Scottish businesses are suffering from a significant skills gap and they don’t expect the situation to get much better in the near future. So says The Open University’s (OU) Business Barometer Report 2021, produced this year in conjunction with The Institute of Directors (IoD), with a fifth of the 1,500 senior business leaders polled in the annual survey being from Scotland.

The report found that almost two thirds (62%) of organisations in Scotland are struggling to recruit the skills they need, with 61% saying they think the Covid-19 pandemic has exacerbated the situation. There’s a shortage of specialist, entry-level talent in particular. Almost half (42%) of the respondents think they will continue to struggle to recruit the talent they need over the next 12 months, while more than a third (35%) think skills shortages will remain a challenge for the next five years.

Previous Business Barometer reports have also highlighted sizeable skills gaps, which indicates that this is an ongoing problem.

“The skills gap is a long-term term strategic challenge, rather than a bump in the road,” says Suzanne McQuade, Business Relationships Manager (Scotland) at the OU. “And it encompasses many sectors, extending far beyond what we hear in the news.”

This ongoing skills crisis has a big impact on employers. It also impacts employees. According to the survey, more than half (52%) of Scottish employers think their workforce is overextended because of unfilled vacancies. They say the lack of available talent stifles the potential growth of their business and could be having a negative impact on employee wellbeing.

As a result, business leaders increasingly recognise that it is incumbent on them to address the situation and that rather than taking the short term approach of hiring talent – or trying to hire talent – when the need arises, it’s better to build a strong internal talent pipeline.

The OU/IoD survey revealed that more than half (57%) of business leaders in Scotland highlighted apprenticeships and work-based learning as being critical to achieving long-term success. This correlates with recent research by Skills Development Scotland, a key finding of which is that Scottish employers want more work-based learning opportunities in order to recover from the fallout of the pandemic. Graduate Apprenticeships: Developing Scotland’s Future Workforce, talks about the fact that employers want people to have relevant work experience, rather than just academic qualifications. The report also discusses the need for certain sectors in particular – transport, engineering, construction and energy, for example – to equip workers with more future-focused skills in order to achieve net zero and to operate in a green economy.

Digital skills are in high demand everywhere in the UK, including Scotland. As a result, the OU’s Graduate Apprenticeships in Cyber Security have been hugely popular. International IT services and consulting company, Capgemini, for example, have a number of their Inverness based employees undertaking an OU apprenticeship. Fully funded by the Scottish Funding Council, it is enabling the apprentices to work towards a BSc Hons in Cyber Security. Darren Robbins, Deputy Manager at Capgemini’s Security Operations Centre in Inverness, said: “We are committed to our employees’ development to help them unlock their potential. Our apprentices will use their workplace experience and studies to gain a degree, and Capgemini and our clients will benefit from their new knowledge and understanding of cyber security.”

As employers take a more proactive approach to workforce planning, many (66%) are trying to make their workforce more diverse and inclusive and 64% plan to invest more on training up existing employees. The switch to remote working during the pandemic showed that employees can work and learn remotely. This has opened up new opportunities, enabling employers to tap into a more diverse, geographically dispersed talent pool.

During the pandemic, a significant number of SMEs – organisations with less than 250 employees – in Scotland took advantage of the short courses offered by the OU, such as microcredentials in leadership and management, and digital. Almost three quarters (73%) of Scottish business leaders think the OU’s short courses provided through Scottish Government schemes, like the Flexible Workforce Development Fund (FWDF), are hugely beneficial to themselves and the local economy. As a result, 90% of leaders would consider enrolling. Euan Murning, Director of two Scottish care organisations – Hogganfield Care and Skye Care – enrolled himself and several members of his workforce on OU courses during the pandemic. Accessing the training through the FWDF, they completed a mix of microcredentials and other short courses. “You don’t often get the chance to access high quality training that is funded,” he says.

Find out more about how to unlock the potential of your workforce in Scotland through the OU’s innovative solutions: