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More than two-thirds of UK businesses facing skills shortage

·Business Reporter, Yahoo Finance UK
·2-min read
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A shortage of skilled labour is costing the UK food and farming industries millions of pounds a year. Reuters/Nigel Roddis

A growing number of UK businesses are suffering from slower growth and shrinking trade thanks to the continued skill shortage across the country.

According to the Open University’s annual Business Barometer report, which was conducted in partnership with the British Chambers of Commerce (BCC), more than two-thirds (68%) of small to medium-sized enterprises admitted they were struggling with depleted staff numbers.

This figure rose to 86% for large organisations.

The report revealed that the shortage had a knock-on effect on company performance, with 78% of firms saying they had seen reduced output, profitability, or growth, while 28% of businesses stated that they have had to turn down work as a result of staffing problems.

Employee wellbeing has also taken a significant hit, with 72% of organisations surveyed saying that the workloads had risen as a result. This was compared to the 56% of companies feeling this way at the same time last year.

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Respondents said the COVID-19 pandemic, Brexit, the war in Ukraine, and rising business costs were all to blame for the ongoing skills shortage.

The report also found that more than half (52%) of larger businesses and 47% of SMEs are looking to commit to increasing investment in staff training over the next year.

However, micro organisations, which have less than 10 employees in total, are set to face the most problems in addressing workforce issues, with only 39% planning to increase investment in staff training in 2023.

The survey was conducted online by the BCC between 11 and 29 April, with more than 1,300 organisations surveyed.

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“Skills shortages are worsening, and the country can ill afford this drag on the economy as we recover from the pandemic and grapple with the impact of geo-political events,” Jane Gratton, head of people policy at the BCC, said.

“We need an agile skills system that can respond quickly to the evolving needs of businesses, supporting the transition to a more digital, automated, and net-zero workplace and giving firms the confidence to boost investment in training and development.”

It comes as the Office for National Statistics (ONS) revealed last month that overall job vacancies rose to a fresh record high of 1.3 million.

More than a tenth of these vacancies were in the hospitality sector, which has seen rapid growth in job creation since the easing of pandemic restrictions.

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