The Open University has revealed a widening chasm between what UK employers need and what the next generation of workers feel prepared to offer, potentially hampering efforts to tackle the country’s persistent skills shortages.
Despite increasing investment in training, 54 percent of UK organisations report critical skills shortages. Yet only a third have targeted initiatives to recruit, retain or train under-25s, this is despite clear appetite from young people to upskill and contribute. The Open University’s latest Business Barometer surveyed over 2,000 organisation leaders alongside 1,000 Gen Z adults to paint a detailed picture of this disconnect.
Young job-seekers appear acutely aware of national skills gaps and are factoring that into career decisions:
- 71% of Gen Z say they’re considering career paths based on where skills are most in demand.
- 69% would stay longer with an employer that offers clear training and development.
- Yet 61% report they’ve never been told they lack specific skills—contrasting with 35 percent of employers who cite “work readiness” as a top hiring barrier.
“The findings of this study will prove exceptionally useful for policy makers and business leaders as they develop future talent strategies,” says Russell Dalgleish, Entrepreneur in Residence at The Open University.
As digital, AI and sustainability capabilities become business-critical, the skills mismatch only deepens. Nearly half of Gen Z (48 percent) are already in roles involving AI or actively interested in it, but 20 percent of employers lack confidence in delivering their AI strategies over the next five years due to talent constraints. Meanwhile, only half of organisations surveyed have formal skills plan in place.
“Employers have an incredible opportunity—and responsibility—to shape the future workforce,” says Baroness Martha Lane Fox CBE, Chancellor of The Open University. “Young people are motivated, digitally savvy, and want to contribute. But they need clear training pathways, practical support, and employers willing to invest.”
Nearly a quarter (23%) have no programmes for returners, career changers, or people with disabilities or neurodiversities. According to the report, this oversight risks leaving potential talent untapped and exacerbating workforce shortages, especially in hard-hit regions and sectors.
Phil Kenmore, Director of Corporate Development and Partnerships at The Open University, adds:
“The data is clear: there’s a mismatch between employer intentions and practical action. But there’s real opportunity here. Organisations that build structured skills plans, partner with education providers, invest in flexible training, and broaden their talent pools will thrive in the years ahead.”
This challenge creates a huge cost to the business community with many already feeling the pinch of skills shortages, which creates deeper problems, ie.
- 40% report heavier workloads for existing staff.
- 33% face reduced productivity.
- 30% have scaled back growth or expansion plans.
- 61% say higher National Insurance makes recruitment or training harder, and 54 percent report the same for a higher National Living Wage.
- 26% of organisations worry that trained employees might leave, deterring them from investing in upskilling.
With 32% of leaders expecting the skills gap to worsen over the next five years, the report warns that time is running out, action is required.
View the full Business Barometer report at business.open.ac.uk/business-barometer.
The views expressed in this article are the author’s own and do not necessarily reflect Saltire Sentinel’s editorial stance.