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UK skills shortage eases for first time in a decade: ManpowerGroup

UK skills shortage eases for first time in a decade: ManpowerGroup

Danny Romero
| January 22, 2025

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The proportion of UK organisations struggling to find skilled workers has fallen for the first time in 10 years, according to ManpowerGroup’s 2025 Talent Shortage Survey.

ManpowerGroup’s report found that 76% of employers now report difficulty filling positions, down from 80% last year, suggesting the UK’s persistent skills shortage may have reached its peak.

With concerns from employers over rising inflation and business costs following the increases to National Insurance contributions, however, Michael Stull, UK managing director of ManpowerGroup, is cautious about what the current skills gap means for the future of UK business and productivity.

“The significant drop in the UK Talent Shortage could mean we’re over the peak of the skills gap which has intensified over the past decade since its last drop in 2014,” Stull said in a press release. “Organisations have worked hard during this time to drive positive change amidst major challenges; by upskilling, reskilling, seeking out new talent pools and through smarter use of technology.”

The most popular action being taken by employers to overcome talent shortages is upskilling and reskilling current employees (28%) as they seek to cut back on recruitment costs by driving internal mobility.

Meanwhile, 14% of employers favour increasing temporary recruitment as they show a preference for targeting new talent pools (23%) and increasing wages (21%) despite the prevalent challenges.

“Although any movement towards closing the skills gap is positive, we must bear in mind that many other indicators point to a hiring recession,” Stull said. “There are fewer jobs out there and this is playing a role in slowing the demand for skills. Employers and government must continue to focus on measures to improve UK productivity to pull businesses out of this hiring recession and away from the prospect of an economic recession. Now is the time for a smart response that doesn’t rest on improvements already made.”  

The survey also shows how the needs of UK employers have shifted significantly over the past 10 years, with IT and data skills now seeing the greatest demand (placed 8th in 2014 and first in 2025) and a greater need for customer-facing and office support staff. Engineering skills, however, remain high in demand.

The demand for sales and marketing skills has risen over the year while requirements for admin and office support skills have declined.

 “Increased demand for in-person experiences has driven the growth in customer-facing and front-office roles over recent years,” Stull added. “While the drop in demand for technical, manufacturing and production skills reflects how off-shoring has had an impact following many high-profile factory and plant closures. ESG and sustainability skills weren’t areas we tracked ten years ago and these will definitely move up through the ranks over the next decade.”

“While the UK macro circumstances remain challenging, any closing of the skills gap should be seen as a sign of green shoots for improving productivity,” Stull said. But we can’t rest where we are and must continue to invest in training and development, preparing thoroughly for further changes in workplace legislation, and adapting recruitment practices without compromising on longer-term goals.”