - 08/2001
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