A NEW report from The Open University reveals a growing mismatch between employer needs and available talent – in turn preventing organisations from addressing persistent skills shortages while large numbers of young people remain locked out of the workforce.
The ‘Business Barometer 2026: Harnessing young talent pipeline in a digital world’ is based on a survey of 1,500 UK organisation leaders and 1,000 young people aged 16–24 who are currently not in education, employment or training (NEET). These include 83 employers and 54 young people from Wales. It finds that over half (57%) of employers are experiencing a skills shortage, a figure which is up 3% from last year. Additionally, 42% revealed they’re expecting this figure to worsen.
Positively, businesses in Wales appear upbeat in terms of recruitment. Forty one percent report hiring more staff in the past year, compared to only 27% across the UK. The latest Business Barometer also finds that young people in Wales show a strong appetite to work and develop skills, yet they face significant barriers to entry, even though:
- 68% would be willing to train or upskill to improve their job prospects
- 82% would stay longer with an employer that offers training and development
Even though 80% of employers across the UK say they are prepared to train young people entering the workforce, their words are not always backed by action. Only 43% offer work experience placements, and around a third offer graduate schemes (34%) or internships (33%). In addition, just 34% have initiatives for workers under 25, and only 11% target NEETs directly.
NEETs say that mental health challenges (40%), lack of experience (37%) and feeling underqualified (35%) are key barriers they’re facing to become truly work ready. This reinforces a gap between employer expectations and young people’s access to the experience and support needed to enter work.
In Wales, 46% of young people said that they would like to be in paid employment within the next two years, with 7% looking to combine this with study or training. Erin, 21, from Cardiff, is studying for an undergraduate degree in Philosophy and Psychological Studies with the OU.
Erin said: “I’m lucky to be earning a salary while studying a subject I love. I’d like to go on to become a primary school teacher or a social worker. I think my work experience alongside my degree can help with this.”
Ben Lewis, Principal and Nation Director at The Open University in Wales said: “Wales faces a stark challenge, with the highest proportion of young people not in education, employment or training anywhere in the UK.
“The Open University’s Business Barometer shows that young people want to learn and work, yet too often feel those opportunities are out of reach, even as employers report persistent skills shortages.
“There is a clear disconnect. Addressing it will require coordinated action between the new Welsh Government, Medr, employers, education providers and young people themselves.
“Flexible higher education, backed by sustainable funding and learner support, must be part of the solution. It enables people to earn while they learn and widens access to opportunity, particularly in our most disadvantaged communities.
“That is essential if we are to spread opportunity and prosperity to every part of Wales.”
To find out more how employers can harness new talent, click here.
