Talent mismatch costs UK companies more than £1bn

Businesses from all the major economies, including the UK, are losing billions of pounds through recruitment errors. This is mainly caused by employees' inability to adapt and retrain for new roles and industries.

PwC and LinkedIn released the study, Adapt to Survive, this week. It looks at a profile of 277 million professionals and 2,600 employers across 11 global markets. It attributes each market with a talent adaptability score, based on the country's ability to cope with future shifts in the market and measured by employees' transferrable skills. 

The UK ranks second for talent adaptability, but still loses over £1.2 billion through employees not willing or able to adapt to new sectors. It fares relatively well because of a large base of skilled workers, especially in London. The Netherlands has the highest adaptability rating, mostly down to the language skills of its workforce. 

The study suggests £96 billion is lost globally each year through a lack of talent adaptability, with less mature markets such as China and India faring the worst. China loses over £65 billion every year through its low talent adaptability, and India over £8.5 billion. This is attributed to a small number of sectors dominating the economy and high net migration figures meaning they lose millions of skilled workers every year. 

Many people predict the trend will reverse in the coming years, with skilled workers migrating to the large Asian economies as job opportunities grow. 

PwC partner and global head of HR services practice Michael Rendell said CEOs rewarding people who are willing to adapt is key to improving workplace mobility. "This includes using analytics to identify skills that are central to the business strategy now and in the future," he said. "Our research shows that a better talent fit between employer and employee could save UK business £270 million in recruitment costs, increase productivity and begin to close the skills gap."