The ‘Business Barometer: Skills for today and tomorrow: how employers can plan for future skills’, based on a survey of over 2,000 UK organisation leaders and 1,000 Gen Z adults, finds that just over half (54%) of organisations are currently experiencing a skills shortage and only a third (33%) have specific initiatives in place to recruit, retain, or train under-25s.  

At the same time, the majority of Gen Z respondents are aware of the UK’s skills challenges and are factoring that into their career thinking – but they may not be receiving the guidance or support they need to become truly work-ready:  

• 71% are considering careers based on where skills are most needed in the UK
• 69% would stay longer with an employer that offers training and development
• 61% have never been told they lack specific skills – despite 35% of employers perceiving a lack of ‘work readiness’ as one of the top barriers to filling roles  

This gap in expectations is particularly stark at a time when digital, AI and sustainability skills are increasingly essential. While nearly half of Gen Z (48%) are already working in or interested in AI, 20% of employers say they’re not confident they can deliver their AI strategies due to talent constraints in the next five years.  

Baroness Martha Lane Fox CBE, Chancellor at The Open University commented: “Employers have an incredible opportunity – and responsibility – to shape the future workforce. The talent is out there. Young people are motivated, they’re digitally savvy, and they want to contribute. But they need clear training pathways, practical support, and employers willing to invest.  

“While there are economic challenges at this moment for employers, the smartest organisations won’t just wait for skills to arrive – they’ll build them, inclusively and proactively, to fuel growth and resilience.”  

While global headlines have amplified political division over ED&I policies, the report reveals continued support for inclusion in the UK. The data shows that 84% of employers say ED&I is important to their organisation while 50% believe it will become even more important over the next five years.  

However, 23% have no initiatives in place for underrepresented or disadvantaged groups, including returners, career changers, and workers with disabilities or neurodiversities. This presents a missed opportunity to widen the talent pipeline and reduce economic inactivity – particularly in sectors and areas facing acute workforce shortages.  

Phil Kenmore, Director of Corporate Development and Partnerships at The Open University, added: “The data is clear: there’s a mismatch between employer intentions and practical action. But there’s also a real opportunity here. Employers can start by building structured skills plans, work with education providers invest in flexible training, and opening up opportunities to more diverse talent. The organisations who act now – who build learning into their plans at every level – will be the ones who will thrive in the years ahead.”  

The Business Barometer has tracked the skills shortage for nearly a decade and while the proportion of employers facing a skills shortage has stabilised since last year, the issue remains widespread across sectors and regions. The skills gap remains one of the most pressing issues for organisations, with nearly a third (32%) expecting it to worsen over the next five years. Among those currently affected, organisations report:  

• 40% reveal increased workload on other staff
• 61% report that the increase in national insurance has made recruitment or training more difficult while 54% say the same of a higher National Living Wage
• 33% cite reduced productivity
• 30% say they’ve scaled back growth or expansion plans
• 20% of all employers lack confidence in delivering their AI plans over the next five years  

Despite this, fewer than half of employers (46%) have a formal skills plan in place and even though the data shows training boosts retention, 26% of organisations say that one barrier to training staff is a fear they’ll leave.  

To find out more how employers can address the organisation skills shortage visit https://business.open.ac.uk/business-barometer