Skills shortages across the UK have eased slightly since the height of the pandemic but remain a persistent issue, particularly for smaller employers and key sectors.
The latest Employer Skills Survey, published by the Department for Education, shows that skills shortage vacancies fell from 36 percent in 2022 to 27 percent in 2024. This marks progress, but the current figure remains comparable to 2017 levels when 22 percent of vacancies were attributed to skills shortages.
The report found that although pressures have reduced from the pandemic peak, structural challenges in matching available talent to labour market needs remain entrenched. High-value sectors such as construction, health and social care, and manufacturing continue to report hiring difficulties.
Small businesses disproportionately affected by shortages
Dr Joe Marshall, Chief Executive of the National Centre for Universities and Business (NCUB), said, “The drop in skills shortage vacancies from 36 percent to 27 percent is encouraging, but we must not be complacent. The fact that we remain above 2017 levels – rather than significantly improving – tells us that this is not a short-term issue. The UK’s longstanding skills mismatches continue to hold back innovation, productivity and growth.”
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The survey shows a divide in how businesses of different sizes are affected. Larger employers, those with more than 100 staff, have seen a significant decline in skills shortages, from 34 percent in 2022 to 19 percent in 2024. In contrast, micro businesses employing 2 to 4 staff continue to experience the highest levels of shortage, at 42 percent – unchanged from 2022.
Dr Marshall commented, “This suggests that smaller firms lack the resources and networks to compete effectively for skilled talent, creating a two-tier labour market that risks leaving our most entrepreneurial businesses behind.”
Call for stronger education-industry collaboration
The NCUB is calling for a more coordinated approach between the education sector and employers to address long-standing skills gaps. According to Dr Marshall, universities can play a central role in improving the UK’s talent pipeline, but this will require deeper collaboration and more responsive course design.
“To address this, we need a more joined-up approach between education and industry. Universities have a critical role in preparing graduates with the skills employers need – but this requires deeper collaboration, clearer routes into priority sectors and long-term investment in talent development,” he said.
The NCUB has identified four areas where targeted intervention could strengthen the UK’s skills system. These include expanding access to work-based learning, ensuring that employers play a leading role in course design, and improving data sharing on regional and sector-specific skills needs. Additionally, the organisation recommends targeted support for sectors under the most pressure and more funding to help SMEs participate in skills development initiatives.
Sector-specific shortages persist
While the survey shows a broad easing in skills shortage intensity, some sectors remain persistently affected. Construction, health and social care, and manufacturing continue to report higher-than-average vacancy rates caused by a lack of suitable applicants.
These sectors often rely on technical and vocational expertise that can take years to build. Addressing these shortages will require sustained investment and a renewed focus on routes such as apprenticeships, technical education and regional workforce planning.
Dr Marshall added, “In a changing labour market, skills are the bridge to opportunity. Universities, employers and policymakers must work together to ensure that bridge is fit for the future.”
