A new report from Gigged.AI, The AI Talent Crisis: How Skills-Powered Organisations Can Unlock the UK’s Potential, sheds light on the escalating demand for AI and machine learning talent in UK businesses. The research, based on a survey of senior tech leaders, reveals that 92% of companies are prioritising upskilling in Generative AI (GenAI), yet many organisations are struggling to find and retain the skilled professionals needed to lead their AI-driven transformations.
Plus, 24% of UK businesses feel they are lagging behind international competitors in AI adoption and 34% believe that IR35 has had a negative impact on the ability to bring in the right skills needed in the workplace, driving talent AI overseas to work.
Key Findings:
- AI and Machine Learning: Most In-Demand Skills: With the rapid growth of AI adoption, UK businesses have identified AI and machine learning as the highest-demand skills for 2025. Nearly half (48%) of the UK workforce is expected to be using GenAI by 2025, with businesses estimating a potential time saving of 4 hours per week per employee.
- GenAI Adoption Accelerates: Businesses are already seeing the impact of GenAI. A third (36%) of roles in UK companies are expected to be replaced by GenAI within the next 3 years. In the tech industry, 41% of roles are projected to be displaced by GenAI by 2028. However, businesses are lagging behind international competitors, with 24% of UK businesses acknowledging they are slightly or significantly behind in AI adoption.
- Business Impact Across Functions: AI adoption is driving transformation across multiple business functions. Nearly half (45%) of companies say GenAI has augmented or completely replaced human work in customer service, while similar impacts are seen in data analysis (52%), data entry (48%), marketing (37%), and translations (51%).
- Job Displacement and Transformation Just under a third (30%) of businesses believe 11-25% of roles will be replaced by Generative AI by 2025. The tech industry is expected to see the highest impact, with 41% of roles expected to be replaced by AI in the next 3 years.
- Internal Skills Gaps: While AI adoption continues to grow, over a quarter (26%) of businesses report they lack the internal capabilities to meet the demands of an AI-driven transformation. This highlights the critical need for organisations to not only recruit top AI talent but also invest in upskilling their existing workforce to close the skills gap.
- Freelance and Contract Talent: Many businesses rely on external contractors and freelancers to meet their AI talent needs. However, the shortage of specialised skills, particularly in AI and machine learning, is making it harder for companies to tap into this pool of talent. Plus, restrictions with IR35 mean that AI talent is being driven to work outside of the UK. 34% believe that IR35 has had a negative impact on the ability to bring in the right skills needed in the workplace
The Growing Need for AI Talent
The research paints a stark picture: UK businesses are in the midst of an AI revolution, but they are facing a significant shortage of the talent required to fully realise the potential of AI and machine learning. Companies are turning to Generative AI to automate workflows, improve productivity, and enhance customer experiences, yet many businesses are struggling to access the skilled workers they need to achieve these goals.
Generative AI’s potential is clear: UK businesses estimate that employees could save an average of 4 hours per week by leveraging GenAI more extensively. However, to capitalise on these efficiencies, businesses need the right talent in place. Over 30% of businesses believe that a substantial portion of their workforce could be displaced by AI in the next few years, and they are racing to reskill their teams to avoid falling behind.
Internal Mobility: A Key Solution to Address the Skills Shortage
The report identifies internal mobility as a crucial strategy for businesses to tap into the existing talent pool. A third (33%) of open positions in the past year were filled by internal hires, with businesses increasingly using internal job boards and career development programs to address skills shortages. Yet, businesses continue to rely on outdated methods that businesses are not finding as effective as using a skills tracking software solution (73%).
Moreover, the report suggests that 26% of businesses believe their organisation lacks the internal capabilities to meet the demands of AI-driven transformation, and 31% do not have the budgets to upskill their teams. With businesses struggling to fill critical roles and keep pace with technological advancements, the need for a policy overhaul has never been more urgent.
Gigged.AI, CEO and Co-Founder, Rich Wilson said,
“The AI revolution is already reshaping businesses, but to fully realise its potential, companies need to access the right talent—fast. While AI adoption is accelerating, businesses are facing a growing skills gap as well as being forced to scale back their recruitment efforts due to government policies that restrict access to skilled talent. The rise in national insurance and the lack of addressing IR35 continues to place an undue burden on freelancers and businesses alike.”
Wilson continues,
“ The AI skills gap is no longer a future problem—it’s here. We need to rethink education and training pipelines to meet the demands of emerging technologies and ensure the UK remains competitive on a global stage.”
Wilson believes there are three ways to ensure we have more AI talent in the UK:
- Scrap National Insurance increases so companies stop outsourcing AI work outside the UK.
- Scrap IR35 Reform so companies can easily tap into freelance and contract AI talent that is currently having to work outside the UK (Mostly the US).
- Create an internal mobility platform so all government departments can share talent and share the upskilling and displacement of jobs.
Internal Mobility: The Key to Bridging the Skills Gap
The report identifies internal mobility as a crucial strategy for businesses to tap into the existing talent pool. A third (33%) of open positions in the past year were filled by internal hires, with businesses increasingly using internal job boards and career development programs to address skills shortages. Yet, businesses continue to rely on outdated methods that businesses are not finding as effective as using a skills tracking software solution (73%).
Moreover, the report suggests that 26% of businesses believe their organisation lacks the internal capabilities to meet the demands of AI-driven transformation, and 31% do not have the budgets to upskill their teams. With businesses struggling to fill critical roles and keep pace with technological advancements, the need for a policy overhaul has never been more urgent.
Hung Lee, Curator, Recruiting Brainfood says,
“It’s one of those ‘harsh but true’ observations that most companies do not know what skills or capability they have within the organisation. This includes organisations who really should know, like professional services consultancies. It’s hard work to collect data, validate it and keep it current. The rise of AI presents both challenges and solutions as businesses can no longer afford this ‘skills blindspot’ and yet now also have the promise of a transformational innovation which can handle data problems of practically infinite scale. The organisations who will be the leaders of the AI-enabled era are likely to be those who have the strongest skills intelligence”.
About Gigged.AI
Gigged.AI is a skills-powered Talent Marketplace solving the tech skills shortage for enterprises through internal mobility and open talent. Gigged. Ai’s products employ AI and skills-based matching to help tech leaders put the right people into the right roles with rapid speed and efficiency. Headquartered in Glasgow and founded in 2019, Gigged.AI was recently included in Gartner’s Market Guide for Internal Marketplaces and Sifted HR Tech Startups to watch 2024. Gigged.AI is a member of TechPassport with an 82% enterprise readiness score and is rated 5 Stars on Gartner Peer Insights Internal Talent Marketplaces. For more information or to book a demo, visit Gigged.AI.
Research methodology
The survey was conducted among 300 UK senior tech leaders, manager and above, working in organisations with 250+ employees. The interviews were conducted online by Sapio Research in November and December 2024 using an email invitation and an online survey.
