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80% to 76% decline in skills, survey suggests UK’s skills gap may have passed its peak

ManpowerGroup’s Talent Shortage Survey was published today and showed a decline in the volume of organisations reporting skills shortages.

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ManpowerGroup’s 2025 Talent Shortage Survey was published today and for the first time in 10 years, showed a decline in the volume of organisations reporting skills shortages (from 80% to 76%), which suggested the UK’s skills gap may have passed its peak.    

With concerns from employers over rising inflation and business costs following the increases to National Insurance contributions however, Michael Stull, UK managing director of ManpowerGroup, is cautious about what the current skills gap means for the future of British business and productivity.

He said: “The significant drop in the UK Talent Shortage could mean we’re over the peak of the skills gap which has intensified over the past decade since its last drop in 2014.  

“Organisations have worked hard during this time to drive positive change amidst major challenges; by upskilling, reskilling, seeking out new talent pools and through smarter use of technology. 

“Although any movement towards closing the skills gap is positive, we must bear in mind that many other indicators point to a hiring recession.

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“There are fewer jobs out there and this is playing a role in slowing the demand for skills.

“Employers and government must continue to focus on measures to improve UK productivity to pull businesses out of this hiring recession and away from the prospect of an economic recession.

“Now is the time for a smart response that doesn’t rest on improvements already made.”  

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The 4% point drop is the most movement seen in the survey in five years.

It brought the UK closer to the global average where 74% of employers are reporting talent scarcity (the global figure remains unchanged on the year).    

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Following the upheaval and significant socio-economic events over recent years, employers are finding their feet and coming to terms with the less predictable shape and state of the market. 

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Stull said: “In many instances, employers are seeking less niche skills and learning to succeed with what is available in the market.”  

The most popular action being taken by employers to overcome talent shortages, is upskilling and reskilling current employees (28%) as they seek to cut back on recruitment costs by driving internal mobility.

Increasing temporary recruitment is only favoured by 14% of employers as they show preference in targeting new talent pools (23%) and increasing wages (21%) despite the prevalent challenges.  

The survey highlighted the evolving needs of UK employers over the past decade.

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In 2025, the top skills demanded are IT and data skills, operations and logistics skills, engineering skills, sales and marketing skills, front office and customer-facing skills, administration and office support skills, HR skills, manufacturing and production skills, sustainability and environmental skills, and ESG risk and advisory skills.

In comparison, the top skills demanded in 2024 were IT and data skills, administration and office support skills, engineering skills, operations and logistics skills, front office and customer-facing skills, sales and marketing skills, HR skills, manufacturing and production skills, sustainability and environmental skills, and ESG risk and advisory skills.

Looking back to 2014, the top skills demanded were skilled trades, engineering skills, manufacturing and production skills, sales skills, accounting and finance skills, management and executive skills, sales management skills, IT and data skills, administration and office support skills, and logistics skills.

The demand for sales and marketing skills has risen over the year while requirements for admin and office support skills have declined.

This reflected on how businesses are driving efforts to recuperate higher costs and improve return on investment as new AI and tech tools take more prevalence in substituting for many key administrative functions.  

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Stull added: “Increased demand for in-person experiences has driven the growth in customer-facing and front office roles over recent years. 

“While the drop in demand for technical, manufacturing and production skills reflects how off-shoring has had an impact following many high-profile factory and plant closures.

“ESG and sustainability skills weren’t areas we tracked ten years ago and these will definitely move up through the ranks over the next decade.

“While the UK macro circumstances remain challenging, any closing of the skills gap should be seen as a sign of green shoots for improving productivity.

“But we can’t rest where we are and must continue to invest in training and development, preparing thoroughly for further changes in workplace legislation, and adapting recruitment practices without compromising on longer-term goals.”  

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