Report: Nearly a half of Northern Ireland businesses struggle with AI adoption amidst persistent skills shortages

New data has found that nearly a half (44%) of organisations in Northern Ireland are still reporting worrying skills shortages, according to this year’s Business Barometer report published by The Open University in partnership with the British Chambers of Commerce.

In particular, organisations have reported a lack of confidence (67%) in adopting new AI technologies and (49%) in applying new green technologies, skills that employers agree are crucial to growth and sustainability for businesses in Northern Ireland and the wider economy.

Skills shortages and this lack of confidence, continue to have a knock-on effect on staff morale and wellbeing, as 55% of employers in Northern Ireland say shortages have increased the workload of their employees. This is a clear indicator that employers need a strategic, inclusive skills plan to develop talent to fill key skills gaps.

The report comes on the heels of last week’s mixed reports on economic performance for Northern Ireland with unemployment figures ranking as the lowest in the UK at the same time as the hospitality and retail sectors showed growth and the private sector economy continued to grow.

Despite the skills shortages, less than one in five (16%) organisations in Northern Ireland have implemented a written skills plan for their workforce this year, hindering the ability to strategically address these issues and prepare for future demands.

Training and development however are critical areas of focus for many organisations. The report has revealed that almost two-fifths (35%) of businesses in Northern Ireland intend to use short courses with certification within the next twelve months, helping to develop skills as well as fostering a supportive learning environment to enhance employee attraction, engagement and retention.

Encouragingly 74% of organisations in NI that currently use apprenticeship programmes are expecting to increase or commit to the same number of learners over the next 12 months, highlighting the value placed on apprenticeships as a means of cultivating new talent and facilitating career changers to address specific skills needs.

And whilst there is a commitment to address the skills shortage from some organisations, the report reveals the majority of businesses in Northern Ireland (63%) still do not have specific recruitment, training and retention initiatives in place for underrepresented groups, including young people, older workers, those with disabilities and neurodiverse individuals. As a result, organisations may be missing out by not investing in widening their talent pools to mitigate skills shortages.

Baroness Martha Lane Fox CBE, chancellor at The Open University and president of the British Chambers of Commerce, said: “Despite tiny green shoots of improvement, the skills gap remains stubbornly high. This year’s Business Barometer, exposes the impact of this enduring challenge on organisations of all types, including overwork, diminished productivity, and compromised wellbeing.

“What’s concerning is the critically low confidence in AI and green technology and the lack of strategic plans or initiatives to engage vital underrepresented groups – both of which are essential to addressing the pivotal challenges of our future.

“By fostering innovative strategies and inclusive initiatives, we can bridge the skills gap and build a more resilient workforce.”

John D’Arcy, director of The Open University in Ireland, explained: “Skills shortages are impacting businesses and staff across the country and employers need to plan work effectively and implement flexible initiatives to develop existing talent.

“With the majority (69%) of students at The Open University in Northern Ireland, currently working full or part-time during their studies, we are well equipped to support organisations through the skills shortage, offering flexible courses and utilising the latest online technology, to fit around business priorities and personal responsibilities.”

Suzanne Wylie, chief executive, NI Chamber, added: “The findings of this year’s Business Barometer correlate strongly with our own research, which quarter-on-quarter, finds that access to people and skills is one of the most persistent challenges facing NI Chamber members.

“Businesses are already playing their part, investing in innovative solutions to recruit and train talent. Creating sustainable working environments, which nurture the workforce of the future must be a top priority for policy makers too.

“Solving the skills challenge requires a multifaceted approach of policy and practical interventions. Amongst those, government support for employer-led solutions to the childcare challenge and reform of the apprenticeship levy to agree a workable, flexible alternative model for the benefit of all regions of the UK, are interventions that businesses believe will make a difference.

“With Northern Ireland effectively at full employment, access to international labour is also critical for driving sustainable growth. So, we are clear that Northern Ireland needs more effective migration, mobility and skills policies which align with regional economic need.

“Solutions to this key challenge are best designed in partnership, with government and businesses working together to deliver resolutions which could have game changing potential for Northern Ireland’s competitiveness.”