For the first time in ten years, UK organisations are experiencing a decline in the number of skilled worker shortages, according to the 2025 Talent Shortage Survey by ManpowerGroup. This pivotal report highlights a potential turning point in the UK’s ongoing struggle with talent shortages—a struggle that has challenged employers across industries for over a decade.
ManpowerGroup’s findings reveal that 76% of UK employers now report difficulty in filling positions, compared to 80% last year. This drop may signal that the UK’s skills shortage, which has worsened since its last improvement in 2014, could finally be stabilising. However, with inflation, rising business costs, and increased National Insurance contributions continuing to weigh on businesses, the outlook remains cautious.
Are We Past the Peak of the UK’s Skills Gap?
Michael Stull, UK Managing Director of ManpowerGroup, sees this decline as a hopeful sign but advises careful optimism. “The significant drop in the UK Talent Shortage could mean we’re over the peak of the skills gap,” he explained. “Over the past decade, organisations have worked hard to drive positive change amidst major challenges. They’ve focused on upskilling, reskilling, exploring new talent pools, and leveraging smarter technology.”
Indeed, upskilling and reskilling employees remain the most popular solution for addressing talent shortages, with 28% of employers prioritising these initiatives to reduce recruitment costs and foster internal mobility. Other strategies include increasing temporary recruitment (14%), targeting new talent pools (23%), and raising wages (21%) to attract skilled professionals.
A Hiring Recession Amidst Progress?
Despite the encouraging drop in talent shortages, Stull warns of other concerning trends. “Although any movement towards closing the skills gap is positive, many indicators suggest we’re entering a hiring recession,” he noted. “With fewer job openings, the demand for skills is slowing. Employers and government must collaborate to improve UK productivity and steer businesses away from the threat of an economic recession.”
Stull emphasised the importance of a strategic, forward-thinking approach. “Now is the time for a smart response that builds on recent improvements. We can’t afford to rest on what’s already been achieved.”
Changing Skill Demands in the UK Workforce
The past decade has seen a remarkable shift in the skills employers need. According to the survey, IT and data skills are now the most in-demand, rising from 8th place in 2014 to 1st in 2025. Meanwhile, the demand for customer-facing roles and office support staff has also increased significantly. However, engineering skills remain a top priority, underscoring their enduring importance to UK businesses.
Conversely, demand for admin and office support skills has declined, reflecting changes in workplace automation and efficiency. At the same time, demand for sales and marketing skills has risen, driven by the evolving needs of businesses in a competitive marketplace.
Stull pointed out another trend shaping workforce demands: “Increased demand for in-person experiences has driven the growth of customer-facing and front-office roles. Meanwhile, offshoring and high-profile factory closures have reduced demand for technical, manufacturing, and production skills. ESG and sustainability skills, which weren’t even tracked a decade ago, are becoming increasingly important and are likely to climb in priority over the next ten years.”
Moving Forward: A Call to Action for UK Employers
While the closing of the skills gap offers hope, Stull stresses the need for continued investment and innovation. “The UK’s macroeconomic circumstances remain challenging, but any narrowing of the skills gap is a green shoot for improving productivity,” he said.
To ensure sustainable growth, businesses must continue to invest in training and development, adapt to upcoming changes in workplace legislation, and refine recruitment strategies without losing sight of long-term goals.
Conclusion The 2025 Talent Shortage Survey provides a glimmer of hope amidst the challenges UK businesses face. The path forward requires a collective effort from employers and policymakers alike to build a resilient workforce capable of meeting the demands of an evolving economy. By prioritising upskilling, reskilling, and strategic hiring, the UK can turn this moment of progress into lasting success.
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