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OR: Scotland’s skills shortage persists despite progress
New data from this year’s Business Barometer report, published by The Open University in partnership with the British Chambers of Commerce, revealed that more than half (56%) of Scottish organizations are still reporting a worrying skills shortage.
According to the annual report, which monitors the current skills landscape in the UK, this figure is lower than the UK average of 62%, but represents a modest improvement on the 2023 UK results, when almost three-quarters (73%) reported skills shortages. However, despite this, less than one in four (23%) organizations have implemented a written skills plan for their workforce this year, hampering their ability to strategically address these issues and prepare for future demands.
While 56% of organizations reported a lack of confidence in applying new AI and 47% in adopting green technologies, employers agree that these skills are crucial to the growth and sustainability of UK businesses and the wider economy.
Skills shortages and lack of confidence continue to have a knock-on effect on employee morale and wellbeing, as 77% of employers say shortages have increased their employees’ workload – a clear indicator of that employers need a strategic and inclusive skills plan to develop talent to fill essential skills gaps.
Training and development are critical areas of focus for many organizations. The report revealed that almost two-fifths (38%) of Scottish businesses intend to use mentoring or coaching in the next twelve months, helping to develop skills as well as promoting a supportive learning environment to increase employee attraction, engagement and retention. . Another 32% intend to use apprenticeships next year, demonstrating the value that many organizations find in this type of training.
But while there is a commitment to addressing skills shortages by some organisations, the report reveals that the majority of companies (52%) still do not have specific recruitment, training and retention initiatives in place for under-represented groups, including young people, older workers, people with disabilities and neurodiverse individuals. As a result, organizations may be missing out by not investing in expanding their talent pools to mitigate skills shortages.
Baroness Martha Lane Fox CBE, Chancellor of the Open University and President of the British Chambers of Commerce, said: “Despite small signs of improvement, the skills gap remains stubbornly high. This year’s Business Barometer exposes the impact of this enduring challenge on organizations of all types, including overwork, decreased productivity and compromised well-being.
“What is concerning is the critically low trust in AI and green technology and the lack of strategic plans or initiatives to engage vital underrepresented groups – both essential to addressing the fundamental challenges of our future.
“By promoting innovative strategies and inclusive initiatives, we can close the skills gap and build a more resilient workforce.”
David Allensenior partnerships manager at The Open University in Scotland, added: “While it is encouraging that the number of Scottish businesses reporting skills shortages is lower than the UK average, the fact that more than half are still facing these challenges indicates that there are more work ahead.
“Rapid advances in green innovations and AI are understandably challenging for many organizations. However, it is promising to see that Scottish companies are showing more confidence in adopting new technologies compared to their UK counterparts. I urge business leaders to be proactive and take advantage of the strategic support that organizations like The Open University can provide.
“With over 70% of our 19,500 students working whilst studying, our flexible online courses perfectly meet business needs. By empowering organizations to upskill in crucial areas such as AI and green innovations, we can close the skills gap and build a resilient, future-proof workforce, driving sustainable growth across Scotland.”
Anna Ashton Scott, head of skills at The Data Lab, Scotland’s innovation hub for data and AI, commented: “Promoting data and AI literacy, as well as providing robust technical education and leadership training, remains crucial to increasing productivity. and drive innovation. AI technologies can be transformative for companies, but bringing employees into this journey is essential, as is understanding how to apply these tools in an ethical and inclusive way.
“While it is encouraging to see Scottish businesses demonstrating more confidence in applying AI technologies compared to their UK counterparts, more needs to be done to support the 56% of organizations that lack confidence.
“In a time of rapid technological advancement and growing skills gaps, improving skills across all areas of the business and not just technical teams can help empower people and organizations to navigate the evolving data and AI landscape. As part of Scotland’s Innovation Infrastructure, the Data Lab works with partners, stakeholders and the community to help drive this change.”