More than three quarters of Scottish firms have said they are seeing trading hit or growth stalled amid intensifying skills shortages.
The Open University’s annual Business Barometer report, which was conducted in partnership with the British Chambers of Commerce (BCC) this year, found 84% of Scottish organisations say the impact of skills shortages is causing increased workload on other staff.
And 70% of survey responders in Scotland agreed that their organisation is currently facing skills shortages, up from 62% in the 2021 Business Barometer report.
Aberdeen & Grampian Chamber of Commerce chief executive Russell Borthwick said: “By 2030 a fifth of Scotland’s population will be of retirement age and by 2050 this will be one quarter.
“Our nation’s overall population growth since 1970 is only 5%, well behind peer nations.
“As we attempt to recover from the pandemic and grapple with the impact of geo-political events, these worrying statistics, together with the results of this survey, confirm that labour and skills shortages are worsening, acting as a dangerous drag on economic recovery and growth.
“Workforce and skills planning has never been more important and it’s vital that policy makers, employers, our education system and training providers work meaningfully together to ensure our businesses have access to the people and skills needed to achieve our economic potential.”
No staff leading to no work
Across the UK two thirds (68%) of small to medium-sized enterprises (SMEs) are facing skills shortages, with the figure rising to 86% for large organisations.
The shortage is having a knock-on impact on company performance, with 78% of firms noting they have seen reduced output, profitability, or growth, while 28% of businesses stated that they have had to turn down work as a result of staffing woes.
Staff wellbeing has also taken a significant hit, with 72% of organisations surveyed saying that the workload for staff has increased as a result, compared to the 56% of companies feeling this way in 2021.
Factors including the pandemic, Brexit, the war in Ukraine and rising business costs were all cited as being linked to the ongoing skills shortage.
Need to help grow talent
The Open University in Scotland senior partnerships manager David Allen said: “Our Business Barometer report highlights more Scottish companies are struggling to recruit the right people with the right skills.
“This is up 8% to 70% this year.
“The need for employers to take a long-term strategic approach to addressing the skills gaps is more important than ever.
“These recruitment challenges place a focus on growing talent from within the organisation as well as attracting new staff.
“Critically, staff in Scotland seem to be under more pressure than staff elsewhere in the UK.”
Record level of job vacancies
Last month, the Office for National Statistics (ONS) revealed that overall job vacancies rose to a new record of 1.3 million.
More than a tenth of these vacancies were in the hospitality sector, which has seen rapid growth in job creation after the easing of pandemic restrictions.
The Open University report found that more than half (52%) of larger businesses and 47% of SMEs have said they will increase investment in staff training over the next year.
However, micro organisations, which have less that 10 employees, look set to face the most problems in addressing workforce issues, with only 39% planning to increase investment in staff training in 2023.
The survey was conducted online by the BCC between April 11 and 29, and 1,310 organisations were surveyed.