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CIPD: Firms need to invest in skills to drive growth

CIPD: Firms need to invest in skills to drive growth

While the UK labour market continues to experience accelerating growth, companies need to improve investment in skills if they are to boost productivity and secure future solid growth.

This is according to the Chartered Institute of Personnel and Development (CIPD), which has commented on the official employment figures published by the Office for National Statistics yesterday (May 15th).

Although the organisation is encouraged that UK employers added 283,000 new jobs in the first three months of 2014, wages are failing to keep pace with this growth. 

Basic pay rises averaged 2.5 per cent prior to the global financial crisis of 2008 and subsequent recession, but this figure currently stands at just 1.3 per cent.

However, the CIPD warned this situation could well change as the country's economic recovery continues to strengthen and employment levels accelerate. 

The organisation's labour market adviser Gerwyn Davies said: "Skills shortages, currently concentrated in particular sectors and occupations in the domestic labour market, could soon begin to spread to other parts of the labour market putting upward pressure on pay.

"Employers need to be developing existing workers, as well as hiring new ones, if they’re to mitigate this risk and ensure they have the skills to grow."

Several national surveys have demonstrated expectations businesses will increase their investment levels over the course of the year and the CIPD believes employers should be looking to place training at the top of this list of priorities for this spending.

In addition to helping to ensure these companies are in a position to grow and prepared to deal with future demands, the organisation stated this will also be a key factor in boosting the UK's productivity levels and improving pay prospects for employees who have yet to feel the benefits of the economic recovery.

The CIPD warned that if action is not taken, certain sectors of the labour market may overheat, which would further damage production and cause the UK to fall behind in terms of competitiveness in international markets.