Almost three-quarters (72%) of organisations say the impact of skills shortages is causing increased workload on other staff.

This statistic has crept up dramatically year on year, when only 56 percent of respondents from 2021’s report claimed their staff were experiencing additional pressure.

Also, 78 percent are seeing reduced output, profitability, or growth, according to data from The Open University and British Chambers of Commerce.

More than two-thirds (68%) of SMEs are currently facing skills shortages, rising to 86 percent in large organisations.

SMEs are also struggling to implement plans to address the skills shortage while nine in ten of large organisations have implemented some form of written plan.

 

How can this problem be addressed? 

To address the problem, more than half (52%) of large organisations will increase investment in staff training over the next year, compared to 47 percent of SMEs.

The knock-on effect of these shortages is also impacting company growth as 28 percent of businesses say they have had to turn down work or are not able to bid for work due to their staff shortage.

 

Skills shortage

The report also revealed more than two-thirds (68%) of SMEs are currently facing skills shortages.

This rises to 86 percent of large organisations, in stark comparison to last year’s report where almost a quarter (24 per cent) believed that finding staff with the right skillset was the single biggest challenge facing businesses.

Organisations reported they were feeling the full impact of complex socio-economic issues such as Covid-19, Brexit, the war in Ukraine and rising business costs – all feeding into the skills shortage.

But while nine of ten of large organisations are looking at a long-term strategic approach to skills gaps and have a written plan to address this, only 43 percent of micro organisations (with fewer than 10 employees) said they have some form of plan to address workforce issues.

 

Staff training

Similarly, more than half (52%) of large organisations will increase investment in staff training over the next year, compared to 39 percent of micros, showing that large organisations are currently better equipped to tackle recruitment challenges, despite reporting larger skills gaps.

Viren Patel, Director of the Business Development Unit at The Open University commented: “Our Business Barometer report highlights the need for employers to take a long-term strategic approach to addressing the skills gaps and that it’s more important than ever to take a proactive view on employees’ skills.

“The report also shows that recruitment is tougher than ever and that places a focus on growing talent from within and opening up opportunities for hidden talent both inside and outside the organisation. Critically, staff seem to be under more pressure than ever, looking at last year’s report, an increased amount of employers admit that the skills shortage is increasing their teams’ workload and wellbeing.

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.