Almost half of Welsh businesses report skills shortage and lack confidence in AI and green tech

New data from this year’s Business Barometer report published by The Open University in partnership with the British Chambers of Commerce, has found that almost half of Welsh employers (47%) are still reporting worrying skills shortages. 

The annual report, which surveyed 125 Welsh businesses and monitors the current UK skills landscape, highlights that although the landscape in Wales has improved in the last 12 months, skills shortages remain a prevalent issue across all sectors. Despite this, less than one in 20 (6%) Welsh organisations have implemented a written skills plan for their workforce this year, hindering the ability to strategically address these issues and prepare for future demands.   

In particular, organisations have reported a lack of confidence in applying either new AI (56%) or green technologies (48%), skills that employers agree are crucial to growth and sustainability for Welsh businesses and the wider economy. Skills shortages and a lack of confidence, continue to have a knock-on effect on staff morale and wellbeing, as 60% of Welsh employers say shortages have increased the workload of their employees – a clear indicator that employers need a strategic, inclusive skills plan to develop talent to fill key skills gaps.   

Training and development are critical areas of focus for many organisations. The report has revealed that almost two-fifths (37%) of businesses intend to introduce training and development for staff over the next 12 months, with short courses with certification being the most popular choice for Welsh businesses to help develop skills, as well as fostering a supportive learning environment to enhance employee attraction, engagement and retention.  

Encouragingly, 75% of Welsh organisations that currently use apprenticeship programmes are expecting to increase or commit to the same number of learners over the next 12 months, highlighting the value placed on apprenticeships as a means of cultivating new talent and addressing specific skill needs.  

Baroness Martha Lane Fox CBE, Chancellor at The Open University and President of the British Chambers of Commerce commented:   

“Despite tiny green shoots of improvement, the skills gap remains stubbornly high. This year’s Business Barometer, exposes the impact of this enduring challenge on organisations of all types, including overwork, diminished productivity, and compromised wellbeing.  

"What’s concerning is the critically low confidence in AI and green technology and the lack of strategic plans or initiatives to engage vital underrepresented groups – both of which are essential to addressing the pivotal challenges of our future.   

"By fostering innovative strategies and inclusive initiatives, we can bridge the skills gap and build a more resilient workforce.”  

Once again, employers and businesses in Wales have told us that skills and training are key to helping them meet future challenges and giving our economy a boost. At the OU in Wales, much of our focus in recent years has been on supporting businesses navigate the post-covid world through innovative approaches like short courses, microcredentials and degree apprenticeships. Work-based learning can help people reach their potential while they earn, as well as help organisations address the skills gap that the Business Barometer highlights.

Dr Scott McKenzie
Assistant Director of Learning and Curriculum at The Open University in Wales