9 in 10 East Mids businesses face skills gap

A new report into the 2025 skills and recruitment outlook of small and medium-sized enterprises (SMEs) in England reveals nearly nine in 10 (87% of businesses) in the East Midlands are anticipating some kind of skills gap within their business, with the biggest at entry level (35%).

Now in its third year, the Skills Horizon Barometer, launched by the Skills for Life campaign and featuring commentary from local business TG Sowerby Developments, also found that SMEs are more likely to have noticed a skills gap at entry level than in specialist areas (32% versus 23%). However, concerns about retaining staff have decreased since last year – a third (32%) of SME employers cited it as a worry this year, compared to two fifths last year (40% in 2024).

More widely across England, when it comes to specialist skills, opportunities with AI are firmly on the radar for the year ahead, as nearly a quarter (23%) are poised to train their staff in AI related skills or recruit those with knowledge in the field. The research found one in five (19%) are regularly using AI in day-to-day operations, with a further 20% using it occasionally. One in five (19%) also say experience in AI is an asset on a CV for potential new recruits.

While AI knowledge is high on the recruitment agenda for SMEs, they are also looking beyond the skillset to find human characteristics or transferable skills that are the right fit for their organisation too. The top five to pique the interest of employers in the East Midlands for 2025 are:

Exploring the type of candidates East Midlands SMEs are looking for reveals employers looking to offer opportunities to those early on in their career, but crucially candidates who have some experience (43%). While a fifth (20%) of businesses still look to hire those from traditional academic routes, such as university, a sixth (15%) of firms would hire straight from school or college, supporting young people with relevant training to build up their skills, and 32% would look to hire candidates with experience from a different field.

The highlighted findings from the latest Skills Horizon Barometer look to help SMEs understand all the technical education training and employment schemes available to them, including Apprenticeships, T Levels, Skills Bootcamps, HTQs, as well as numeracy and digital skills courses.

James Bonsall, Director at TG Sowerby Developments, Scunthorpe said:  “We look for talent with some experience and a perspective that aligns with our company values and we work with contacts at local colleges, who keep an eye out for suitable candidates for us. Hiring apprentices is great because we can source talent at the start of their career, we can mould them, teaching our ways of working and our level of standard. We find many apprentices learn these skills and then stay on for many years, so it’s a great time investment for us.

“I’d encourage other businesses who are facing skills gaps to look into the opportunities available to them via technical education. There are many options for recruiting and upskilling and we have found it to be a really valuable asset.”

Minister for Skills, Apprenticeships and Higher Education Jacqui Smith said: “Meeting the skills needs of the next decade is central to delivering the Government’s Plan for Change.  Employers are key partners in our mission, helping address skills needs across sectors like AI, green tech, and construction. Using Skills Bootcamps, apprenticeships, HTQs, and T Levels, we’re supporting businesses and individuals to upskill, and establishing Skills England to find and fill skills gaps and support sustained economic growth.

“The Skills Horizon report highlights the progress we’re making together—giving people the skills they need to seize opportunity and drive growth.”