Jessica O'ConnorSkill gaps, upskilling and reskilling (29.3%) has emerged as the top HR challenge for employers in the UK, according to research by SD Worx.
The research, which surveyed 5,625 HR professionals and 16,000 employees across 16 European countries, highlighted a significant shift in priorities amid a tightening labour market and rising pressures on leadership development.
Skill gaps ranked first with 29.3%, followed by talent acquisition (28%), employee well-being (27.7%), employee experience and engagement (27.3%), and employee retention and turnover (27%).
The study showed that while employee well-being topped the UK’s HR concerns in 2024, it has fallen to third place this year, reflecting a 35.7% to 27.7% decline.
Employee retention and turnover, once higher on the agenda, also saw a significant drop, from 33.8% to 27%.
Additionally, UK employers have reported rising concerns over compliance with labour laws, payroll optimisation, and internal mobility, with each of these issues seeing a marked increase compared to last year.
Compliance with labour laws rose 25% to 17.5%, payroll optimisation surged 46% to 13.7%, and internal mobility climbed 52% to 14.3%.
Workforce stress remained a critical issue, with 42% of UK employees reporting poor physical or mental well-being at work, and 52% describing their jobs as mentally demanding and stressful.
Mental health-related absences were notably higher in the UK, with 24% of employees taking time off in the past year, compared to 18% across Europe.
In addition, 40% of UK employees believed there are insufficient team members to meet demands, a sentiment echoed by 41% of employers, who reported current staff shortages.
Both employees and employers expected this problem to worsen in the future.
On a more positive note, the study found that UK employees were not overwhelmingly seeking to change employers, with just 14% actively looking for another job, while another 14% expressed interest in changing roles within their current organisation.
This trend highlighted the opportunity for employers to foster internal mobility as a strategy for talent retention.
Laura Miller, UK people country lead at SD Worx, said: “As always, it’s about balance when it comes to HR priorities.
“Upskilling is essential to plug the skills gap that many businesses currently face, but to do this effectively you need happy and healthy employees that are energised in the workplace.
“By offering employees career guidance and training, organisations cultivate a culture that encourages growth and makes it attractive for employees to develop new competencies.
“Internal mobility policies are essential for this – giving employees the opportunity to be flexible with their career paths and therefore increase the likelihood that they feel fulfilled in their roles, and loyal towards an organisation.”
