5 Strategic Solutions for Navigating the UK Skills Shortage

The UK is grappling with a significant skills shortage. If you’re subscribed to any business news outlets, spend any time on LinkedIn or have recently advertised a role, this won’t be news to you. Every man and his dog is talking about the skills shortage. No organisation or industry is immune and the consequences are being felt by both employers and job seekers.

But no one is talking about what it is, how it impacts your business OR what you can do about it.

In this blog, we’re going to unpick the term “skills shortage”, explore it’s effects on both businesses and job seekers, and offer practical strategies for overcoming these challenges.

The UK's Skills Shortage: A Growing Challenge

At its core, a skills shortage refers to a mismatch between the skills available in the workforce and the skills demanded by employers. This imbalance creates difficulties for businesses in filling vacancies, leading to operational challenges, reduced productivity, and hindered growth.

A staggering 36% of all job openings in the UK were classified as skills shortage vacancies, indicating a growing difficulty for employers in finding qualified candidates to fill critical roles.

Beyond the immediate impact on businesses, the skills shortage has broader economic consequences. Reduced productivity, delayed projects, and a potential decline in competitiveness are some of the risks associated with this issue. Moreover, the inability to fill vacancies can lead to increased workloads for existing employees, potentially affecting job satisfaction and turnover rates.

The data also highlights a growing digital divide. A significant portion of the UK population lacks the essential digital skills required for modern workplaces. In fact, 45% of UK employers reported that they have employees who lack necessary digital skills for their current roles. This digital skills gap presents a substantial challenge for businesses operating in an increasingly digital economy.

The Impact of the Skills Shortage on Businesses

The UK's skills shortage is having a profound impact on businesses across the nation. With a significant proportion of vacancies classified as "skills shortage vacancies (SSVs)," employers are facing unprecedented challenges in finding qualified candidates. Of those businesses with at least one SSV, 95% stated it has had a significant impact on business performance.

One of the most immediate consequences is increased operational strain. When businesses struggle to fill critical roles, existing staff often find themselves overburdened. According to a report by the British Chamber of Commerce, 68% reported that shortages had increased workloads for other staff, while other reports have this figure as high as 85%. A further 49% reported reduced activity or output and 34% reported decreased staff morale or wellbeing.

Moreover, the inability to fill vacancies can hinder business growth and innovation. As many as half of employers reported difficulties meeting customer service objectives due to staff shortages. Similarly, 45% faced delays in developing new products or services. This suggests that the skills shortage is not only a short-term challenge but also a long-term threat to the UK's economic competitiveness.

The specific impact of the skills shortage varies across industries. Sectors such as construction, manufacturing, and technology have been particularly hard hit. But SSVs aren’t industry-specific and their repercussions affect all businesses differently. For example, large organisations are more like to experience increased operating costs (61% compared to a 46-52% range in smaller groups) whereas micro-businesses are more susceptible to a loss of business to their competitors (53% compared to a 22-43% in larger groups). (Source: Employer Skills Survey)

With the skills shortage touching every aspect of the UK workforce and wider economy, it’s impact may feel like a foregone conclusion. But fear not! There are strategic changes you can make to counter its’ effects.

Overcoming the Skills Shortage: Strategies for Employers

The UK's skills shortage presents a significant challenge for businesses, but it also presents opportunities for those who can adapt and innovate. Effective strategies can help mitigate the impact of this issue and build a resilient workforce.

1. Invest in Talent Development:

Upskilling and Reskilling: Existing employees represent a valuable resource. Investing in training programs to upskill or reskill your workforce can help fill skills gaps internally.
Apprenticeships: Consider apprenticeships as a means to develop a skilled pipeline. This approach combines on-the-job training with formal education.
Graduate Schemes: Implement robust graduate schemes to attract and develop young talent with the potential to fill future skills gaps.

2. Expand the Talent Pool:

Diversity and Inclusion: Promote diversity and inclusion within your workforce. This can open up access to a wider pool of talent with different perspectives and skill sets.
Flexible Working: Offer flexible working arrangements to attract a broader range of candidates, including those with care responsibilities or those seeking work-life balance.
Talent Attraction: Utilise a variety of channels to attract candidates, including social media, job boards, and employee referrals. Partnering with a specialised headhunter like We Are Adam can provide an additional advantage in identifying and securing top talent in a competitive market.

3. Build Strong Employer Brand:

Employer Value Proposition: Clearly articulate your company's values, culture, and career development opportunities. This can attract top talent and improve employee retention.
Employee Experience: Prioritise employee well-being and satisfaction. A positive work environment can enhance your employer brand and attract and retain top talent.

4. Collaborate with Educational Institutions:

Partnerships: Collaborate with schools, colleges, and universities to develop tailored training programs that align with your business needs.
Work Placements: Offer work placements to students to provide them with practical experience and identify potential future employees.

5. Leverage Technology:

Automation: Explore automation technologies to improve efficiency and free up employees to focus on higher-value tasks.
Data Analytics: Use data analytics to identify skills gaps and inform talent management strategies.

By implementing these 5 strategies, organisations can not only address the immediate challenges posed by the skills shortage but also build a foundation for long-term success. Why? They not only help to bridge skills gaps but also contribute to a more diverse and inclusive workforce. These initiatives can help mitigate issues like ageism and socioeconomic bias, fostering a more equitable workplace.

The Skills Shortage: A Job Seeker's Perspective

The skills shortage presents a complex landscape for job seekers. With a higher proportion of vacancies classified as SSVs, competition for roles has intensified. Individuals may face longer job search periods and increased pressure to demonstrate the necessary skills and qualifications.

The digital skills gap further complicates the process. As technology continues to permeate the workplace, possessing digital proficiency becomes increasingly essential. For those without these skills, finding employment can be significantly more challenging.

However, the shortage also presents opportunities for those with in-demand skills. Certain sectors, such as technology and healthcare, may offer higher salaries and increased career prospects. To navigate this competitive job market successfully, job seekers must focus on continuous learning, upskilling, and tailoring their applications to specific roles.

While the situation can be daunting, it's essential to remember that the job market is dynamic. By understanding the skills in demand and proactively addressing their unique skill gaps, job seekers can improve their chances of securing fulfilling employment.

Struggling to stand out from the crowd? We wrote this blog to help you land your dream job.

The Future is Only Bleak if We Allow it To Be

The UK's skills shortage is a complex challenge with far-reaching implications for both businesses and job seekers. By understanding the extent of the problem and implementing strategic solutions, we can mitigate its impact and build a more resilient workforce. Investing in talent development, expanding the talent pool, and fostering a strong employer brand are crucial steps in this process.

We understand that navigating the complexities of the skills shortage can be daunting. That's where We Are Adam can help. Our team of experienced talent experts can provide tailored solutions to address your specific people challenges. Contact us today to discuss your business needs and explore how we can support your growth.