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Insider UK
Business
Peter A Walker

Scottish employers report lower profitability due to skills shortages

More than three quarters of Scottish businesses (77%) report that skills shortages have caused reduced output, profitability or growth.

The Open University’s latest Business Barometer, in partnership with the British Chambers of Commerce, found that more than two thirds (70%) of Scottish organisations are experiencing the knock-on effect of recruitment challenges.

Skills shortage are also hitting staff morale and wellbeing, with 84% of Scottish organisations stating that the impact increases workload on other staff.

To address the problem, around two thirds (62%) of the 1,300 employers surveyed have implemented some form of written plan around recruitment and training.

As a result, more than half (53%) expect to increase their investment in staff training over the next year.

Organisations also reported they were feeling the full impact of complex socio-economic issues such as Covid-19, Brexit, the war in Ukraine and rising business costs.

David Allen, senior partnerships manager at the Open University in Scotland, commented: “The need for employers to take a long-term strategic approach to addressing the skills gaps is more important than ever.

“Critically, staff in Scotland seem to be under more pressure than staff elsewhere in the UK.”

Russell Borthwick, chief executive at Aberdeen & Grampian Chamber of Commerce, commented: “By 2030 a fifth of Scotland’s population will be of retirement age and by 2050 this will be one quarter.

“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.”

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