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The Business Barometer 2024: 62% of organisations facing skills shortages | Sector Reaction

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The latest edition of The Business Barometer report published by The Open University, in partnership with the British Chambers of Commerce, has found that longstanding skill challenges remain which are hampering organisations in a number of ways.

A UK-wide employer survey of more than 1,300 employers, found that 62% of organisations are currently facing skills shortages. While this is down from 73% in 2023, the ongoing impacts are widespread. 

  • 64% say they are not confident about applying new AI and green technologies.
  • 68% of organisations with shortages acknowledge this increases workload on existing staff.

While many employers are responding by offering training and committing to expanding apprenticeship numbers, the report also reveals a lack of strategic planning when it comes to tackling the skills gap.

  • Only 19% say they have implemented a written skills plan for 2024, while 71% have not.
  • 63% of organisations do not have specific recruitment, retention, or training initiatives for targeted groups such as people with disabilities or younger workers.

The report concludes with a number of recommendations to help employers to tackle skills gaps and make the case for proactive investment in growing their own talent.

View the Full Report here

View the report’s methodology

Baroness Martha Lane Fox CBE Chancellor at The Open University and President of the British Chambers of Commerce Said:

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.

Viren Patel Director of Employers and Partnerships at The Open University Said:

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.

Sector Reaction

David Hughes, Chief Executive, Association of Colleges, said:  

“This research from The Open University and the British Chambers of Commerce shows yet again the very real consequences the skills gap is having for all businesses across the country and the need for businesses and the government to invest more. Failing to address technology changes will result in slower economic growth, more business failures and too many people left behind.

“At AoC, we have been urging government to recognise the pivotal role colleges have to play in closing this gap. We published data in October 2023 which found that around half of colleges have introduced extra courses in construction, engineering, digital, health and social care in response to employer and learner demand. However, our survey also found that learner demand is outstripping the government funding they have available in all four areas, resulting in waiting lists in the four sectors which are in desperate need of skilled workers. 

“A growing economy needs ongoing investment in skills, for jobs today and to be agile as job needs change with the development of AI and technology. Sadly, that investment is lacking in our country – post-16 education funding is still way behind what is needed to boost economic growth.”  

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