House prices driving recruiting problems for businesses

PUBLISHED: 12:02 29 October 2018

Cllr Lewis Herbert, Leader of Cambridge City Council

Cllr Lewis Herbert, Leader of Cambridge City Council

Archant

The high cost of living and working in and around Cambridge has been blamed for problems recruiting staff in some key businesses, and must be addressed if the region is to succeed in the future, a report says.

The report, commissioned by business group Cambridge Ahead and the Cambridgeshire and Peterborough Combined Authority has shone a spotlight on skills shortages in the regional labour pool, with local leaders saying high house prices are already putting people off moving to the area.

The report, published today (October 24) by RAND Europe, says that while the Greater Cambridge Greater Peterborough (GCGP) region is a “highly prosperous area, with prodigious job growth”, some of the businesses key to the region’s success are having difficulty filling vacancies for important roles.

The report has found that, while employers in the GCGP region have a similar share of vacancies and hard-to-fill vacancies as in the rest of England, the life sciences and the information and communications sectors, two of the priority sectors for the regional economy, experience a higher rate of vacancies and skills shortages than in other parts of England.

The report reads: “Given the importance of these sectors for the regional economy, it is essential to address the skills demand challenges to ensure further growth in these sectors.”

Lewis Herbert, leader of Cambridge City Council and combined authority board member, said: “As the RAND report shows, Greater Cambridge and Cambridgeshire need to radically improve our skills development offer for local people as there are some of the best UK career opportunities right here in Cambridge, and the Greater Cambridge Partnership and the larger area Combined Authority are working on just that.”

According to the report, skills shortages are reported in both high-skilled jobs and low-skilled jobs.

The report says: “Since further demand is projected in professional and knowledge-intensive roles, an adequate supply of highly qualified workers is crucial for local business growth.”

Bridget Smith, leader of South Cambridgeshire District Council and combined authority board member, said she has noticed businesses of all types are struggling to recruit and retain staff.

“It is because house prices are too high,” said Cllr Smith. “It is beginning to impact on companies’ ability to recruit and retain staff. Certainly, in my own council, I am horrified at the amount of my own staff who can’t afford to live in the area.”

Cllr Smith said Cambridge was losing out to other cities like Nottingham where good public transport and more affordable homes were allowing people to lead a better quality of life.

Cllr Herbert said businesses needed to pay higher wages to make sure staff in lower-paid jobs could afford to live in or near to Cambridge.

Cllr Herbert said: “On lower paid jobs, staff retention is the central issue, and employers need to shift like industry leaders to paying the Real Living Wage, first so their employees can afford high housing costs in Cambridge, but second out of sheer self-interest, as paying fair wages radically improves staff motivation and retention, massive issues in our city where there are currently so often more vacancies than applicants at all levels.”

RAND says more employers could offer training to staff as a way to entice more people into roles and “upskill” the local workforce.

“A potential solution is to provide more opportunities to upskill the local workforce,” the report suggests. “Especially given that employers in the Cambridge area currently do not engage in the provision of training to the same extent as businesses in the rest of England.”

As well as this, the report warns that Brexit could have an impact on the number of staff available for certain roles.

The report says: “The UK’s decision to leave the EU will inevitably bring consequences for the national and local economy and businesses. Among others, these include that the post-Brexit trade arrangements with the EU will potentially make it more difficult for UK businesses to sell services to EU countries, e.g. due to making exporting more complex or because of currency fluctuations.

“As a result, there could be a decrease in the demand for UK services and thus smaller opportunities for business growth. Accessing skills could also be a concern, in particular for some sectors of the economy that currently rely on migrant workers. Locally, around a third of current economically active Cambridge residents were born outside of the UK, including around 15 per cent who were born in other EU member states.

“Many of these migrants are highly skilled and work in well-paid jobs. On average, 55 per cent of EU migrants in Cambridge have a university degree, compared with just 43 per cent of the UK-born population.”

Cllr Herbert said: “Whatever happens on our wider and vital future with the EU, it is absolutely critical for our future properity as a city that the Government sorts out flexible freedom of movement for all sectors of our local economy where it is clear that recruitment within the UK alone is not going to be enough for Cambridge needs.”

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