A third of employers (35%) believe a lack of ‘work readiness’ in Gen Z and younger generations will be one of the biggest drivers of skills shortages over the next five years, yet are doing little about it.
The annual Business Barometer report from The Open University has also warned there is a growing disconnect between UK employers and the next generation of the workforce.
Gen Z in the workplace
Gen Z are in ‘work situationships’ with employers
The research, an online survey of more than 2,000 senior decision-makers and a poll of 1,000 members of ‘Gen Z’ (or those aged between 18 and 24), found just over half (54%) of organisations said they were currently experiencing skills shortages. However, only a third (33%) had specific initiatives in place to recruit, retain or train under-25s.
Skills gaps and shortages were also something most of the Gen Z respondents were aware of, yet often they felt they were not receiving the guidance or support they needed to become truly work-ready, the OU argued.
For example, six out of 10 (61%) said they had never been told they lacked specific skills. Moreover, 69% of the Gen Z employees said they would be prepared to stay longer with an employer that offered training and development, and 71% were actively considering a career based on where skills were most needed in the UK.
This gap in expectations was particularly stark in the context of digital, AI and sustainability skills. While nearly half of the Gen Z workers polled (48%) were already working in or interested in AI, a fifth (20%) of employers said they were not confident they would be able to deliver their AI strategies over the next five years because of talent constraints.
ED&I was another area where there was something of a disconnect. The data showed that 84% of employers felt ED&I is important to their organisation and 50% believed it will become even more important over the next five years.
Yet, nearly a quarter (23%) had no initiatives in place for underrepresented or disadvantaged groups, including returners, career changers, and workers with disabilities or neurodiversities.
This, the OU argued, presented a missed opportunity to widen the talent pipeline and reduce economic inactivity – particularly in sectors and areas facing acute workforce shortages.
Baroness Martha Lane Fox, chancellor at The Open University, said: “Employers have an incredible opportunity – and responsibility – to shape the future workforce. The talent is out there. Young people are motivated, they’re digitally savvy, and they want to contribute. But they need clear training pathways, practical support, and employers willing to invest.
“While there are economic challenges at this moment for employers, the smartest organisations won’t just wait for skills to arrive – they’ll build them, inclusively and proactively, to fuel growth and resilience,” she added.
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