Businesses lack confidence in AI and green technologies as the skills shortage persists

• Across the UK almost two thirds (62%) of organisations continue to struggle with skills gaps
• The majority (64%) of businesses lack the confidence to apply either AI or green technologies into their organisation
• Martha Lane Fox, Chancellor of The Open University, and President of British Chambers of Commerce warns organisations need to implement flexible skills plans and inclusive initiatives to build confidence, bridge the skills gap and build a more resilient workforce

New data from this year’s Business Barometer report published by The Open University in partnership with the British Chambers of Commerce, has found that nearly two thirds (62%) of UK organisations are still reporting worrying skills shortages. 

The annual report, monitoring the current UK skills landscape, highlights that although there is a modest improvement with slightly fewer organisations reporting skills shortages, down from 73% to 62%. However, skills shortages remain a prevalent issue across sectors and regions in all four nations. Despite this, less than one in five (19%) organisations have implemented a written skills plan for their workforce this year, hindering the ability to strategically address these issues and prepare for future demands.  

In particular, organisations have reported a lack of confidence (64%) in applying either new AI or green technologies, skills that employers agree are crucial to growth and sustainability for UK businesses and the wider economy.  Skills shortages and this lack of confidence, continue to have a knock-on effect on staff morale and wellbeing, as 68% of employers say shortages have increased the workload of their employees. This is a clear indicator that employers need a strategic, inclusive skills plan to develop talent to fill key skills gaps.  

Training and development are critical areas of focus for many organisations. The report has revealed that almost two-fifths (39%) of businesses intend to use mentoring or coaching within the next twelve months, helping to develop skills as well as fostering a supportive learning environment to enhance employee attraction, engagement and retention.  

Encouragingly, 86% of organisations that currently use apprenticeship programmes are expecting to increase or commit to the same number of learners over the next 12 months, highlighting the value placed on apprenticeships as a means of cultivating new talent and facilitating career changers to address specific skills needs. 

But whilst there is a commitment to address the skills shortage from some organisations, the report reveals the majority of businesses (63%) still do not have specific recruitment, training and retention initiatives in place for underrepresented groups, including young people, older workers, those with disabilities and neurodiverse individuals. As a result, organisations may be missing out by not investing in widening their talent pools to mitigate skills shortages. 

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

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 commented: 

Skills shortages are impacting businesses and staff across the country and employers need to plan effectively and implement flexible initiatives to develop existing talent. 

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.” 

Download the report