• Register
Return to: Home > News > Skills shortage is a possible threat to business optimism

Skills shortage is a possible threat to business optimism

While business optimism has risen to an all-time high of 51% in this year’s second quarter growing fears over workforce skills could impact confidence, according to Grant Thornton’s International Business Report (IBR).

Of the 2,500 businesses across 36 economies surveyed by Grant Thornton International, 35% identify a lack of skilled workers as a constraint, the highest quarterly level ever.

Business optimism has increased in the last five consecutive quarters and optimism hit an all-time high in the USA of 81%, and the EU on a second year high of 50%. Grant Thornton global leader for tax services Francesca Lagerberg said that it would be easy to assume that the figures are good news from the record numbers, but the skilled worker shortage is a major warning.

“Despite companies telling us they plan to hire more staff, we’ve seen a steady increase in fears that a lack of skilled workers could hamper future growth. The overall outlook might look rosy, but the fight for talent is going to heat up and could cause wages and inflation to rise. How businesses respond will be key to keeping growth plans on track,” Lagerberg said.

Thirty six percent of global businesses expect to hire more staff in the next 12 months, another record high, yet only 20% plan to increase wages above inflation in the same time period. Germany is an exception, whose above inflation pay rises have leapt from 35% to 43%.

Lagerberg added: “Employment is increasing, profits are increasing, concerns about skilled workers are increasing, yet plans to increase pay in real terms remain stagnant. Something will eventually have to give and could cause greater inflation. In Germany, businesses appear to have realised that with tight labour markets, increasing pay is necessary to retain and recruit the skilled staff needed.”

Increasing wages is a short-term measure but longer-term, businesses will need to look at training programmes to boost skills among existing workers, advised Lagerberg.

Top Content

    World Survey 2018: Data

    International Accounting Bulletin 2018 rankings of Networks and Associations globally

    read more

    World Survey 2018: Meet the new CEOs

    Eight networks and associations changed or appointed a CEO in 2017. International Accounting Bulletin caught up with the new CEOs to get their views on the market and their plans for their organisations. Interviews by Vincent Huck. Interviews are in alphabetical order. Moore Stephens International declined an interview, while Grant Thornton had not replied at the time of publication

    read more

    Editor's letter: Another year, another dollar

    Another year, another dollar

    read more

    New staff for the new work

    The accounting profession recognises recruiting and retaining the brightest and best with new skills requires an innovative approach to recruitment. Paul Golden reports

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.