Is the skills gap closing?

A new survey by ManpowerGroup reveals a shift in the skills landscape within the UK, marking the first decline in reported skill shortages in ten years. According to the 2025 Talent Shortage Survey released today, the percentage of organisations facing skills shortages has decreased from 80% to 76%. This change suggests that the peak of the UK’s skills gap may have passed, a trend observed for the first time since 2014.

Despite this decline, Michael Stull, the UK managing director of ManpowerGroup, expressed caution regarding the implications for British business and productivity. Stull attributed the decrease in the skills shortage to the efforts of organisations to address key challenges from the past decade—investment in upskilling and reskilling existing employees, leveraging technology, and tapping into new talent pools. However, he warned of a potential hiring recession, with fewer job openings contributing to a reduced demand for skills.

The survey’s four-percentage-point drop is the most significant movement identified in the last five years, bringing the UK closer to the global average of 74%. The global figures have remained stable this year. Stull noted that employers are adapting to an evolving market, often seeking less niche skills and focusing on existing talent within their organisations.

In terms of strategies to overcome talent shortages, 28% of employers indicated a preference for upskilling and reskilling their workforce. Increased temporary recruitment attracted only 14% of employer interest, while 23% are looking to target new talent pools and 21% plan to raise wages, as they navigate current economic challenges.

The survey also highlighted a shift in the skills demanded by UK employers over the past decade. IT and data skills, which ranked eighth in demand in 2014, now top the list for 2025. There is also a growing need for customer-facing and office support staff, while engineering skills continue to be in high demand.

The increased focus on sales and marketing skills reflects the need for businesses to recover from rising operational costs and improve returns on investment. In contrast, demand for administrative roles has seen a decline, likely due to advancements in AI and technology which are replacing many key functions traditionally filled by administrative staff.

Stull remarked on the heightened demand for in-person experiences that continues to drive growth in customer-facing roles. However, he cautioned that the decline in technical skills, particularly in manufacturing and production, may be attributed to off-shoring trends following substantial plant closures in the UK.

As the economic backdrop remains challenging, Stull believes that any movement towards closing the skills gap should be recognised as a positive sign for productivity improvement. He emphasised the importance of ongoing investment in training and development, the need to adapt recruitment practices, and preparation for potential changes in workplace legislation to maintain progress in the years ahead.