The findings reveal that while the most acute pandemic-era pressures may be easing, structural mismatches between skills supply and employer demand continue to constrain business growth — particularly in high-value sectors such as construction, health and social care, and manufacturing.

Dr Joe Marshall, Chief Executive of the National Centre for Universities and Business (NCUB), said:

“The drop in skills shortage vacancies from 36% to 27% is encouraging, but we must not be complacent. The fact that we remain above 2017 levels — rather than significantly improving — tells us that this is not a short-term issue. The UK’s longstanding skills mismatches continue to hold back innovation, productivity and growth.”

“What’s particularly telling is how this challenge affects businesses differently by size. While larger employers with 100+ staff have seen skills shortages ease significantly — from 34% to 19% — the smallest businesses with 2-4 employees continue to face the highest skills shortage density at 42%, unchanged from 2022. This suggests that smaller firms lack the resources and networks to compete effectively for skilled talent, creating a two-tier labour market that risks leaving our most entrepreneurial businesses behind.”

“To address this, we need a more joined-up approach between education and industry. Universities have a critical role in preparing graduates with the skills employers need — but this requires deeper collaboration, clearer routes into priority sectors, and long-term investment in talent development.”

NCUB is calling for coordinated action to strengthen the UK’s skills pipeline through:

• Expanded work-based learning and employer-led course design

• Improved data sharing on regional and sectoral skills needs

• Targeted support for sectors facing the greatest shortages

• Greater support for SMEs to engage with skills provision

“In a changing labour market, skills are the bridge to opportunity. Universities, employers and policymakers must work together to ensure that bridge is fit for the future.”

Notes:

• The Employer Skills Survey (ESS) is the UK’s largest and most comprehensive survey of employer skill needs and recruitment challenges

• The full dataset and methodology are available at: https://explore-education-statistics.service.gov.uk/find-statistics/employer-skills-survey/2024

• 27% of all vacancies in 2024 were skills shortage vacancies — down from 36% in 2022

• This is higher than the rate in 2017 (22%), suggesting structural issues persist

• 6% of employers had at least one skills shortage vacancy (down from 10% in 2022)

• Skills gaps affected 4.0% of the workforce — around 1.3 million workers (down from 5.7% in 2022)

• Gaps were most common in technical, digital, and problem-solving skills

• The survey covered over 22,700 employers across England, Northern Ireland, Wales, and Scotland