Well over half of businesses in London and the South East are experiencing skills shortages in key positions, which are having knock-on effects on productivity and staff morale.
A new survey from the British Chambers of Commerce (BCC) and the Open University revealed that 63 per cent of businesses in London and the South East are suffering from a dearth of qualified workers.
This had a major impact on firms, with 65 per cent reporting that this increased the workload on other staff. Just under half (47 per cent) said it reduced output.
Despite the scale of the problem, few firms had actively taken plans to address the issue. 71 per cent of firms in London and the South East had not implemented a written skills plan for 2024 to address skills shortages.
The figures for London echo a nationwide problem: 62 per cent of firms nationwide struggle with the same issue.
Engineering was the most commonly cited occupation where firms are struggling to find the right workers followed by sales and marketing.
This posed major problems for firms looking to take steps to apply new technologies connected to artificial intelligence (AI) or the green transition, both of which will be very important for firms going forward.
“The skills gap remains stubbornly high,” Martha Lane Fox, Chancellor at The Open University and President of the BCC said.
“What’s concerning is the critically low confidence in AI and green technology and the lack of strategic plans or initiatives to engage vital underrepresented groups – both of which are essential to addressing the pivotal challenges of our future,” she said.
The skills gap will likely constrain how far and how fast the next government can move on a number of issues, from housebuilding to AI.
Addressing the skills shortage is a key part of Labour’s pitch to generate economic growth . Bridget Phillipson, shadow education secretary, said businesses were “crying out for help to tackle skills shortages”.
The party has pledged to establish Skills England, bringing together businesses, unions and local governments. The body will “ensure we have the highly trained workforce needed to deliver Labour’s Industrial Strategy”.