Digital skill shortages have been an increasing problem in recent years, and it’s become a signal to act. With the pace of technological and societal advancements demanding more from organizations than ever before, it’s no longer a distant threat but an urgent challenge that impacts productivity, innovation, and growth. In The Open University’s Business Barometer 2025 report, these issues are highlighted with the takeaway being clear: if we want to future-proof our organizations, we have to invest in our people, especially in their digital skills. In this blog, we’ll explore the scale and causes of skill gaps, the growing demand for digital fluency, and why organizations can’t afford to see investing in upskilling their employees as optional.
Why Skill-Based Training Must Be a Top Priority
Despite a loosening labor market, 54% of UK senior employers report having a skill shortage within their organization. On top of that, 32% believe the shortage will worsen over the next five years, with rising workloads, limited growth, and delayed digital transformation cited as key consequences. Furthermore, there seems to be a disconnect between employees' and employers' expectations for skill development, with 71% of Generation Z employees believing their workplace should be responsible for providing training, whilst just 45% of employers believe it’s their duty to fund employee development.
These report statistics highlight the urgency for a mindset shift in how organizations approach onboarding and talent development. Rather than expecting employees to perfectly match the skills expectations of your industry, organizations must take proactive responsibility for cultivating them internally. By bridging the expectation gap between emerging talent and employers, businesses not only address immediate capability gaps but also prepare them against ongoing and upcoming technological advancements.
Digital Fluency Is No Longer Optional—It’s a Must.
What was once considered ‘soft’ skills for employees, characteristics like digital fluency, communication, and confidence, are now seen as essential. With AI playing a key role in reshaping entire industries, organizations must rethink how to embrace this shift and support cross-generational talent to keep them current with the latest state of technology. According to the report, 20% of employers are not confident in their ability to deliver AI-related plans, largely due to gaps in digital capability.
At the same time, younger generations are eager and willing to contribute. 48% of Generation Z respondents are already working in or interested in AI, and 67% say on-the-job training influences where they want to work. This shows that the willingness is there; it just needs to be met with the opportunity.
The Cost of Inaction is Rising
Organizations still see training as a financial burden rather than a strategic investment. But this report tells a different story. With the cost of employment increasing, it’s becoming more expensive for employers to fill these skill gaps and harder for them to offer attractive packages to existing and potential employees. While hiring and training both require an investment, studies show that training is typically a more cost-effective way of filling skill gaps. A study in the report stated that while the average cost of replacing an HR manager costs £13,079, upskilling an employee costs just £3,107, resulting in a savings of 76%. And beyond the cost, upskilling boosts employee retention, productivity, and company morale, particularly amongst younger employees who value continuous skill development.
Yet, less than half of the businesses surveyed have a written skills development plan. Without a clear roadmap, it’s difficult to close the gap, especially as digital transformation and sustainability targets accelerate.
The Wake-Up Call You’ve Been Waiting For
If there’s one thing this report highlights, is that we’re not short on talent; we’re short on alignment. The most successful organizations are not waiting for skilled employees to come to them; they’re developing their own skilled employees.
If your business is ready to take the next steps to building a proactive talent pool, now is the time to invest. Partner with ELB Learning’s Learning Strategy experts to design and implement scalable solutions that help close the digital skills gap, boost employee engagement, and future-proof your workforce.
If you want to read the report in detail, download it here.