Scots employers 'missing out on hidden talent pool' amid skills shortage nightmare

More than two thirds of Scottish organisations are experiencing skills shortages, with the issue one of the top challenges facing employers, a key study today reveals.

The annual Business Barometer report published by the Open University and the British Chambers of Commerce provides a temperature check on the UK skills landscape. It highlights that, despite the ongoing skills shortage, almost two in five Scottish organisations don’t have any specific initiatives, skills programmes or workplace adjustments in place for specific talent pools, including underrepresented groups such as people with disabilities or workers from diverse ethnicities.

The report suggests that employers are missing out on the hidden talent pool and an opportunity to “grow your own” talent during a time where two in five firms say they have been prevented from filling roles due to a lack of applicants. The skills shortage continues to have negative knock-on effects for existing staff morale and wellbeing, according to the findings, with three in four organisations north of the Border reporting increased workload on existing staff. Businesses also reported an impact in terms of reduced activity or output and scaled-down growth plans.

David Allen, acting depute director, external engagement & partnerships, at the Open University in Scotland, said: "Skills shortages are biting hard; damaging businesses and holding back economic growth. Never has it been more important for businesses, governments and training providers to work together to find solutions. We have a vast variety of initiatives in place to support people, regardless of age, geography and background, to access higher education and succeed in their studies. For example, 26 per cent of Open University students in Scotland declare a disability and we are able to offer support with finance, screen setup, exam arrangements, virtual internships and more.”

The threat of an ageing Scottish workforce retiring without employers having the skills to replace experienced employees is another concern, with a third reporting an increase in the number of employees over the age of 50 in the last three years. Despite that, almost nine in ten organisations do not have a specific initiative in place for workers over 50, while three-quarters don’t have any written annual plans to prepare for people exiting the business. The report reveals that organisations, especially small and medium-sized enterprises (SMEs), lack the necessary expertise and resources to strategically address the skills gaps and challenges effectively. As a result, many firms are said to be trapped in a “cycle of continual recruitment and retention challenges”.

Baroness Martha Lane Fox, chancellor at the Open University and president of the British Chambers of Commerce, said: “It’s clear from this year’s report that the skills shortage has not improved, despite the existing efforts from organisations across the UK. We haven’t solved it yet. But what is even more concerning is that organisations aren’t investing in specific talent pools, including underrepresented groups. If organisations continue to ignore these workers, they risk missing out on untapped talent and deepening the skills gap even further. There could be a big opportunity for employers here if hidden talent is given a boost.”