More than three quarters of UK firms have said they are seeing trading hit or growth stalled amid intensifying skills shortages.
The Open University’s annual Business Barometer report, which was conducted in partnership with the British Chambers of Commerce (BCC) this year, found that more than two thirds (68%) of small to medium-sized enterprises (SMEs) are facing skills shortages, with the figure rising to 86% for large organisations.
The shortage is having a knock-on impact on company performance, with 78% of firms noting they have seen reduced output, profitability, or growth, while 28% of businesses stated that they have had to turn down work as a result of staffing woes.
Staff wellbeing has also taken a significant hit, with 72% of organisations surveyed saying that the workload for staff has increased as a result, compared to the 56% of companies feeling this way in 2021.
Factors including the pandemic, Brexit, the war in Ukraine and rising business costs were all cited as being linked to the ongoing skills shortage.
Jane Gratton, head of people policy at the BCC, said the country can “ill afford” the shortages, which are a “drag on the economy” and an agile skills system is urgently needed.
“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
“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.”
Last month, the Office for National Statistics (ONS) revealed that overall job vacancies rose to a new record of 1.3 million.
More than a tenth of these vacancies were in the hospitality sector, which has seen rapid growth in job creation after the easing of pandemic restrictions.
The Open University report found that more than half (52%) of larger businesses and 47% of SMEs have said they will increase investment in staff training over the next year.
However, micro organisations, which have less that 10 employees, look 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 April 11 and 29, and 1,310 organisations were surveyed.