A recent Business Barometer report from The Open University, in collaboration with the British Chambers of Commerce, has revealed that nearly two-thirds (62%) of UK organisations continue to grapple with significant skills shortages.

Despite a slight improvement from last year, when 73 percent of organisations reported skills gaps, the issue remains a pressing concern across various sectors and regions.

This year’s findings also highlight a lack of confidence among businesses in integrating new AI and green technologies, with 64 percent of organisations expressing doubts about their ability to apply these advancements effectively.

Such technologies are crucial for growth and sustainability, but the persistent skills gaps are exacerbating the challenges businesses face in adopting them.

Also, the report notes that only 19 percent of organisations have developed a written skills plan to address these gaps, impeding strategic workforce planning and future readiness.

Technological integration

The impact of skills shortages extends beyond technological integration. According to the report, 68 percent of employers have noticed an increased workload on their staff, adversely affecting morale and wellbeing. This underscores the urgent need for strategic and inclusive skills development plans to cultivate the necessary talent and alleviate workforce strain.

Training and development remain critical priorities for many organisations. The report reveals that almost two-fifths (39%) of businesses plan to implement mentoring or coaching programs within the next year. These initiatives are aimed at fostering a supportive learning environment that enhances employee attraction, engagement, and retention.

Apprenticeship programmes are also gaining traction, with 86 percent of businesses that currently use them intending to increase or maintain their number of apprentices over the next year. This commitment underscores the value placed on apprenticeships as a means to develop new talent and facilitate career changes to meet specific skills needs.

Despite these efforts, the report highlights a significant gap in inclusivity. A majority of businesses (63%) do not have specific recruitment, training, and retention initiatives for underrepresented groups, such as young people, older workers, individuals with disabilities, and neurodiverse individuals. By not investing in these diverse talent pools, organisations may be missing crucial opportunities to mitigate skills shortages.

Baroness Martha Lane Fox CBE, Chancellor of The Open University and President of the British Chambers of Commerce, emphasised the severity of the situation: “Despite tiny green shoots of improvement, the skills gap remains stubbornly high. This year’s Business Barometer exposes the impact of this enduring challenge on organisations of all types, including overwork, diminished productivity, and compromised wellbeing.

What’s concerning is the critically low confidence in AI and green technology and the lack of strategic plans or initiatives to engage vital underrepresented groups – both of which are essential to addressing the pivotal challenges of our future.

By fostering innovative strategies and inclusive initiatives, we can bridge the skills gap and build a more resilient workforce.”

Employers need to be flexible to address skills shortages

Viren Patel, Director of Employers and Partnerships at The Open University, added: “Skills shortages are impacting businesses and staff across the country and 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.”

As businesses navigate these ongoing challenges, the emphasis on strategic planning, inclusive initiatives, and confidence-building in new technologies remains paramount to fostering a resilient and skilled workforce.

 

 

 

 

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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.