Skill shortages are costly and can hamper growth, but we don't currently measure these shortages in a detailed or timely way. To address this challenge, we have developed the first data-driven skills taxonomy for the UK that is publicly available. A skills taxonomy provides a consistent way of measuring the demand and supply of skills. It can also help workers and students learn more about the skills that they need, and the value of those skills. The full research paper is available to read here.
Skill shortages are a costly unknown
Skill shortages are a major issue in the UK and arise because there are not enough people with particular skills to meet demand. The Open University estimates that skill shortages cost the UK £2bn a year in higher salaries, recruitment costs and temporary staffing bills. They can also significantly hamper growth. According to OECD research, the UK could boost its productivity by 5 per cent if it reduced the level of skill mismatch to OECD best practice levels.