Skills shortages lead to fall in wellbeing,  increased workload and decreased profitability 

According to The Open University’s Business Barometer 2022 report, published in partnership with the British Chambers of Commerce, UK organisations are experiencing the knock-on effect of ongoing skills shortages, as more than three quarters (78 percent) report seeing reduced output, profitability or growth. The Open University’s annual report which sets out to provide an overview of UK skills , also highlighted the effect the skills shortage seems to be having on morale and wellbeing, as almost three-quarters (72 percent) of organisations say the impact increases workload on other staff.

This statistic has leapt year on year, with only 56 percent of respondents from 2021’s report claimed their staff were experiencing additional pressure leading to poor wellbeing. To address the problem, more than half (52 percent) of large organisations will increase investment in staff training over the next year, compared to 47 percent of SMEs. The knock-on effect of these shortages is also impacting company growth as 28 percent of businesses say they have had to turn down work or are not able to bid for work due to their staff shortage.

The report also claims that more than two-thirds (68 percent) of SMEs are currently facing skills shortages. This rises to 86 percent of large organisations, in stark comparison to last year’s report where almost a quarter (24 per cent) believed that finding staff with the right skillset was the single biggest challenge facing businesses. Organisations 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 – all feeding into the skills shortage.

But while 9 in 10 of large organisations are looking at a long-term strategic approach to skills gaps and have a written plan to address this, only 43 percent of micro organisations (with fewer than 10 employees) said they have some form of plan to address workforce issues. Similarly, more than half (53 percent) of large organisations will increase investment in staff training over the next year, compared to 39 percent of micros, showing that large organisations are currently better equipped to tackle recruitment challenges, despite reporting larger skills gaps.

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