Last reviewed 5 August 2022

Aiming to address what it calls the chronic and systemic skills shortages that have long been experienced in Britain, the Institute of Directors (IoD) has set out a series of measures in its response to an ongoing Treasury workstream entitled People, Capital and Ideas.

The full text of its 17-page response can be found here.

IoD Senior Policy Advisor, Alexandra Hall-Chen, said: “Business leaders are clear that responsibility for fixing skills shortages lies jointly between government and industry. We are therefore calling on government to be clearer about what its priorities are, through the establishment of an independent Shortage Occupations Agency, and to be bolder in what it will do to achieve change.”

The fully independent Agency must have a statutory remit to systematically advise on current and future skills shortages areas for the UK economy, she went on.

The report also calls on the Government to use the tax system to incentivise business training to address skills requirements identified by the Agency, for example by allowing expensing at over 100% for training in these areas only.

In addition, sole traders should be able to deduct for tax purposes the costs of reskilling into areas that are entirely new for their business, if these are identified as priorities by the Shortage Occupations Agency.

To further increase uptake, the IoD argues, the Government should reimburse the payroll costs for firms who allow existing employees away from their normal duties to undertake either these Level 3 guarantee or the shorter “bootcamp” courses in skills shortage areas, subject to an upper limit.

“By using the taxation system to incentivise organisations that train up their staff to meet national skills shortage needs, the Government can help to address this long-standing issue that negatively affects British business,” Ms Hall-Chen concluded.

Comment by Kate Palmer, HR Advice and Consultancy Director at Peninsula

Widespread skills shortages are negatively impacting organisations across the UK. Managers can combat this by increasing their own awareness of the individual skills of each member of their workforce and use this to their advantage to get the most value from their employees.

It’s unlikely that all employees will excel at everything, so identifying key areas that they do, and having them focus on this, will be most beneficial for both the employee and the business.

A “buddy” system can be an efficient way of sharing knowledge and encouraging collaboration to reach communal goals.