UK firms turn to AI and automation as they struggle to find skilled workers
Nearly three-quarters of British firms are struggling to find talented workers in fears that productivity levels are unlikely to rebound after a bumpy recovery from the pandemic, fresh research has found.
Prime Minister Keir Starmer has called on firms to prioritise hiring British workers over sponsoring foreign nationals as part of his plans to boost the UK economy.
However, new research by Barclays suggests that companies are struggling to find workers with the necessary skills to take on these jobs.
The survey of some 1,000 business leaders revealed that one in eight firms saw the lack of skilled labour available as a “major impact” on growth prospects, as 72 per cent of leaders surveyed saw the issue as damaging their chances of boosting productivity.
Companies in London and the West Midlands are particularly affected by struggles to hire talented workers, with the UK fintech sector most affected by the poor quality of applicants and hires.
A third of firms said they planned to upskill employees through training, while a fifth of respondents expressed a desire to hire more proficient workers if funds became available.
Data provided in the Barclays Business Prosperity report reveals the challenge the UK government faces in addressing productivity levels.
Prime Minister Keir Starmer recently drew a link between firms opting to hire foreign workers over training British workers, adding that a new government body, Skills England, would help firms develop plans to boost the number of talented workers in the UK economy.
Separate data provided via the American Express Business Barometer showed that nearly half of medium-sized businesses planned to introduce better training and development to staff.
Its survey also showed that 28 per cent of firms wished to hire new talent over the next twelve months.
Investment in skilled workers
Improving productivity by investing in automation, digital payments technology and artificial intelligence is also a focus for hundreds of firms surveyed by American Express.
Michelle Ovens, director of Small Business Saturday UK,said it was “promising” that small businesses were protecting growth prospects through the use of technology.
“Developing resilience – and looking particularly at how new technology can help drive this – is one of the best things that small businesses can do to secure their long-term success.”
UK productivity has been low on many metrics over the last few years, slipping behind similar economies such as Germany and France in terms of GDP per hour in 2023.
Fresh data released by the Office for National Statistics showed that private sector companies lost a total of 100.5m days in 2024 due to sickness absence, damaging productivity within the UK economy.
The ONS said the sickness absence rate remained higher for public sector employees than private sector employees, with levels remaining above that seen before the pandemic despite a small decrease.