A CHRONIC shortage of skills is posing a major threat to local employers a new report warns.

The lack of available talent threatens to hinder the plans of expanding regional companies looking to take on more staff in the next three months, according to the latest employment outlook survey from workforce specialist Manpower.

The company, whose survey is based on responses from 2,000 UK firms, warns that unless the supply of skills in the region improves, the Government's plans for a Northern Powerhouse could tun into a Northern 'power cut'.

Amanda White, Manpower operations manager, said skilled candidates could see Northern employers enticing them with higher pay packets.

She said: “While many employers in the south can rely on a steady supply of workers, there are far fewer qualified candidates in the north.

"From salespeople, to technical roles in manufacturing and renewable energy, employers in Yorkshire are facing real challenges in obtaining the talent they need. George Osborne said in March’s Budget that Yorkshire had created more jobs than France in the last year. But unless we see more talent coming into the market to fill these roles, his dream of a Northern Powerhouse will instead become a Northern power cut.

“However, in the short-term, there are benefits for employees in such a candidate-driven market. In the current environment, employers are increasingly willing to counter-offer in order to attract and retain people with the skills they need. Those with in-demand skills and experience may see an upward movement in pay and several offers on the table,”

One West Yorkshire Manpower client, a leading issuer of credit cards, was having trouble recruiting staff to fill hundreds of vacancies created by rising customer demand

"We see skills shortages as the single biggest barrier to the North’s growth across all sectors," Amanda White added.

Manpower's latest findings show that demand for staff remains strong, and employment stands at a 40-year record high. But it warns that the skills shortage is jeopardising the Government’s target to create two million jobs over the next five years.

Research by private equity group NVM among 36 unquoted small-to-medium firm in which it invests showed they had expanded their workforces by 91 per cent since it first invested.

NVM. whose portfolio includes food and confectionery wholesale group Kitwave, which operates FW Bishop & Son in Bradford, said its North east-based holdings have a 29 per cent share of employment growth across its UK portfolio, with firms recruiting to support organic growth, new products and services, acquisitions and to fill a skills gap, with 30 per cent of recruits aged between 18 and 24.