- Poll of over 2,000 business leaders for the London Local Skills Improvement Plan (LSIP) highlights how rapid growth in artificial intelligence (AI) adoption amongst the capital’s firms is reshaping workforce skills needs
- Proportion of businesses saying they will require advanced digital skills in near future soars
- Record number of firms planning to increase investment in training over the current 12-month period as the world of work evolves
Rapid adoption of AI across London means firms are increasingly facing skills gaps as they try to ensure staff are equipped to take advantage of this technological shift. That’s according to a new poll of more than 2,000 business leaders across the city.
The BusinessLDN survey – conducted by Survation as part of the LSIP – finds that only half (50%) of firms say their existing workforce has the skills and capabilities needed to meet the requirements of their business. The figure is down compared to last year (63%) and the proportion of leaders saying they have significant gaps in skills and capacity (15%) is at a record high (up from 4% in 2025). Around a third (35%) report some gaps in skills and capacity, broadly in line with previous surveys.
The survey also underlines the growing use of AI, with three quarters (75%) of leaders surveyed saying their business is currently using AI in some form. A further 12% report that they are planning to adopt it in future and 8% are investigating its use. Only 5% have no plans to use AI. The vast majority (85%) of firms currently using AI say it has changed the skills required in their workforces, “with a greater need for critical thinking, ethical reasoning, and decision-making.” Only 14% say AI has not altered their skills needs (1% responded ‘don’t know’).
More widely, leaders who report skills gaps most frequently highlight the need for advanced digital skills, including AI, when asked about capabilities they are lacking. Six in ten (60%) have identified gaps in this area, and close to a quarter (23%) say they don’t have the basic digital skills they need across their workforce1. But the need for these skills is expected to grow strongly, with more than three quarters (78%) of all firms surveyed anticipating they will have a significant need for advanced digital skills over the coming two to five years. The figure is up from 66% last year and 56% in 20232.
Mark Hilton, Policy Delivery Director for People and Skills at BusinessLDN, said: “While London businesses are embracing AI, many are finding it challenging to stay on top of their workforce skills needs given the pace of change. Positively, employers are responding by increasing investment in training, but to properly close skills gaps it is essential we have a more agile skills system that is responsive to these rapidly changing needs. Through our leadership of the LSIP, we are helping to deliver exactly that by bringing businesses, education providers and policymakers together to co-design training programmes and ensure that the rise of AI marks a win-win for the city’s economy and all Londoners.”
Amid widespread skills shortages, a record-high 81% of firms say they are planning to increase investment in training over this year. The figure is up from 80% last year, 73% in 2024 and 69% in 2023. Around one in ten (13%) say their levels of investment in training will remain the same, whilst 5% expect it to reduce (1% said ‘don’t know’).
Eight in ten (83%) firms surveyed say they have job vacancies, broadly in line with previous findings from the survey, whilst 17% say they have no open roles.
The proportion of firms stating that they are struggling to fill some vacancies (32%) is at its lowest since the survey began, and down sharply from 46% last year, amid a loosening of the jobs market. Two thirds (67%) say they are not struggling to fill some of their vacancies (1% responded ‘don’t know’).
A fifth (20%) of firms across the capital say they are planning to reduce staff numbers over the current six-to-12-month period. A further 4% of those surveyed say they are “not sure” about whether they will reduce headcounts, whilst the majority (76%) state that they are not expecting to lower their staffing numbers.
Among those planning to reduce their headcount, a quarter (25%) put the move down to cost-cutting efforts, with similar proportions saying that the adoption of AI has reduced the need for entry-level staff (24%) or mid-career staff (23%). The current economic climate and a change of business model were both highlighted by one in seven (14%) as the reason for planned job cuts.
The polling, conducted between 25 November 2025 and 15 January 2026, was carried out as part of BusinessLDN’s leadership of the Government-backed London Local Skills Improvement Plan (LSIP) and follows the release of ONS data showing that the capital has the highest regional rate of unemployment in the UK.
The LSIP is a comprehensive plan for better matching the skills businesses need with those being delivered by the education system, developed in partnership with the Federation of Small Businesses London, London Chamber of Commerce and Industry, and CBI London, with the backing of the Mayor of London and funded by the Department for Education.
Survation interviewed 2,043 business leaders on behalf of BusinessLDN between 25 November 2025 and 15 January 2026. The survey was conducted as part of BusinessLDN’s leadership of the London Local Skills Improvement Plan (LSIP).
- Firms also reported that they are lacking English skills (17%), green skills (19%), cross-cutting skills (36%), basic maths skills (19%) and 1% responded ‘don’t know’.
- Business leaders surveyed also anticipate a need for sector specific skills (44%), green skills (17%), basic maths skills (23%), English skills (20%), cross cutting skills (36%) and 1% responded ‘don’t know’.
