In a stark revelation, the recently published Business Barometer report for this year, jointly issued by The Open University and the British Chambers of Commerce, indicates that an alarming 73 percent of organisations in the United Kingdom are currently grappling with skills shortages.
This persistent issue remains a top challenge faced by employers across the nation.
The annual report serves as a crucial assessment of the UK’s skills landscape and sheds light on the pressing need for action.
Shockingly, the report also uncovers that over half (54%) of the organisations surveyed have no specific initiatives, skills programs, or workplace adjustments in place to address the scarcity of talent, including individuals from underrepresented groups such as people with disabilities or diverse ethnic backgrounds.
This oversight suggests that employers are overlooking a vast reservoir of hidden talent, missing a unique opportunity to nurture and develop their own skilled workforce. Additionally, 42 percent of organisations admit that they have been unable to fill vacant positions due to a lack of qualified applicants, further exacerbating the impact of the skills shortage.
The skills shortage: what about existing staff?
Moreover, the ongoing skills crisis is taking a toll on the well-being and morale of existing staff. A staggering 72 percent of organisations report an increased workload on their employees, leading to potential burnout and decreased job satisfaction. Compounding the issue, organisations are also witnessing a decline in activity or output (42%) and a setback in long-term growth plans (40%).
These distressing consequences of the skills shortage pose a significant threat to the future of organisations, impeding their ability to meet targets related to sustainability, diversity, equality, and inclusion, including the crucial goal of achieving Net Zero emissions.
Replacements look sparce
Another concerning aspect is the looming retirement of experienced workers without an adequate pipeline of skilled replacements. The report highlights that 31 percent of organisations have observed a rise in the number of employees aged 50 and above within the last three years. However, despite the aging workforce, a startling 85 percent of organisations lack any specific initiatives tailored to workers over 50. Furthermore, a staggering 77 percent of organisations fail to prepare for the departure of employees through written annual plans.
While there is a collective acknowledgment of the skills shortage and a shared commitment to address the issue, with 79 percent of organisations intending to provide training for their staff in the next twelve months, the report reveals a critical deficiency in expertise and resources, particularly among small and medium-sized enterprises (SMEs). Consequently, many firms find themselves caught in a vicious cycle of perpetual recruitment and retention challenges.
The findings of the Business Barometer report serve as a clarion call for urgent action from government bodies, educational institutions, and employers alike. A collaborative effort is imperative to bridge the skills gaps, establish inclusive recruitment practices, and equip organisations, especially SMEs, with the necessary tools and support to address the challenges effectively. Failure to address these issues may have far-reaching consequences, not only for individual businesses but also for the broader economy, as well as hindering progress towards crucial sustainability and diversity goals.
Baroness Martha Lane Fox CBE, Chancellor at The Open University and President of the British Chambers of Commerce commented:
“It’s clear from this year’s Business Barometer report that the skills shortage has not improved, despite the existing efforts from organisations across the UK. We haven’t solved it yet.
“But what is even more concerning is that organisations aren’t investing in specific talent pools, including underrepresented groups. If organisations continue to ignore these workers, they risk missing out on untapped talent and deepening the skills gap even further.
“There could be a big opportunity for employers here if hidden talent is given a boost.”
Jane Gratton, Head of People Policy at the British Chambers of Commerce, comments on the skills shortage:
“Skills shortages are biting hard; damaging businesses and holding back our economic growth. Never has it been more important for businesses, governments and training providers to work together to find solutions. There’s no doubt that more investment in training and reskilling is essential – together with a laser-like focus on boosting technical skills at all levels – and, crucially, creating a much more agile and flexible skills system to help employers who are struggling with hard-to-fill job vacancies.”
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.
