A growing gap between UK employers, and Gen Z workers may hinder efforts to tackle persistent skills shortages. A new report shows that over half of UK organisations (54%) are currently facing a skills gap, but only 33 percent have taken initiatives to hire, retain, or train those under 25.
The Open University’s The Barometer: Skills For Today And Tomorrow report also revealed that Gen Z candidates were acutely aware of the skills gaps in the UK and made career decisions accordingly. Seventy one percent of this cohort considers careers based on the skills most needed in UK. 69 percent will stay with an employer that offers training and development.
Despite these positive attitudes, however, 61 per cent of Gen Z respondents say they’ve never been told that they don’t have specific skills. This is despite the fact that 35 percent of employers list lack of “work-readiness” as their top obstacle to filling positions.
This mismatch is a result of the increasing importance of digital, AI and sustainability. Nearly half of Gen Z (48%) are currently working or interested in AI positions, but 20 percent of employers lack confidence to deliver AI strategies in the next five year due to talent shortages.
Baroness Martha Lane Fox CBE said that employers have a great opportunity and responsibility to shape the future workforce. There is talent out there. The talent is out there. They need employers who are willing to invest, clear training paths and practical support.
Employer action gap meets Gen Z motivation
The report found that despite widespread support for equal opportunity, diversity, and inclusion 23 percent of organizations have no initiatives to help under-represented groups. This includes returners, career changers, and workers with disabilities and neurodiversities. Despite this, 84 percent of employers believe ED&I to be important for their organization and half think it will increase in importance over the coming five years.
Phil Kenmore is the Director of Corporate Development and Partnerships for The Open University. He said: “The data are clear. There’s a mismatch in employer intentions and actual action. There’s a real opportunity in this. Employers should start by creating structured skill plans, working with educational providers, investing flexible training, and opening opportunities for more diverse talent. “The organisations that act now and integrate learning at all levels into their plans will thrive in the future.”
Since nearly a decade, the Barometer has been tracking the UK’s skills shortage. The overall proportion of employers experiencing shortages has stabilized since last year. However, the problem is still widespread in all sectors and across all regions. A third of employers (32%) believe that the skills gap will worsen in the next five year. Among the affected organisations, 40% report an increase in workload for other staff. 33% cite a reduction in productivity. 30% say they’ve scaled back their growth or expansion plans.
The cost pressures are also a factor: 61 per cent say that a higher National Insurance rate makes it more difficult to recruit or train new employees, and 54 per cent point out a higher National Minimum Wage.
Addressing skill shortages through inclusive education
In spite of the obvious impact of skill shortages, less than half (46%) of employers have a formal plan for skills development. Despite the fact that training has been shown to increase retention, 26 per cent of employers fear investing in training could lead to staff leaving. The report encourages companies to overcome this barrier through demonstrating career advancement and by linking development programs directly to future roles.
Baroness Lane Fox said, “While employers are facing economic challenges, they won’t wait for skills to appear – instead, they will build them inclusively and proactively to fuel growth, resilience, and to boost their productivity.”
The Barometer urges business leaders to work with educational providers to design clear career paths, and to commit resources to training. This will ensure Gen Z talent has the skills to be both engaged and ready for work.
