New research by City & Guilds reveals how a lack of ‘employability’ skills is hindering productivity – with the training organisation calling for the Government to prioritise NEET support as an economic growth strategy.
The report – ‘Counting the cost: The UK’s Employability Skills Crisis’ – surveyed 908 employers and 1,014 18–24-year-olds, and suggests a widening employability skills gap. It reveals that nearly two-thirds of UK businesses (64%) say candidates with human capabilities such as face-to-face communication, problem solving, and effective time management are becoming harder to find, with consequences that are already visible:
- More than 1 in 3 employers say a lack of employability skills is holding back productivity – while 69% believe AI-powered applicant screening tools prioritise technical skills over these more human capabilities
- Employers report operational errors and delays, increased staff turnover and low morale, lower efficiency, and poor customer service as a direct result of this skills shortage.
- 51% of 18 to 24-year-olds worry that AI will reduce job opportunities for people their age
- Apprentices are the most likely of any group to feel completely confident in face-to-face communication skills
AI is raising the stakes
According to City & Guilds, the rise of AI is not relieving pressure on human skills, rather it is increasing it, as automation takes on more routine tasks. Nearly three-quarters of employers (74%) say employability skills are now more important than technical expertise for workplace success.
Yet despite employer demand for these skills, 69% believe these tools prioritise technical skills over the human capabilities businesses actually need. This means young people with strong employability skills risk being filtered out before a human ever sees their application.
Young people are facing a crisis of confidence
More than half (51%) of the 1,014 18 to 24-year-olds surveyed said they worry that AI will reduce job opportunities for people their age. Many are turning to AI to respond to that anxiety: 41% are already using it to improve their work and communication skills.
The problem may run deeper than skills alone. Only two in five young people (40%) feel completely confident in their face-to-face communication skills. Half (50%) of those surveyed say anxiety or mental health conditions have affected that confidence – more than any other factor cited, ahead of the pandemic (27%) or a lack of support at school (19%). Young people who are NEET (Not in Employment, Education or Training) are hit hardest: they are almost twice as likely as those in employment to lack confidence presenting themselves professionally (34% versus 17%), and more than a quarter (27%) say they simply do not know where to turn for support.
The contrast with those in structured vocational learning is stark. Apprentices are the most likely of any group to feel completely confident in face-to-face communication skills (48%), and three quarters (74%) have received dedicated employability skills training – more than any other segment.
Andy Moss, Interim Chief Executive Officer of City & Guilds, said: “Employers are telling us loud and clear that employability skills – the ability to communicate, solve problems and manage time well – matter just as much as technical know-how, if not more. Yet at the exact moment these skills are most in demand, we’re seeing a growing human skills shortage, made worse by AI-powered recruitment tools that can filter out exactly the candidates businesses need most. Our findings reinforce what employers have long recognised: apprenticeships and vocational training are highly effective routes to developing the employability skills businesses are crying out for, combining practical experience with the communication, problem-solving and teamwork capabilities that are critical for success in today’s workplace.”
City & Guilds recommendations:
- Employers should invest in employability skills through onboarding, early careers programmes and mentoring, rather than assuming young people arrive work-ready, and should review how AI-driven recruitment tools assess candidates.
- Policymakers should ensure skills and employment programmes give employers flexibility to invest in employability skills alongside technical training, including through the Youth Guarantee, the Growth and Skills Levy, the Jobs and Careers Service and TechFirst.
- Education and training providers should embed employability skills earlier, building young people’s confidence in areas such as face-to-face communication before they enter the workplace, to close the gap between what employers need and what new entrants bring.
Read the full report here.
