Staff shortages ‘curbing UK business activity’

More than three-quarters of UK businesses are experiencing reduced output, profitability or growth because of skills shortages, according to a new survey.

skills shortage open uni
The Open University’s 'Business Barometer 2022', produced in conjunction with the British Chambers of Commerce (BCC), also found that 72% of companies reported the shortages had increased workloads on staff, affecting morale and wellbeing.

At a time when there are more vacancies in the UK than there are people registered as unemployed, the report pointed out that the deleterious effects on workforces had increased "dramatically" since last year's survey, when only 56% said their staff were experiencing additional pressures.

In the survey of more than 1,300 organisations, just over half of large companies said they planned to invest in more staff training in the coming 12 months in a bid to overcome skills shortages. The figure among SMEs with similar plans was 47%.

Skills shortage continues to rise

Viren Patel, the Open University's director of business development, said: “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."

The survey also found that 28% of respondents said they had had to turn down business because of the knock-on effect of shortages, which are affecting 86% of large organisations and 68% of SMEs.

Will the UK be able to recover?

Jane Gratton, head of people policy at the BCC, said: “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.

“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.

“Planning for skills has never been more important and it’s time for employers, training providers and policy makers to work together to ensure the skills system delivers for individuals, businesses, and the economy.”

The survey was conducted online during April among 1,310 organisations from businesses of all sectors and sizes, and in all UK regions and nations.

Read more news and views from David Sapsted, June articles.

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