72% of UK firms face skills gaps, turn to AI and upskilling amid £275m productivity loss

The skills gap in the UK continues to widen, with 72% of companies reporting shortages in critical areas such as AI, data analytics, and cybersecurity—up from 69% in 2023, according to DocuSign’s Digital Maturity Report 2024.

As a result, businesses are increasingly turning to ‘quiet hiring,’ upskilling their current employees, and deploying AI tools like ChatGPT to bridge the gaps without increasing headcount. The number of firms using AI to address skills shortages has surged by 42% this year.

Despite substantial investments in digital transformation, UK firms are still grappling with productivity challenges. Employees are reportedly spending an average of two days a week on manual, low-value tasks, costing businesses over £275 million annually in lost productivity. This inefficiency is also contributing to employee dissatisfaction, with 41% considering leaving their jobs due to outdated processes.

While 35% of companies plan to ramp up their investment in AI over the next year, only 43% feel fully equipped to implement these technologies, citing concerns around security and data protection as major obstacles. Nevertheless, enhancing efficiency through AI and digital tools remains a top priority, as firms strive to align their technology investments with improved productivity outcomes.

Sheila Flavell, COO of FDM Group, highlighted the urgency for businesses to support their AI investments with robust skills training. “With AI advancing rapidly, businesses are investing more to stay competitive. However, it’s crucial for companies to provide high-impact skills training to help their staff keep pace with evolving technology. Upskilling in AI, data analytics, and security ensures they have the talent needed to drive digital transformation.”

Flavell emphasised the importance of experiential learning in upskilling efforts, enabling employees to gain hands-on experience with new technologies. “This approach not only boosts productivity but also reduces the reliance on ‘quiet hiring’ and helps retain top talent by offering real opportunities for growth,” she added.

As businesses navigate the challenges of a rapidly evolving digital landscape, the focus on upskilling and integrating AI solutions is set to play a pivotal role in closing the skills gap and enhancing productivity. However, for these initiatives to succeed, companies must also address security concerns and ensure their workforce is adequately prepared to leverage new technologies effectively.

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72% of UK firms face skills gaps, turn to AI and upskilling amid £275m productivity loss