Skills shortages ease but training investment at lowest level in a decade

Employer skills shortages have fallen across the UK, according to new figures from the Employer Skills Survey 2024, despite a continued drop in workforce training and the lowest investment in staff development recorded in the series. 

The Department for Education-commissioned study gathered responses from more than 22,000 employers across all nations.

The proportion of employers reporting vacancies fell to 17%, down from 23% in 2022. Skill-shortage vacancies accounted for 27% of all vacancies, compared with 36% in the previous survey. In total, 250,500 skill-shortage vacancies were recorded in 2024, less than half the number seen two years earlier.

Employers in Scotland were the most likely to report vacancies, while Construction, Education and Manufacturing registered the highest density of skill-shortage vacancies. Across sectors, shortages most commonly reflected a lack of specialist knowledge, problem-solving ability or technical competence.

The report found that 12% of employers had at least one employee not fully proficient in their job, down from 15% in 2022 and the lowest figure recorded in the series. Skills gaps affected 4% of the workforce, equating to around 1.26 million employees. Hotels and Restaurants continued to experience the highest rate of internal skills gaps.

While gaps have eased, employers cited significant ongoing challenges, including increased workloads for other staff and difficulty meeting customer-service expectations. Small employers were more likely than larger organisations to report losses to competitors and delays to new products or services.

Engagement with training also remained below historic levels. Some 59% of employers provided training over the past year, compared with 66% in 2015 and 2017. Total training expenditure fell to £53bn in 2024, a 10% real-terms decrease on 2022 and the lowest investment level since the survey began. Spend per trainee fell to £2,710.

Apprenticeship provision remained stable, with one in five employers offering programmes, although future demand has weakened. Meanwhile 31% planned to offer apprenticeships, down from 38% in 2022. Larger employers were far more likely than small firms to take on apprentices.

The survey captured employer views on emerging skills needs. Three in five anticipated a need to upskill staff in the next year, driven largely by new technologies and regulatory change, with 14% reported using artificial intelligence systems at their sites, with most planning further integration over the next three years. Adoption was highest in the Information and Communications sector.

Overall, the findings indicate easing pressure in the labour market but a declining investment in skills development. The report highlights ongoing shortages in analytical, digital and operational skills, as well as the need for sustained employer engagement to support training, apprenticeships and long-term workforce planning.