UK skills shortage: what should HR do?

UK skills shortage: what should HR do? In summary…

Yes. Hiring shortages have eased since 2022, but 27% of UK vacancies were still hard to fill because of skills shortages in 2024. To respond, HR should map the skills the business needs, develop existing staff, close AI skills gaps, improve retention and widen the pool it recruits from, rather than relying on hiring alone.

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TL;DR

• The UK’s post-pandemic hiring crunch has eased. Even so, more than a quarter of vacancies are still hard to fill because applicants lack the right skills.
• Many skills gaps now sit inside the workforce, particularly around AI, while training spend per employee is at its lowest since 2011.
• HR can respond by mapping the skills the business needs, growing talent internally, holding on to the people it has and widening the pool it recruits from.

Get a group of HR people together in a room, and it won’t be long before the subject of skills comes up.

The conversation has shifted since the scramble for talent in 2021 and 2022, when vacancies peaked. Hiring has cooled, and finding people is less frantic than it was. But ask most HR teams whether their business has all the skills it needs, and the answer is still no. Today, the challenge is as much about developing and keeping skills as it is about finding them.

Is there still a skills shortage in the UK?

Yes, although it looks different from a few years ago. The Department for Education’s Employer Skills Survey 2024 found that 27% of all vacancies were skill-shortage vacancies. These are roles that are hard to fill because applicants lack the right skills or experience. That’s down from 36% in 2022, when the jobs market was at its tightest, but still higher than the 22% recorded in 2017. The overall number of vacancies has fallen sharply, so fewer employers feel the pinch. Those that do are often struggling to fill the roles that matter most.

Some areas are much harder hit than others. Skilled trades were the toughest roles to recruit for, with 48% of vacancies classed as skill-shortage vacancies. In the construction sector, the figure was 45%.

Where are today’s skills gaps?

Increasingly, they’re inside the organisation rather than in the recruitment pipeline. The same survey found that 38% of sites with 100 or more employees had at least one member of staff who wasn’t fully proficient in their role. AI is one of the clearest examples. The CIPD’s Good Work Index 2026 found that only 13% of UK employees have had any training in using AI in their current job.

At the same time, employers are investing less in their people. Training spend fell to £1,700 per employee in 2024, a 29.5% drop in real terms since 2011 and the lowest figure in the survey’s history. Put those trends together, and it’s easy to see why skills gaps persist even when hiring is quieter.

What should HR do about the skills shortage?

There’s no single fix, but HR teams that tackle skills from several angles tend to cope best. Here’s where to start.

1. Map the skills you have and the skills you need

Start by working out which skills the business needs, now and over the next couple of years. Then audit the skills you already have, so you can see where the gaps are and how big they are. A simple skills audit can also uncover hidden talents. You may find that the answer to a hard-to-fill role is already in the business, with someone ready to step up. Career and succession planning tools make this easier by showing where skills sit and who’s ready for their next move.

2. Grow your own talent

Developing the people you already have is often quicker and cheaper than recruiting. It builds commitment too. Training doesn’t have to be expensive, or mean losing key staff to days of courses. If you need to bring through new managers, mentoring or job shadowing can work well. For newer technologies, short lunchtime sessions where colleagues share what they know are a low-cost option. Our blogs on what employees want from a learning programme and becoming a learning organisation have more ideas.

Make sure people can see where their development could lead. Internal hiring and clear career paths give employees a reason to build their skills with you, rather than taking them elsewhere. Our blog on building career and succession pipelines walks through the steps.

3. Close the AI skills gap

AI is changing what many roles involve, but most employees haven’t been shown how to use it well. That’s a gap HR can help close fairly quickly. Start by finding out who is already using AI tools and what for. Then offer practical training built around real tasks. Clear guidance on what’s acceptable matters as much as the skills themselves. Our blog on AI and automation is a useful primer for HR teams thinking this through.

4. Hold on to the skills you already have

Every person who leaves takes their skills with them. That makes retention a big part of any skills strategy. The CIPD found the most common reasons UK employees changed jobs were better pay and benefits (29%), better work–life balance (23%) and unhappiness with senior leadership (19%). Regular pulse surveys help you spot problems in these areas before they turn into resignations. An annual engagement survey alone can’t keep up, as how your people felt a year ago may not be how they feel today.

Line managers matter here too. Ask them who they value most, who they think is at risk and why, so you can act early. Regular performance conversations give managers the chance to talk about where people see their careers heading. Exit interviews then show whether there are recurring reasons people move on. For more ideas, see what every talent retention strategy needs.

5. Widen your talent pool

If you keep fishing in the same pond, you’ll keep finding the same shortage. Look beyond your usual sources, to returners, career changers, older workers and people who need more flexibility to work for you. Welcoming back parents after a career break is one way to bring skilled people back into the workforce. It’s also worth checking whether unconscious bias in recruitment is narrowing your options. Structured interviews and diverse interview panels both help.

6. Make your recruitment work harder

Recruiting is slow and expensive, especially for hard-to-fill roles, so make every channel count. Your careers page and social media are often the first places candidates check you out, so keep them current. Our guide to using social media to attract talent has practical tips. Recruitment software helps too. Cezanne Recruitment Software, for example, lets you post to multiple job boards, build a talent pool of past applicants and run employee referrals from one place.

Don’t overlook the candidate experience either. Slow responses and long silences lose good people to faster-moving employers, as our blog on why candidate experience matters explains.

7. Invest in early careers

Recruitment is often a knee-jerk reaction to an urgent need, such as a key person leaving. But it’s never too early to start building relationships with the people who could fill future roles. Be open to work experience requests from local schools, take part in careers fairs and build links with colleges and universities. Apprenticeships can be a strong route to growing the skills you’ll need. Who knows? The young person you give a first step to today could be one of your star performers in a few years.

Want to see how connected HR, learning and recruitment tools can help you build the skills your business needs? Book a demo and we’ll walk you through it.

Frequently asked questions

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Is there still a skills shortage in the UK?

Yes, although it has eased since 2022. The Department for Education’s Employer Skills Survey 2024 found that 27% of UK vacancies were hard to fill because applicants lacked the right skills, qualifications or experience. That’s down from 36% in 2022 but higher than the 22% recorded in 2017.

What’s the difference between a skills shortage and a skills gap?

A skills shortage is when employers can’t find applicants with the skills they need to fill vacancies. A skills gap is when existing employees aren’t fully proficient in their current role. Many organisations face both, but gaps within the workforce are often easier for HR to tackle directly.

Which roles have the biggest skills shortages?

In the Employer Skills Survey 2024, skilled trades were the hardest roles to fill, with 48% of vacancies classed as skill-shortage vacancies. By sector, construction had the highest share at 45%. Shortages vary widely by region and occupation, so your own data is the best guide.

How can HR address skills shortages?

HR can map the skills the business needs, audit existing skills and develop people internally through training, mentoring and job shadowing. Improving retention, closing AI skills gaps, widening the talent pool and making recruitment more efficient all help too. Relying on hiring alone rarely solves the problem.

What is a skills audit?

A skills audit is a review of the skills your employees have compared with the skills the business needs, now and in the future. It shows where gaps exist and how big they are. It can also reveal hidden talents, helping you fill roles internally rather than recruiting.

Is it better to hire or train for new skills?

Training existing employees is often quicker and cheaper than recruiting, and it builds commitment and retention. Hiring still makes sense for highly specialist skills you can’t develop in time. Most organisations need a mix, guided by a clear view of which skills matter most.

How does AI affect skills shortages?

AI is changing what many roles involve, creating demand for new skills faster than most employers can train for them. The CIPD’s Good Work Index 2026 found that only 13% of UK employees have had any training in using AI in their current job, so this is a growing gap for many organisations.

How can HR technology help with skills shortages?

HR software can show where skills sit in your workforce and who’s ready for their next move. A learning management system makes it easier to develop people at scale, while recruitment software helps you reach more candidates and respond to them faster. Pulse surveys and analytics help you spot retention risks early.