How can Scotland leverage its world-class education system, burgeoning tech hubs, and leadership in energy to ensure Scotland’s workforce can meet the challenges of today and seize the opportunities of tomorrow.?
This report, "Skills for Today and Tomorrow", commissioned by CMS Scotland and conducted by the Fraser of Allander Institute, provides an analysis of Scotland’s current skills landscape and outlines future challenges as the country adapts to economic, demographic, and technological changes.
The analysis identifies key trends in the labour market, including a marked increase in vacancies and a growing mismatch between the skills available and those demanded by employers. A quarter of employers report vacancies, with 31% of these being classified as skill-shortage vacancies — a sharp rise from 21% in 2020.
Skilled trades, associate professionals, and professionals are particularly affected, with shortages in technical, analytical, and digital skills most prominent. Internal skills gaps also persist, with 5% of employees deemed not fully proficient in their roles, underscoring the urgent need for upskilling and retraining.
A significant demographic challenge highlighted in the report is Scotland’s aging population. By mid-2045, the number of people aged 65 and over is expected to rise by almost a third.
With over 22% of the workforce aged 55 or older, key sectors such as construction, health care, and transport face significant risks from retirements. This underscores the need for workforce planning to mitigate these impending shortages. In terms of education and training, there remains a lack of alignment between the skills taught and those required by rapidly evolving industries. High-growth sectors like technology and energy are particularly affected by this mismatch.
Employers are increasingly emphasising the importance of not just technical skills but also soft skills such as adaptability, creativity, and communication, which are often underdeveloped in the current education system.
We explore the impact of migration and immigration policy on the labour market. Since 2016, migration has been the sole driver of population growth in Scotland, with sectors like food, drink, and tourism being especially reliant on non-UK workers. However, post-Brexit immigration restrictions, including the increase in salary thresholds for Skilled Worker Visas, are making it increasingly difficult for employers to fill critical roles.
Finally, the report includes detailed occupation profiles for key roles in Scotland’s labour market, such as civil engineers, chefs, IT quality professionals, and architectural technologists. These profiles highlight the skills required, typical entry routes, wage levels, and projected employment growth. For example, the civil engineering workforce is expected to grow by 17% by 2035, driven by demand for skills related to the green transition and infrastructure projects.
The findings of this report underscore the importance of creating a more agile and responsive skills system. Collaboration between government, industry, and educational institutions will be crucial in addressing current and future skill shortages, ensuring that Scotland’s workforce is equipped to meet the challenges of today while seizing the opportunities of tomorrow.