Scottish employers and employees feel the impact of rising skills shortage

Russell Borthwick, chief executive of Aberdeen & Grampian Chamber of Commerce, highlighted the urgent case for Scottish business to access the people and skills it needs to succeed

SCOTTISH firms are concerned about skills shortages, reduced output, growth profitability and staff wellbeing, amid the impact of Brexit, Covid-19 and the war in Ukraine.

The findings were revealed in the Open University’s (OU) Business Barometer 2022 that surveyed 1300 employers in partnership with the British Chambers of Commerce and found that 84% of Scottish organisations are concerned about skills shortages, reduced output, growth profitability and staff wellbeing.

In last year’s report, skill shortages were identified by 62% of employers; this year it is up to 70% and many employers will increase investment in staff training to tackle the knock-on effect on staff morale, wellbeing and increased workload on other staff.

David Allen, senior partnerships manager at the OU in Scotland, said: “Critically, staff in Scotland seem to be under more pressure than staff elsewhere in the UK as the skills shortage increases workload and harms employee wellbeing.”

Many of the reasons for the skills shortage in Scotland are historic but Covid-19, Brexit, the war in Ukraine and rising costs are contributing to the problem as the smaller pool of labour demands higher wages and different working conditions to those that were the norm pre-pandemic.

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