How to Tackle the UK Skills Shortage & What It Means for You

UK employers have long felt the pressure of skills shortages, but today, it’s more than a temporary recruitment headache. According to the British Chambers of Commerce, 75% of UK firms trying to recruit in Q3 this year (2025) are struggling to find the right staff. In many cases, it’s not a lack of applicants; it’s a mismatch between roles and skills.

The shortage spans multiple industries and job types, and it’s costing the economy. But businesses aren’t powerless. By understanding what drives the issue and taking proactive steps, such as inclusive hiring and innovative training, employers can help close the gap and strengthen their workforce.

What’s Driving the UK’s Skills Shortage?

An ageing workforce

A third of the UK workforce is now over 50, and this proportion is expected to continue rising. As older workers retire, industries are struggling to replace their experience, particularly in health, engineering, and skilled trades. The Institute for Employment Studies warns of “structural imbalances” that will leave major roles unfilled unless action is taken.

Brexit’s labour impact

The end of free movement resulted in the UK workforce losing an estimated 330,000 EU workers, according to UK in a Changing Europe. Sectors like hospitality, agriculture, care, and logistics, all traditionally reliant on migrant labour, are still feeling the shock.

Gaps in education and training

Many UK employers continue to report that applicants lack the technical, practical, or digital skills needed to perform effectively in key roles. At the same time, investment in staff training has fallen significantly. 

Research from the Institute for Fiscal Studies (2023) shows that employer spending on training per employee has dropped by 27% since 2011. This means fewer opportunities for workers to adapt to new technologies, career progression, or evolving customer needs, leaving both individuals and businesses at a disadvantage.

Technology is shifting faster than people can reskill

Roles in IT, AI, green energy, and cybersecurity are multiplying, but the UK is struggling to keep up. According to SecurityBrief, 71% of organisations have been affected by the cybersecurity skills shortage.

Sectors Hit Hardest

The skills gap isn’t limited to one part of the economy. Data from the Department for Education and industry bodies points to several at-risk sectors:

• Construction: The Construction Industry Training Board (CITB) forecasts that the UK will need an additional 251,500 construction workers by 2028 to meet demand, driven by infrastructure projects, housing targets, and an ageing workforce.

• Health and social care: The NHS is facing a projected shortfall of 260,000 to 360,000 staff by 2036/7. In 2022/23, adult social care reported around 152,000 vacancies.

• Engineering and manufacturing: Make UK reports that “more than half of manufacturers expect between 6% and 20% of their workforce to retire in the next 10 years.”

• Education: The National Foundation for Educational Research warns of ongoing shortages in maths, physics, and computer science teachers.

• Digital & IT: The UK needs 6,800 additional cybersecurity professionals per year to meet demand, according to GOV.UK (2024).

• Logistics and transport: HGV driver shortages have eased but persist, with the Road Haulage Association highlighting a need for 40,000 new HGV drivers each year for the next five years.

  
  

What Can Employers Do?

1. Tap into untapped talent

One of the most effective and underused solutions is inclusive hiring. This includes individuals with convictions, older workers, people with disabilities, and returners.

The Ministry of Justice has reported that P45 employment reduces the likelihood of reoffending by 9.4 percentage points after release compared to the matched comparison group. Employers like Timpson and Greggs have shown that people with convictions, when given a chance, are often among the most loyal and productive employees. Timpson reports that around 10% of its workforce comprises individuals who have been released from prison, with excellent retention rates.

Business in the Community found that 92% of employers say diverse recruitment has enhanced their reputation and helped them win new contracts.

Curious about the support available for inclusive hiring? Read our guide to UK incentives for inclusive recruitment, including grants, training schemes, and policy support.

2. Invest in training and development

Despite the clear need for skills, UK employer investment in training has declined by 28% since 2005. But there is now a range of accessible initiatives helping employers and individuals build job-ready skills.

Employers can now access Skills Bootcamps (funded short courses with guaranteed interviews), apprenticeships, and, from 2026, the Lifelong Learning Entitlement, which allows adults to retrain flexibly over their careers.

Importantly, training and development opportunities also exist within the prison system, designed to reflect real workplace standards. Many prisons now offer industry-recognised qualifications in areas such as construction, catering, warehousing, and digital literacy, aligned with employer needs and sector shortages. 

Employers who engage with these programmes can access motivated individuals with relevant skills, often ready to work upon release. For example, HMP Ranby runs a dedicated Construction Academy in partnership with PeoplePlus, providing training and qualifications that prepare residents for real-world roles in construction, such as dry lining and health and safety.

3. Collaborate with educators

Thousands of businesses are already partnering with schools, colleges, and training providers to help shape the next generation of talent.

T-Level industry placements, Local Skills Improvement Plans, and employer-designed curricula are all helping to align the skills learners study with the needs of employers.

4. Make use of government initiatives

There’s growing support for employers tackling workforce challenges:

• Returnership: Help older workers rejoin the workforce.

• Apprenticeship Levy flexibility: Reforms underway may allow businesses to transfer funds more easily or use them for modular training.

• Sector-based Work Academy Programmes (SWAPs): Support people facing barriers into high-demand sectors like care and logistics.

  
  

Even small and medium-sized businesses can benefit from many schemes, including funding, guidance, and recruitment support.

5. Build a learning-first culture

It’s not just about offering courses; it’s about creating workplaces where development is expected, supported, and rewarded.

The World Economic Forum’s Future of Jobs Report notes that businesses that prioritise learning are more resilient and better able to adapt during disruption. Embedding regular feedback, mentoring, and self-directed learning tools can help even small teams retain knowledge and stay agile.

This approach can be especially valuable when supporting individuals re-entering the workforce, such as prison leavers. Many bring newly acquired skills and a strong desire to prove themselves, but will benefit greatly from ongoing mentoring, feedback, and learning pathways that ease their transition and build confidence. A learning-first culture ensures that these individuals, and all employees, have the opportunity to grow with the business.

What Happens If We Don’t Act?

The Learning and Work Institute warns that without significant intervention, the UK could face 2.5 million high-skill shortage vacancies by 2030. That means longer delays, higher costs, and more pressure on frontline staff.

But the flipside is equally true: businesses that invest in people and widen the net when recruiting are better placed to grow, retain staff, and fulfil their long-term goals.

This includes recognising the barriers faced by those leaving prison, who continue to experience disproportionately low employment rates due to stigma and lack of opportunity. By removing these barriers and creating fairer hiring pathways, employers can unlock untapped potential while contributing to safer, more inclusive communities.

Interested to learn more? Read our blog on how to successfully integrate people with convictions into your workforce.

Final Thoughts

The UK’s skills shortage isn’t going away overnight. But employers don’t have to wait for the government or education system to catch up.

By exploring new sources of talent, building partnerships, and fostering a culture of growth, businesses can take control of their own pipeline and help create a stronger, fairer workforce for everyone.