Skills Gap Remains Persistently High, With More than Half of London Firms Suffering from Shortages

Over half of businesses in London and the South East are facing skills shortages in key positions, negatively impacting productivity and staff morale, a new survey by the British Chambers of Commerce (BCC) and the Open University reveals.

The report reveals 63 per cent of businesses in London and the South East are suffering from a lack of qualified workers.

65 per cent of firms reported increased workloads on existing staff, while 47 per cent experienced reduced output.

Despite the severe skills shortage, few firms have taken action, In London and the South East, 71 per cent lack a written plan for 2024, mirroring a national issue where 62 per cent of business struggle.

Engineering faces the most significant shortages, followed by sales and marketing. This hinders companies efforts to adopt AI and green technologies, crucial for future success.

Martha Lane Fox, Chancellor at The Open University and President of BCC says ‘the skills gap remains stubbornly high”.

“What’s concerning is the critically low confidence in AI and green technology and the lack of strategic plans or initiatives to engage vital underrepresented groups- both of which are essential to addressing the pivotal challenges of our future.”

Sachin Agrawal, Managing Director, Zoho UK commented: “With the UK’s ambition to establish itself as a global technology superpower, building digital skills to lead innovation in the workforce is essential. Organisations need access to skilled staff to maximise the benefits of tech to drive digital transformation and develop a competitive edge. This is especially the case with the rapid development and adoption of technologies such as AI which businesses are using to drive decision-making.”

“The impending skills shortage calls for collaboration between government, educators and industry to provide the necessary training and investment to create a UK-wide, digitally proficient workforce. Businesses should consider re-examining their skills development strategies and ensure they have the right culture to promote an environment of continuous learning for their staff to keep up with technological advancements and demands. Businesses that are open to change and that ensure staff are flexible and adaptable enough to cope with external forces are those more likely to drive success.”

The skills gap will likely constrain how far and how fast the next government can move on a number of issues, from housebuilding to AI.

Stuart Muton, Chief for Group Delivery at AND Digital said: “There’s been a strong focus on innovation among businesses over the past year, especially with the adoption of AI technologies, but BCC’s research suggests that has come at the expense of people. Digital skills are crucial to empowering staff and maximising the benefits of technologies, yet the skills gap remains rife.”

“Businesses need to take an innovation AND people approach to technology development and adoption, investing not only in the technology itself, but the people that are using it. Building capability through digital skills enables businesses to not only innovate but optimise all of their resources and knowledge to drive digital transformation.”

Providing constant upskilling and reskilling programmes should be an ongoing focus for businesses, equipping them with the skills they need to use technology efficiently and make it work for them. In turn, businesses can build a workforce full of digital nomads that can lead innovation and place tech at the heart of growth.”