Business Barometer 2023: Forewords

The economic shocks that have buffeted UK business over the past couple of years have led to tougher trading conditions and intense competition for skills.  Faced with these challenges, businesses have demonstrated outstanding resilience but their recovery, productivity and growth are being held back by a critical shortage of workforce skills.

Businesses know they have a key role to play in resolving skills shortages and I have been heartened by the tens of thousands of employers who are coming forward to identify the problems and solutions for their local economies.   Chamber-led Local Skills Improvement Plans in England are bringing together business communities and training providers to ensure people can train for the jobs we have now and the new opportunities employers are creating as the workplace evolves. 

Once again, the Barometer shows why it is critical for business, governments and the skills sector to work together to resolve skills shortages.  A lack of talent is already impacting severely on profitability and staff morale – with many firms turning away new business opportunities.  A failure to act now could jeopardise jobs, livelihoods and the UK’s competitiveness.

Governments must create the conditions for business to invest in training and development, with incentives through the tax system and by putting employers at the heart of the skills system.

We need a laser-like focus on preparing and supporting young people and the unemployed to succeed in the workplace. 

It’s time for a long-term, stable and coherent strategy for skills – without constant tinkering and change – to give everyone the confidence to engage and play their part. 

There must be parity of funding and prestige for technical, vocational and academic routes to employment, ensuring that providers are properly resourced to meet the needs of businesses and learners.

It’s vital to create an agile and flexible skills system that can respond quickly to the needs of an evolving workplace, where increased digitalisation, automation, AI and Net Zero priorities are creating the need for different knowledge and skills, and new ways of working.

And, when urgent job vacancies cannot be filled from the local and national labour market, the immigration system must support employers who have no choice but recruit from outside the UK.

The Barometer highlights the urgency of action and, with the backing of governments, I am confident that employers will rise to the challenge.

Shevaun Haviland
Director General, British Chambers of Commerce

Each year, the Business Barometer report has shown that we have a long-term, structural skills shortage across the UK. The skills gap spans across multiple sectors and threatens business performance and the delivery of quality public services and is something that governments, employers and educational providers need to address together.

This year’s report marks the second year in which we have partnered with the British Chambers of Commerce (BCC). Following the publication of the 2022 report, we ran a series of roundtables in Milton Keynes, Leeds, Belfast, Dundee and Cardiff to discuss issues identified within the report. Local employers and education providers highlighted some of the deep-rooted causes of the skills shortage, and why it has been so difficult to address historically.

These fascinating discussions have informed this year’s report and survey. Utilising the experience and expertise of the BCC’s research team, this report outlines the size, nature, causes and impacts of the skills shortage. We highlight some of the strategic challenges skills gaps pose for organisations – from a lack of productivity, to the detrimental effect on staff wellbeing.

Of course, learning and development is a vital part of solving the skills shortage. However, we have to ensure that opportunities are available on an equitable basis to deliver real change. The survey shows that relatively few plans and initiatives are in place within organisations to access hidden talent within the workforce – and that’s something we need to address as a society.

The Open University delivers workplace education to more than 2,800 organisations. Many of our learners are from diverse backgrounds due to our inherent flexible delivery model and track record of delivering courses to busy people with busy lives. Whether it’s developing new nurses for the NHS, or giving the business leaders the skills they need to deliver success, it’s a responsibility we take very seriously.

But this report shows there is much more to do. I hope this report helps you with your thinking around skills and training as we work together to address this crucial challenge.

Viren Patel
Director of Employers & Partnerships, The Open University