As well as putting pressure on their remaining staff, the skills shortage is also causing a loss of productivity with 78 per cent of businesses seeing reduced output, profitability, or growth.
The annual OU report was this year done in collaboration with the British Chambers of Commerce, and is based on a survey of more than 1,300 organisations of all sizes across the four nations from the public, private and third sectors.
The results of the survey this year found that 68 per cent of SMEs are currently facing skills shortages, rising to 86 per cent in large organisations and that 28 per cent of businesses said they have had to turn down work or are not able to bid for work due to their staff shortage.
To address the problem, more than half (52 per cent) of large organisations will increase investment in staff training over the next year, compared to 47 per cent of SMEs that are struggling to implement plans to address the skills shortage.
The OU report provides an analysis of skills shortages, the associated impacts, recruitment challenges and the effect of flexible working on skills availability – whilst also looking at how employers are responding through business planning and employee training.
The data revealed some sectoral and business size differences indicating that manufacturing firms were most likely to report skills shortages (80 per cent), while B2B service firms were the least likely at 64 per cent. Medium-sized SMEs with 50–249 employees were also more likely to report skills shortages (88 per cent) than other business size categories.
Overall, around three-quarters of businesses (72 per cent) said shortages were causing an increased workload on other staff, while 78 per cent reported that it was causing either a reduction in activity, service delivery, profitability, or long-term growth plans.
“Long-standing skills shortages have been exacerbated by the pandemic and the impact of Brexit on the movement of people,” said Shevaun Haviland, BCC director general.
“Businesses are now crying out for more people, at all skill levels, to join their workforce. Job-specific skills – especially higher levels of technical skills – are in great demand.
“With more than seven-in-ten firms of all sizes telling us they are experiencing skills shortages, there can be no doubt that this problem is worsening. The impact is being felt in reduced business activity or output – as well as on the morale and wellbeing of team members.”
Ms Haviland said previous research by BCC has found disproportionate impacts on smaller organisations and consumer-facing firms flowing from COVID-19.
These themes have surfaced again in this most recent survey, illustrating clearly that smaller organisations are far less likely than their larger counterparts to be implementing workplace plans, or that consumer-facing sector organisations view flexible working very differently to professional service sector organisations.
