New report reveals Wales has the UK’s highest skills shortage – but young people are ready to step up

A MAJOR new report by The Open University has revealed a growing disconnect between Welsh employers and the next generation of workers, potentially undermining efforts to tackle the country’s persistent skills shortages.

The Business Barometer 2025: Skills for today and tomorrow surveyed over 2,000 business leaders and 1,000 Gen Z adults across the UK — including 139 employers and 80 young people under 25 in Wales. It found that 58% of Welsh organisations are currently experiencing a skills shortage — the highest of all UK nations.

Yet despite this, only 31% of those employers have specific initiatives in place to recruit, retain or train under-25s.

Gen Z ready to respond — but need support

Encouragingly, over half (54%) of young people surveyed in Wales are aware of the national skills gap and are actively considering it in their career planning:

• 73% are choosing careers based on areas of high demand
• 66% say they would stay longer with employers who offer training and development

However, the report suggests that this willingness is not being met with sufficient guidance or opportunity — especially in fast-growing areas such as artificial intelligence (AI), digital, and green skills.

While 58% of Welsh Gen Z respondents say they are interested or already working in AI, one in five Welsh employers report lacking confidence in their ability to deliver AI strategies due to talent shortages.

Call for action on training and inclusion

Dr Scott McKenzie, Assistant Director for Learning, Skills and Innovation at The Open University in Wales, said: “The data is clear: there’s a mismatch between employer intentions and practical action. But there’s also a real opportunity. Welsh organisations can bridge the gap by developing structured skills plans, investing in flexible learning, and opening pathways to a more diverse talent pool. Those who act now will be the ones best placed to thrive in the future.”

Baroness Martha Lane Fox CBE, Chancellor of The Open University, added: “Young people are motivated, digitally savvy and want to contribute. Employers must meet that energy with training pathways and real opportunities. Waiting for skills to arrive is no longer enough — smart organisations will build them proactively.”

Diversity still lagging behind

While 80% of Welsh employers say equality, diversity and inclusion (ED&I) is important to their organisation, 25% admit to having no initiatives in place for underrepresented groups such as returners, career changers, or people with disabilities and neurodivergences.

This is seen as a missed opportunity to reduce economic inactivity and broaden the talent pipeline — especially in sectors where workforce shortages are most acute.

Skills shortage set to worsen

The Business Barometer, now in its ninth year, shows the issue is far from easing. In Wales:

• 38% of employers expect the skills gap to worsen over the next five years
• 60% say shortages are increasing workloads on existing staff
• 43% report reduced productivity
• 37% have scaled back growth plans
• 20% fear they won’t be able to meet their AI ambitions by 2030

Yet, despite these pressures, only 36% of Welsh employers have a formal skills plan in place. And while training is proven to aid staff retention, 30% say they hesitate to invest in staff development for fear employees will leave.

Full report and recommendations available at: https://business.open.ac.uk/business-barometer

AN ORGANISATION representing training providers across Wales is calling on allpolitical parties and2026 Senedd election candidates to commit to doubling investment in apprenticeships to support 200,000 apprentices over the next Senedd term.

Launched today (June 24), the National Training Federation for Wales (NTFW) ‘Manifesto for Apprenticeships: Building a Skills First Economy for Wales’ seeks to “build a Wales that thrives on skills, opportunity and ambition for everyone.”

According to the Centre for Economics and Business Research, doubling the investment in apprenticeships over the next Senedd term could generate an extra £3.4 billion in additional lifetime earnings for people in Wales over the next 30 years.

“Apprenticeships are not just a pathway to employment; they are the backbone of a prosperous Welsh economy, equipping people across all backgrounds with hands-on skills tailored to the needs of our industries,” says the NTFW manifesto.

“Investing in apprenticeships is an investment in people and in the future of Wales. With fair funding, inclusive access and strong partnerships, apprenticeships can help power a more equal, skilled and resilient nation.

“NTFW urges all Senedd candidates and political parties to commit to this vision. Let’s build a Wales that thrives on skills, opportunity and ambition for everyone.”

Collaboration is a key word throughout the manifesto, as the NTFW seeks to work in partnership with the Welsh Government, Medr, training providers, employers, learners, the Federation of Small Businesses (FSB), Confederation of British Industry (CBI) and the Coleg Cymraeg Cenedlaethol.

“By collaborating closely with Medr, we can ensure apprenticeship programmes are responsive, innovative and aligned with emerging industry needs,” states the manifesto.

“By working together, we can shape apprenticeship programmes that directly address skills gaps, boost productivity and support economic diversification.”

The NTFW commits to providing equal access to qualifications delivered through the medium of Welsh or bilingually and calls on the next Welsh Government to prioritise mental health and wellbeing support services for apprentices.

The manifesto calls on the next Welsh Government to restore money cut from the apprenticeship budget last year and tointroduce long-term, sustainable funding that offers equity with other forms of post-16 education.

It says apprenticeships must be placed at the heart of government policy and calls for a vocational skills strategy, developed in partnership with providers, to determine what is needed to maximise opportunities.

The manifesto also calls for:

• a skills system that speaks to the aspirations of a Welsh economy.
• people of all ages and backgrounds to be able to retrain or upskill through apprenticeships, driving social mobility and inclusive growth.
• increased funding for apprenticeships in growing sectors, such as green energy, digital innovation and healthcare, to future-proof Wales’s workforce.
• Apprenticeship opportunities in every part of Wales to support local economies, reduce inequalities and empower communities.

Speakers at the launch, held at St. David’s Hotel, Cardiff Bay, were NTFW chair John Nash, strategic director Lisa Mytton, FSB Head of Wales, Ben Cottam, Coleg Cymraeg Cenedlaethol chief executive, Ioan Matthews, and Cavendish Cymru director Nerys Evans.

Lisa Mytton, NTFW strategic director, said: “We have launched this manifesto to set out what we expect an incoming Welsh Government to prioritise in their policies and skills strategy to boost the economy of Wales.

“Our mandate to the next government is to ensure that increased investment is available for apprenticeships. We are seeking that commitment from all candidates running for the next Senedd election.”

John Nash, chairman of NTFW, added: “This is an unprecedented moment. We have created an ambitious Manifesto for Apprenticeships that should be essential reading for every Senedd candidate.

“We are seeking a commitment from all political parties that apprenticeships will be at the heart of future Wesh Government policies to grow a prosperous and resilient Welsh economy with a highly skilled workforce.”

Picture caption:

NTFW wants investment in apprenticeships to double to support 200,000 apprentices over the next Senedd term.

DIRECT Welsh Government investment in businesses totalling in excess of £600m has seen more than 40,000 jobs created or safeguarded across Wales during this government term.

As part of the £600m, the Cabinet Secretary for Economy, Energy and Planning, Rebecca Evans is today announcing close to £10m to support close to 700 jobs at three businesses across Wales.

Through investment made in loans, equity and grants, the Welsh Government is making significant progress delivering on its commitment to building a stronger, fairer, and greener economy.

Boccard UK Ltd, based in North Wales, is receiving Economy Futures Funding of £1.2m to secure a move to a substantial new unit and significantly increase its fully digitised manufacturing capacity.

This will help the company, which is headquartered in France, to retain its market leading position in the nuclear sector in Wales, safeguarding 59 jobs and creating in excess of 150 new positions.

An £8m Welsh Government investment is also contributing to safeguarding 325 jobs at WEPA, in Bridgend.

It is part of a significant investment by the company, which specialises in the production and distribution of sustainable hygiene paper and innovative hygiene solutions, to reduce energy consumption at its Maesteg site and boost production capacity.

Further funding of £540,000 is also helping bring an old factory, which closed in 2022 with the loss of 60 jobs, back into use in Clydach Vale, near Tonypandy.

Coppice, an international manufacturer and supplier of packaging to the food industry will create 83 jobs at the new operation, with this number potentially increasing to 150 in the next five years.

Speaking during a visit to Boccard’s new site in Deeside, Flintshire, Cabinet Secretary for Economy, Energy and Planning, Rebecca Evans, said:

“The Welsh Government is proud that we have supported over 40,000 jobs since the start of this Senedd term through our business support programmes. We have rolled our sleeves up to deliver for businesses, communities, and thousands of workers across Wales – like those here at Boccard, which is exactly the sort of overseas-owned company we are looking to attract at our Investment Summit later this year.

“From direct business support to property investment and long-term regional planning, we are not just supporting businesses and job creation but building the infrastructure and conditions that will enable Welsh businesses to grow, invest, and future-proof their operations.

“We will continue to make Wales a place where good jobs, strong businesses, and thriving communities are the foundation of a stronger, fairer, and greener economy.”

Douglas McQueen, Managing Director of Boccard UK, said: “Boccard is delighted with the support from the Welsh Government in securing the Economy Future Funding, which underpins our commitment to creating highly skilled jobs in Deeside. This is growing the UK’s nuclear and industrial supply chain which is key in our challenge to meet net zero targets.”

Leon Elston, Managing Director of Coppice/Sirane, said: “We are delighted to announce the establishment of our new manufacturing facility, following the recent acquisition of Sirane. This exciting expansion marks a significant milestone for the Coppice Group, further broadening our food packaging portfolio and reinforcing our position as a market leader in sustainable packaging solutions.

“Our continued success is rooted in strong employee engagement and meaningful collaboration with the communities in which we operate. The opportunity to invest in the Cambrian site and support employment regeneration in the Rhondda was a compelling factor in our decision. This new facility provides a strategic platform to scale operations and enhance our presence in both current and emerging markets, whilst making a positive contribution to the local economy.

“This project has been made possible through the invaluable support of the Welsh Government. Their funding played a pivotal role in our investment decision and enabled the development of this purpose-built manufacturing site.

“As we move forward, we extend our sincere thanks to the Welsh Government for their continued collaboration and commitment to Coppice’s ambitious growth plans. The integration of Sirane and the Cambrian facility will be instrumental in achieving our mission to be the global supplier of choice for sustainable packaging.”

WEPA Mill Manager Jordi Goma-Camps Trave said: “We highly appreciate that the Welsh Government supports this important project for WEPA. It will not only improve the sustainability of our manufacturing process, but also increases our production capacity and contributes to the future viability of the site.”