OUR latest Quarterly Economic Indicator report highlights the many key challenges facing Scottish businesses, but none are more pressing than the volatile labour market and the pressure on finding the right skills and talent to help our economy grow.

Strong competition for labour and skills is leaving many firms with job vacancies that they simply can’t fill, and that lack of staff is making it difficult for firms to fulfil orders. Inflation is also placing great pressure on businesses to meet growing demands for higher wages, with some sectors such as agriculture and tourism experiencing significant impacts from Brexit.

Scottish firms address key factor undermining expansion

These recruitment difficulties continue to be a significant challenge with 55% of businesses highlighting this as a pressing and worrying issue. On top of that, nearly one-quarter of employers surveyed expect those staff numbers will need to increase to help them meet demand.

Although official labour market statistics would indicate that the overall employment and unemployment figures have remained stable, our data indicates that businesses continue to face significant challenges hiring the people that they need.

An ageing population combined with the prospect of reduced net migration to Scotland also poses a substantial challenge to Scotland’s long-term economic prosperity and the needs of businesses to access the necessary skills and talent.

Our people are at the heart of our businesses. We need access to the best talent to drive business growth and a clear plan to upskill and reskill our workforce at all levels.

Productivity growth is the sustainable way to secure growth in quality jobs and increase economic opportunities. Our view is that the single most important contributing factor is education, training and upskilling at all levels.

Chamber issues ‘wake-up call’ as business investment flatlines

As the frontline business support organisation, we understand the needs of Scotland’s businesses and the policy levers required to ensure growth in the economy. From a people perspective that includes, workforce development, upskilling/reskilling and apprenticeships which align with economic/market needs.

To deliver this, we need to continue investing with an agile and light-footed approach which enables delivery partners and agencies to respond to industry demand.

We therefore must be focused on ensuring our domestic skills and labour are supported into the jobs market, with many initiatives and reforms under way involving a range of industry, public and third-sector partners all working toward the common goal of ensuring fair and prosperous work for all.

This collaborative approach to solving the skills problem is exactly why we are fully supportive of, and heavily involved, in Scottish Careers Week, an initiative developed by Skills Development Scotland which is now entering its third year.

The week, which returns on November 13, comes at an important time to galvanise the business community around engaging local talent and showcasing sector opportunities, exactly for the reasons mentioned above.

Under the theme “Shape the Future”, the wide range of events and activities throughout the week will help people of all ages explore and manage their career choices, while offering employers the opportunity to showcase pathways into their sectors.

We are proud to return as a key partner and supporter of Scottish Careers Week in the form of a webinar called Career choices: collaborating to inform the next generation.

Attendees will hear about SDS’s national careers service offer for employers, including live examples of its collaboration with industry to attract and retain the talent needed to grow their businesses.

Through collaboration between Scotland’s private and public sectors on the critical issue of skills, we can work together to provide the best possible platform for all to find new exciting opportunities for our businesses and people to flourish.

Dr Liz Cameron CBE is chief executive of Scottish Chambers of Commerce