More than a third (35%) of job vacancies in Wales were hard to fill in 2022* due to the quality of applicants and skills shortages, affecting 10% of all businesses, according to new analysis from the CIPD.  

The new CIPD report Devolution and evolution in UK skills policy: Finding common ground across the four nations, explores skills policy of the four UK nations, with a particular focus on UK apprenticeship systems and their outcomes. 

It shows that over the course of six years, skills shortages have now more than doubled in Wales from 9,000 in 2017 to 20,600 in 2022, and employers are found to be spending 20% less on training per trainee. This comes at the same time as the Welsh Government announces cuts - due to lack of demand - of £17.5 million to apprenticeship funding. This is despite the proportion of apprentices per 1000 employees being twice as big in Wales than in Scotland and Northern Ireland.  

The CIPD’s report also highlights that Wales is the weakest performing UK nation on the basis of workforce productivity per hour, coming in at just 84% of the UK national average figure for 2021.  

In response, the CIPD in Wales is calling on the Welsh Government to stimulate more interest in the uptake of apprenticeships, particularly for under 25s who represent less than 50% of enrolments compared to over 25s, and to boost the capacity of SMEs to engage with the apprenticeship system through enhanced and holistic business and people management support.

Lesley Richards, head of the CIPD in Wales, said:

“We know from our research that these skills shortages are in part due to the COVID-19 pandemic, coupled with recent post-Brexit immigration changes, which exacerbated skills and labour gaps in Wales. But such shortages can hinder economic growth by limiting Wales’ ability to meet the demands of industries and sectors, leading to inefficiencies, missed economic opportunities and decreased productivity, which is what our analysis demonstrates.

“The Welsh Government has introduced a number of reforms and policies over the years to try and tackle some of these shortages, which includes changes to the post-16 education and skills system and the recent introduction of the Plan for Employability and Skills, which aims to help people upskill, access fair work and thrive. But we’d like to see more being done from policy makers to ensure we’re upskilling and nurturing talent in the right areas. We welcome the establishment of the Commission for Tertiary Education and Research (CTER), which has the potential to be transformative for Wales, and will create an integrated and coherent post-compulsory education system with pathways and opportunities for learners.”

Lizzie Crowley, senior policy adviser at the CIPD, the professional body for HR and people development, said:

“Skills and labour shortages continue to be a real problem across the UK and all sectors of the economy, and we need to get apprenticeships and vocational education right if we’re to tackle these challenges. Investment in training and development is critical in addressing skill gaps and improving workplace productivity.

“Despite the importance of SMEs to the UK economy, there are still major barriers in their engagement with the current skills system, including its complexity, lack of resources, and poor people management capability. Good quality advisory and business support services, aimed at boosting management capability and increasing understanding of skills development, are key to engaging small businesses.”

Read the report