Despite modest improvements in addressing skills shortages from last year, UK businesses continue to face significant challenges across various sectors. The latest Business Barometer report reveals that only 19% of organisations have implemented a written skills plan this year. This lack of strategic planning severely limits their ability to tackle current skills gaps and prepare for future demands.
A primary concern highlighted in the report is the low confidence in adopting new AI and green technologies, with 64% of organisations experiencing difficulties. These technologies are essential for the growth and sustainability of the UK economy. The prevailing skills shortages and lack of confidence are also affecting staff morale and wellbeing, with 68% of employers noting increased employee workloads due to these shortages.
Training and development are crucial for resolving these issues. The report found that nearly two-fifths (39%) of businesses plan to use mentoring or coaching to foster a supportive learning environment and develop skills in the next twelve months. This approach is intended to enhance employee attraction, engagement, and retention.
Encouragingly, 86% of businesses using apprenticeship programmes plan to increase or maintain the number of apprenticeships over the next year. This commitment underscores the importance of apprenticeships in cultivating new talent and facilitating career changes to address specific skills needs.
However, the report also highlights a significant gap: a majority of businesses (63%) lack specific recruitment, training, and retention initiatives for underrepresented groups, such as young people, older workers, those with disabilities, and neurodiverse individuals. This oversight suggests a missed opportunity for organisations to expand their talent pools and alleviate skills shortages.
Baroness Martha Lane Fox CBE, Chancellor at The Open University and President of the British Chambers of Commerce, stated, “Despite small signs of improvement, the skills gap remains stubbornly high. This year’s Business Barometer exposes the impact of this enduring challenge, including overwork, diminished productivity, and compromised wellbeing. The critically low confidence in AI and green technology and the lack of strategic plans to engage vital underrepresented groups are concerning. By fostering innovative strategies and inclusive initiatives, we can bridge the skills gap and build a more resilient workforce.”
Viren Patel, Director of Employers and Partnerships at The Open University, added, “Skills shortages are impacting businesses and staff across the country. Employers need to plan effectively and implement flexible, inclusive initiatives to develop and retain existing talent and attract more diverse groups into the workforce. With the majority (70%) of students at The Open University currently working full or part-time during their studies, we are well equipped to support organisations through the skills shortage, offering flexible courses and utilising the latest online technology to fit around business priorities and personal responsibilities.”
The report underscores the urgent need for UK businesses to adopt strategic and inclusive approaches to skills development, particularly in emerging fields like AI and green technologies, to ensure future growth and sustainability.