Skills Shortages: Rising Costs Squeeze Recruitment and Training
Skills shortages are confronting employers with a difficult choice: recruit experienced people at a premium or invest in developing their own workforce. The CBI/Pertemps Employment Trends Survey 2026 found that 44% of businesses said rising recruitment and onboarding costs were pushing them towards experienced hires, narrowing opportunities for new entrants.
In Brief
Skills shortages are forcing employers to choose between paying a premium for experienced recruits and developing their own workforce. Rising employment costs are narrowing entry-level and apprenticeship opportunities, specialist skills are commanding above-budget salary offers, and employer investment in training has fallen sharply since 2011. Separately, INTOO UK & Ireland research links burnout to unwanted staff departures at larger employers, with managers less convinced than HR leaders that prevention measures are working.
Key Points
- The CBI/Pertemps Employment Trends Survey 2026 found that 44% of businesses say rising recruitment and onboarding costs are pushing them towards experienced hires, and 53% say cost pressures limit the apprenticeships they can offer. Only 15% are confident about hiring, down from 24% in 2025.
- Robert Half’s 2027 UK Salary Guide found that 40% of hiring managers are offering salaries above their planned range, with 72% of that group citing specialist skills. 78% already include, or plan to include, salary ranges in job adverts.
- Skills England’s annual skills report, citing the 2024 Employer Skills Survey, records skills shortages affecting 27% of vacancies, down from 36% in 2022 but above 22% in 2017.
- Employers in England spent 19% less on training in 2024 than in 2011, a £10.6 billion reduction in real terms. Shorter apprenticeship units and foundation apprenticeships aim to make relevant training easier to access, with nearly one million young people outside education, employment or training.
- INTOO UK & Ireland found that 44% of surveyed employers with at least 250 staff said burnout contributed to unwanted departures over the preceding year. Burnout prevention was rated ineffective by 43% of managers, compared with 27% of HR leaders.
- Respondents prioritised organisational changes — pay and recognition, workload and resourcing, leadership, staffing and work-life balance — rather than more advice on personal resilience. HSE guidance confirms that employers must assess and manage work-related stress risks.
Only 15% felt confident about hiring, compared with 24% in 2025. Meanwhile, 53% said wider cost pressures prevented them from offering as many apprenticeships as they wanted.
Hiring Caution Can Reinforce Skills Shortages
Labour costs were identified as a threat to labour-market competitiveness by 73% of respondents, followed by employment regulation at 72%. Businesses also raised concerns about the affordability of the Government's Make Work Pay programme. Skills shortages are not the only obstacle to expansion: 45% said they lacked demand to justify additional entry-level roles.
The risk is a self-reinforcing cycle. Recruiting only experienced candidates may reduce immediate training costs, but restricting entry routes can leave fewer people able to acquire the experience employers subsequently demand. Addressing skills shortages requires more than competing for those already qualified.
Specialist Skills Still Attract Higher Pay
Recruitment caution does not mean specialist expertise has become easier to obtain. Robert Half's 2027 UK Salary Guide reports that 40% of hiring managers are offering salaries above their planned range to secure talent, with specialist skills cited by 72% of that group. Some 53% expect to increase their budgets for employee pay next year.
For businesses tackling skills shortages, higher offers should be considered alongside existing employees' pay and progression. Otherwise, solving a recruitment problem may create a retention problem. Clear salary bands and consistent review processes can help employers explain differences rather than leave staff to assume their contribution is undervalued.
Robert Half's research announcement also states that 78% of hiring managers already include, or plan to include, salary ranges in job advertisements. Publishing realistic ranges can clarify expectations, but it does not resolve skills shortages by itself.
Training Investment and Skills Shortages
The Skills England annual skills report places these recruitment pressures in a longer-term context. Drawing on the 2024 Employer Skills Survey, it records skills shortages affecting 27% of vacancies, down from 36% in 2022 but above 22% in 2017. The measure concerns vacancies that are difficult to fill because applicants lack relevant skills, qualifications or experience. These are 2024 findings cited in a 2026 report, not a new October vacancy count.
Employers in England spent 19% less on workforce training in 2024 than in 2011, a reduction of £10.6 billion after adjusting for inflation. Smaller businesses face particular challenges, including navigating training schemes and finding time to release employees for longer courses. With skills shortages persisting, employers cannot rely solely on recruiting experienced workers; developing the skills of existing staff is equally important.
Skills England's response includes shorter apprenticeship units for areas such as AI and engineering, foundation apprenticeships in retail and hospitality, and closer alignment of training with Local Skills Improvement Plans. These measures aim to make relevant learning easier to access, rather than assume that every employer needs the same programme.
The report also highlights nearly one million young people outside education, employment or training and a 40% decline in youth apprenticeship starts over a decade. Employers can help address skills shortages by recognising transferable abilities and providing supervised routes into skilled roles, rather than treating previous paid experience as the only evidence of potential.
As we highlighted in our earlier article on upskilling employees, investing in the development of existing staff can help businesses address skills shortages without relying entirely on external recruitment. Employers should identify where skills are lacking, provide training relevant to employees’ roles and give them opportunities to put what they have learned into practice. Effective training should be measured by improvements in skills and performance, rather than simply the number of courses completed.
Burnout Linked to Staff Losses at 44% of Larger Employers
Separate research findings reported by INTOO UK & Ireland indicate that 44% of employers attributed unwanted staff departures partly to burnout during the preceding year. The report found that 27% of HR leaders considered their organisation's approach ineffective, compared with 43% of managers. The gap suggests employers should test whether centrally designed wellbeing measures address the pressures experienced within individual teams.
Asked what needed to change to make high performance sustainable, respondents prioritised pay, reward and recognition (21%), workload and resourcing (20%), leadership and trust (19%), staffing and recruitment (15%), and work-life balance and flexibility (12%). These responses point towards organisational changes, not simply more advice about personal resilience.
These findings also highlight the importance of addressing the underlying causes of workplace burnout, particularly excessive workloads, inadequate staffing and unrealistic expectations. Employers should review how work is allocated, whether employees have sufficient support and whether managers are equipped to recognise and respond to mounting pressures.
There are also legal obligations to consider. The Health and Safety Executive (HSE) guidance confirms that employers must assess and manage the risks associated with work-related stress. Tackling excessive workloads, improving staffing arrangements and addressing poor management practices may therefore be more effective than relying on wellbeing initiatives alone. Addressing these issues can also help employers retain experienced staff.
Employers: What This Means
Employers facing skills shortages should balance specialist recruitment with developing existing staff and creating entry-level opportunities. Higher salary offers also need to be considered alongside current employees' pay. Separately, preventing burnout-related departures requires attention to workloads, staffing and management practices, rather than relying on individual wellbeing support alone.
- Skills shortages - Recruitment and pay: Review how offers to new recruits compare with existing employees' salaries and progression opportunities. Clear salary bands and consistent pay reviews can help avoid solving a recruitment problem at the expense of retaining experienced staff.
- Skills shortages - Training and entry routes: Identify which skills can be developed internally and where external recruitment is necessary. Consider shorter training options and apprenticeships, assess applicants' transferable skills and give employees time to apply their learning. Measure improvements in performance, not simply courses completed.
- Burnout - Workloads and staffing: Check whether workloads and deadlines are realistic for the staff available, particularly before busy periods. Address persistent understaffing, uneven work allocation and inadequate support rather than expecting employees to cope through greater personal resilience.
- Burnout - Management and prevention: Compare HR's assessment of prevention measures with the experience of line managers and staff. Assess work-related stress risks, act on the findings and review whether changes improve working conditions. Managers should have the support needed to recognise and address mounting pressures.
