According to the Department for Education, there has been a decrease in the number of vacancies due to a skills shortage.
The DfE has published new data on the 2024 Employer Skill Survey. It shows that the proportion of vacancies with skills shortages as a percentage of all vacancies decreased from 36% to 27% by 2024. The level of skills shortages, however, remained largely unchanged from 2017 (22%), which highlights a persistent challenge for the UK’s economy.
A skills shortage is a job vacancy that’s hard to fill due to a lack in skills, qualifications, or experience. In total, 6% employers faced a skills shortage vacancy. This was down from 10% in 2022 but the same percentage as 2017.
These figures showed that companies have also cut back on their training budgets, with a 18.5% drop since 2011.
Experts said that the larger companies had benefitted more from a reduction in skills shortages than smaller businesses.
The National Centre for Universities and Business found that, while some of the pandemic-era pressures are easing, structural mismatches in skills supply and demand continue to limit business growth, particularly in high value sectors like construction, health and social services, and manufacturing.
Dr Joe Marshall is the chief executive officer of the NCUB. He said that the decline in skills shortage vacancies were encouraging. However, “the fact we are still above 2017 levels, rather than substantially improving, tells us this is not an issue that will be resolved quickly.” The UK’s persistent skills mismatches are continuing to hinder innovation, productivity and economic growth.
He said that while skills shortages had decreased for larger employers (100 or more employees) from 34% to 17%, the most acute shortages still affect the smallest companies (42%), unchanged since 2022. It was evident that smaller companies lacked resources and networks necessary to compete for talent. This created a two-tiered labour market, which could leave our most innovative businesses behind.
Marshall said that to address the issue, education and industry need to work together more closely. “Universities play a crucial role in preparing students with the skills that employers require – but it requires deeper collaboration, more clear routes into priority industries, and long-term investments in talent development.”
The NCUB calls for coordinated action in order to strengthen the UK’s skills pipeline. This includes: expanding work-based learning, employer-led courses design, improved data sharing about regional and sectoral needs for skills; targeted support for the sectors with the most shortages; as well as greater support for SMEs.
According to the DfE survey, 12% of employers have at least one employee who is not fully competent (ie. a skills gaps), which is lower than 2022 (15%) but similar to 2017. In total, 4% of employees had a skill gap. This is down from 5.7% and 4.4% respectively in 2017 and 2022.
Three-fifths of employers (59%) provided training to their employees in the past 12 months. This is down from 66% in 2017 and 60% in 2022. Nearly half (48%) of employers provided on-the job training (similar to the 49% of 2022 but lower than 53% of 2017), and two fifths (40%) of employers provided off-the -job (again, similar to 2022’s result of 39% but lower than 488% of 2017).
In 2024, the total number of employees receiving training will be 63%, which is higher than 2022’s (60%) level but comparable to 2017’s (62%).
Total UK training expenditures in 2024 were PS53bn (in 2024 price terms), down from PS59bn (in 2022 prices). This represents a 18.5% drop since 2011. This is equivalent to spending PS1,700 on each employee. This is down from PS1,960 per employee in 2022, and a decrease of 29.5% since 2011.
These figures are based on interviews conducted with 22,712 employers in the UK.
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