For the first time in ten years, the UK’s skills gap is showing signs of improvement, with the ManpowerGroup’s 2025 Talent Shortage Survey reporting a decrease in the number of organisations grappling with skills shortages, down from 80% to 76%.
Despite this encouraging trend, Michael Stull, the UK managing director of ManpowerGroup, advises caution. He highlights that while this reduction may indicate that the skills gap, which has been worsening since its last decline in 2014, might have peaked, challenges remain.
“Although any movement towards closing the skills gap is positive, we must bear in mind that many other indicators point to a hiring recession. There are fewer jobs out there and this is playing a role in slowing the demand for skills,” he added.
Stull said that businesses have worked relentlessly to mitigate the skills shortage through initiatives like upskilling and reskilling employees, expanding talent pools, and utilising technology more effectively. However, he stressed that continued efforts from both employers and the government are essential to boost productivity and steer clear of a potential economic downturn.
The survey results suggest that the UK is gradually aligning with the global average, where the talent shortage figure stands steady at 74%. However, Stull urges that now is not the time to become complacent. “The progress we see today should be the foundation for a smarter, more sustainable response going forward,” he remarked.
How to address the gap?
In addressing the talent gap, businesses are employing different strategies. About 28% of organisations are focusing on upskilling and reskilling their workforce, nearly 23% are broadening their talent pools, and over 21% are opting to increase wages. On the other hand, only 14% are turning to temporary recruitment as a solution.
The survey also highlights a major shift in the types of skills in demand over the past decade. In 2014, IT and data skills were relatively low on the priority list, ranked eighth. Fast forward to 2025, these skills now top the list. The need for customer-facing roles and office support staff has also surged, while demand for engineering expertise continues to remain robust.