For the first time in a decade, fewer UK employers are reporting skills shortages, according to the 2025 Talent Shortage Survey from ManpowerGroup.
The proportion of organisations experiencing talent scarcity has fallen from 80 percent to 76 percent, suggesting that the UK may have passed the peak of its skills gap.
Michael Stull, UK Managing Director of ManpowerGroup, cautioned against celebrating prematurely. He said, “The significant drop in the UK Talent Shortage could mean we’re over the peak of the skills gap which has intensified over the past decade since its last drop in 2014. Organisations have worked hard during this time to drive positive change amidst major challenges; by upskilling, reskilling, seeking out new talent pools and through smarter use of technology.”
Stull added that this decline coincides with other indicators of a hiring slowdown.
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“Although any movement towards closing the skills gap is positive, we must bear in mind that many other indicators point to a hiring recession,” he said. “There are fewer jobs out there and this is playing a role in slowing the demand for skills.” He urged employers and government to maintain focus on measures to boost productivity to avoid an economic downturn.
The four percentage-point drop in skills shortages marks the most movement in the survey for five years. The UK is now closer to the global average, where 74 percent of employers report challenges in finding talent.
“Now is the time for a smart response that doesn’t rest on improvements already made,” Stull added.
Employers Adapt to Changing Market Needs
The survey looked at how employers are adjusting to evolving market conditions following years of economic and social upheaval. Many businesses are now seeking broader, less specialised skill sets and finding ways to work with the talent available.
Upskilling and reskilling remain the most popular strategies for addressing talent shortages, with 28 percent of employers investing in their current workforce to improve internal mobility and reduce recruitment costs. Targeting new talent pools is a priority for 23 percent of employers, while 21 percent are increasing wages to attract candidates. However, temporary recruitment is less favoured, with only 14 percent of employers adopting this approach.
Demand for specific skills has shifted over the past decade. IT and data skills are now the most sought-after, rising from eighth place in 2014. Customer-facing and office support roles are also in high demand, driven by increased interest in in-person experiences. In contrast, the need for technical, manufacturing, and production skills has declined.
Engineering skills remain in demand, while sales and marketing roles have seen a rise in priority. Administrative and office support skills have decreased in importance, as AI and technology increasingly automate these functions.
Preparing for Future Workforce Demands
Michael Stull pointed to the growing significance of sustainability and ESG skills, which were not tracked a decade ago but are expected to rise in importance over the coming years.
“Increased demand for in-person experiences has driven the growth in customer-facing and front office roles over recent years,” Stull noted. “While the drop in demand for technical, manufacturing, and production skills reflects how offshoring has had an impact following many high-profile factory and plant closures.”
He added, “While the UK macro circumstances remain challenging, any closing of the skills gap should be seen as a sign of green shoots for improving productivity. But we can’t rest where we are and must continue to invest in training and development, preparing thoroughly for further changes in workplace legislation, and adapting recruitment practices without compromising on longer-term goals.”
Alessandra Pacelli is a journalist and author contributing to HRreview, an HR news and opinion publication, where she covers topics including labour market trends, employment costs, and workplace issues. She is a journalism graduate and self-described lifelong dog lover who has also written for Dogs Today magazine since 2014.
- Alessandra Pacelli
- Alessandra Pacelli
- Alessandra Pacelli
- Alessandra Pacelli
