Staff shortages are affecting businesses’ growth, with nearly three in 10 saying they have had to turn down work or are unable to bid for contracts because of resourcing issues.
More than three-quarters (78%) of business leaders polled for The Open University’s business barometer research reported a reduction in output, profitability and growth as a result of staff shortages and recruitment challenges.
Shortages are more stark among large organisations (86%) than SMEs (86%), with organisations reporting that socio-economic issues including in ongoing impact of Covid-19, Brexit, the invasion of Ukraine and rising business costs have all contributed to recruitment challenges.
Resourcing issues were having an effect on staff morale and wellbeing, according to the survey of more than 1,300 employers. Seventy-two per cent said the shortages had resulted in increased workloads for employees, compared with 56% who said the same last year.
While nine in 10 large firms had a long-term, written, plan to fill skills gaps, only 43% of employers with fewer than 10 staff had a plan to address workforce issues.
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Fifty-two per cent of large organisations,47% of SMEs, and 39% of micro organisations said they would increase investment in staff training over the next year to help meet skills needs.
Viren Patel, director of the business development unit at The Open University said: “Our Business Barometer report highlights the need for employers to take a long-term strategic approach to addressing the skills gaps and that it’s more important than ever to take a proactive view on employees’ skills.
“The report also shows that recruitment is tougher than ever and that places a focus on growing talent from within and opening up opportunities for hidden talent both inside and outside the organisation. Critically, staff seem to be under more pressure than ever.
“Through the Open University’s work with employers, we’ve seen how education can make a huge difference to workforce impact and diversity. Education is a huge enabler and has a vital role to easing and solving the skills shortage. If we can harness the ambitions of our people who deliver products and services, then it’s a win-win for all.”
Jane Gratton, head of people policy at the British Chamber of Commerce, said: “We need an agile skills system that can respond quickly to the evolving needs of businesses, supporting the transition to a more digital, automated, and net zero workplace and giving firms the confidence to boost investment in training and development.
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“Planning for skills has never been more important and it’s time for employers, training providers and policy makers to work together to ensure the skills system delivers for individuals, businesses, and the economy.”
