According to new findings from STEM Learning (the largest provider of STEM education and careers support in the UK), the skills shortage is costing businesses £1.5 billion a year in recruitment, temporary staffing, inflated salaries and additional training costs.

The STEM Skills Indicator (www.stem.org.uk) reveals that 89% of STEM businesses have found it difficult to hire staff with the required skills in the last 12 months, leading to a current shortfall of over 173,000 workers.

These findings come as the UK is entering the ‘Fourth Industrial Revolution’, a time of significant technological, economic and societal change, plus severe funding challenges in schools.

As a result, the recruitment process is taking much longer for the majority (89%) of STEM employers — an average of 31 days more than expected.

This situation is forcing many to: turn to costly temporary staffing solutions (74%); hire at lower levels (65%); train staff in-house (83%); or inflate salaries (76%) by as much as £8,500 in larger companies, to attract the right talent.

Almost half of STEM businesses are looking abroad to find the right skills, while seven in 10 are hiring candidates without a STEM background — or simply leaving positions empty.

The latest findings also show that businesses are concerned about the outlook, with just over half of those surveyed expecting the shortage to worsen over the next 10 years, raising concerns that the UK could fall behind other countries in terms of technological advancement or lose its R&D credentials; others warn that a lack of talent could put off foreign investment in the sector.

STEM Learning chief executive Yvonne Baker said: “We are heading towards a perfect storm for STEM businesses in the UK — a very real skills crisis at a time of uncertainty for the economy and as schools are facing unprecedented challenges.

"The shortage is a problem for employers, society and the economy; and in this age of technological advancement, the UK has to keep pace. We need to be in a better position to home-grow our talent, but it cannot be left to government or schools alone – businesses too have a crucial role to play.

“STEM Learning bridges the gap between businesses and schools. By working with us to invest in teachers in local schools and colleges, employers can help deliver a world-leading STEM education.”