More than three-quarters of Scottish businesses (77%) report that skills shortages mean reduced output, profitability or growth, according to The Open University’s Business Barometer 2022 published in partnership with the British Chambers of Commerce.

The Open University’s annual report provides a temperature check on the skills landscape. Over two-thirds (70%) of Scottish organisations are experiencing the knock-on effect of ongoing skills shortages and recruitment challenges.

It also highlights the effect the skills shortage is having on staff morale and wellbeing, with 84% of Scottish organisations saying the impact increases the workload on other staff.

To address the problem, around two-thirds (62%) of surveyed organisations in Scotland have implemented some form of written plan around recruitment and training. As a result, more than half (53%) of organisations surveyed expect to increase their investment in staff training over the next year, showing that Scottish organisations are currently motivated to tackle recruitment challenges.

Organisations also reported they were feeling the full impact of complex socio-economic issues such as Covid-19, Brexit, the war in Ukraine and rising business costs, which were all feeding into the skills shortage.

Partnering with the British Chambers of Commerce for the first time, The Open University’s 2022 Business Barometer report, was conducted by the British Chambers of Commerce, surveying 1,300 employers. The report is an annual temperature check on the UK’s business landscape across a multitude of different UK nations, regions and sectors.

David Allen, Senior Partnerships Manager, The Open University in Scotland commented:

“Our Business Barometer report highlights more Scottish companies are struggling to recruit the right people with the right skills. This is up 8% to 70% this year.

The need for employers to take a long-term strategic approach to address the skills gaps is more important than ever. These recruitment challenges place a focus on growing talent from within the organisation as well as attracting new staff.

“Critically, staff in Scotland seem to be under more pressure than staff elsewhere in the UK. More employers say this year that the skills shortage is increasing their teams’ workload and wellbeing. Through The Open University’s work with employees and organisations across Scotland, we’re seeing how targeted skills training can make a huge difference in providing new opportunities for individuals and supporting growth for businesses.”

Russell Borthwick Chief Executive, Aberdeen & Grampian Chamber of Commerce commented: 

“By 2030 a fifth of Scotland’s population will be of retirement age and by 2050 this will be one quarter. Our nation’s overall population growth since 1970 is only 5%, well behind peer nations. As we attempt to recover from the pandemic and grapple with the impact of geopolitical events, these worrying statistics, together with the results of this survey, confirm that labour and skills shortages are worsening, acting as a dangerous drag on economic recovery and growth.

“Workforce and skills planning has never been more important and it’s vital that policymakers, employers, our education system and training providers work meaningfully together to ensure our businesses have access to the people and skills needed to achieve our economic potential.” 

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