Eight in ten (80%) businesses in the UK are struggling to fill roles because of a lack of skilled talent, according to ManpowerGroup UK’s annual Talent Shortage survey.

The reported shortages mark a 17-year high while the number of businesses reporting skills shortages has grown six-fold over the last decade (from 13% in 2013) and has more than doubled since the 2019 (35%) survey pre-Brexit & the pandemic. 

ManpowerGroup’s Talent Shortage survey is based on responses from 2,020 UK employers and asks how much difficulty they are having finding skilled workers, which skills are they having the most difficulty finding, and how they plan to overcome the shortages.   

The report follows ManpowerGroup’s recent Employment Outlook Survey which showed that UK employers anticipate positive hiring expectations for the second quarter of 2023.

Michael Stull, Director at ManpowerGroup UK, said, “Talent shortages are always an area of concern for employers, but the real step change in our data can be seen post 2019. The pandemic exacerbated the shifts we had predicted to shape the future of the workplace, changing age demographics and evolving technology, which have heated up the battle for talent. Many employers remember how long it took to bring workers back post-pandemic and they’re acutely aware of the growing scarcity of key skills, so they’re holding onto and trying to stockpile business critical talent.”

Meanwhile, ManpowerGroup’s survey found that the Energy & Utilities industries report the most difficulty filling roles (88%) because of a lack of talent, the highest of any sector, as demand for green skills continue to go unmatched. Similar proportions of businesses are reporting shortages in Healthcare & Life Sciences (83%), Transport & Logistics (81%), Financials & Real Estate (80%) and Information Technology (80%).  Although still high in comparison with previous years, 65% of businesses in the communications services sectors have reported shortages.

Regardless of the sector there has been an acceleration in the adoption of technology, from more self-service check outs in supermarkets to cyber security at the highest levels; as a result, organisations are having the most difficulty finding IT & Data skills, almost a third of employers (28%) and a fifth (20%) can’t find engineering skills in the market.

ManpowerGroup also noted that certain soft skills are more difficult to source than hard, with ‘critical thinking and analysis’ (28%), ‘leadership and social influence’ (26%), and ‘initiative taking’ (25%) topping the hardest ‘skills to source’ leader board.

To overcome skills shortages, nearly three quarters of organisations (72%) say they plan to build these skills internally by investing in training for current employees. Over half (51%) plan to invest in permanently hiring new talent, 38% will be investing in more technology, and 31% are looking to contracting and temporary staffing as a solution. 

The research also showed that more than half, or 61%, of employers say they are offering more flexibility in location (hybrid, remote) and time (flexible hours, part-time options) to help attract the right talent. Over a third, or 37%, are looking at new talent pools for the first time such as mature workers, while 30% are increasing wages and 22% are offering joining bonuses. 

Stull says that being prepared to review employee packages and offer a range of incentives is one way in which employers can strengthen their overall offer and attract new talent, but financial incentives have to be a strong part of the mix in light of current economic conditions. More than half of employers in the survey (57%) plan to increase compensation based on skills or performance.

Stull said, “Organisations need to flip their HR and people practices and put more emphasis on retaining and upskilling rather than just hiring to plug gaps. The focus needs to be on investing in long-term skills, creating jobs that people want, providing upward mobility and enabling a better work/life balance. We’re pleased with the government’s recent pledge to support and guide workers who are keen to re-join or remain in employment. Now it’s time for employers to go one step further, preparing the workplace and ensuring training opportunities to meet those returning needs.”