IoD press release Employment confidence grows in Scotland as AI thrives and tax burdens remain
New figures published today (24 March) by the Institute of Directors (IoD) Scotland reveal that employment remains the top concern for Scottish business leaders, but confidence in skill levels is improving.
The annual IoD State of the Nation Directors survey asks cross-sector leaders for their views on a range of issues and opportunities across the business landscape.
71% of respondents felt they have the right number of skilled employees for current jobs and future staffing requirements – an increase of 10% from 2024 and 17% from 2023.
Despite this improvement, engagement with skills development initiatives is still low. Over half (56%) of businesses reported not employing apprentices or supporting workplace training schemes.
Similarly, business engagement with universities and colleges has fallen, with 46% of businesses not engaging with any type of further education establishment, compared to 35% last year.
Catherine McWilliam, Nations Director – Scotland at IoD, said: “The skills gap has been at the top of business leaders’ agendas for several years. While it is encouraging to see increased confidence in recruitment and retention, we cannot afford to overlook the long-term talent pipeline.
“It’s encouraging to see a proportion of our members actively engaging with colleges, universities, apprenticeship schemes and workplace training. I’d urge all business leaders to consider this route as a way to help secure Scotland’s future workforce.
“Ongoing debate about the apprenticeship levy may deter some firms from engaging, but we are working closely with cross-sector organisations and education bodies to discuss reform – which we would welcome.”
“88% of members are engaging with CPD training, showing a real drive from business leaders to improve their personal and professional offering. At IoD we know this to be true, as we saw 78 directors achieve their Certificate in Company Direction this year, a 59% increase from last year.”
The survey also highlights a significant rise in the use of AI across Scottish businesses, with 84% of respondents already utilising it within their organisations. Used across a range of functions including administrative tasks, research, marketing, and data analytics, the increased use of AI raises questions about the future impact on hiring and workforce dynamics.
Catherine McWilliam continued: “With automation streamlining business processes, we may see more components of these roles being handled by AI solutions in the not too distant future. Whether it prompts businesses to reassess hiring strategies and reskilling initiatives is yet unknown, but it’s certainly a discussion we’re having with members regularly.”
Beyond employment, business leaders are increasingly worried about cybersecurity. Emerging as the third most pressing business issue over the next five years among those surveyed, companies are working to protect themselves from increasing digital threats.
Similarly, taxation remains a concern, moving up to fifth place on the list of top concerns for Scottish businesses. The survey found that 63% of respondents believe Scotland’s business tax rates are too high, while 75% feel the same about income tax rates.
Nearly half of respondents expressed serious unease over Scotland’s tax divergence from the rest of the UK (49%). Among them, 40% believe tax differences will impact hiring decisions, and 34% fear it could deter investment.
Catherine McWilliam continued: “Tax policies play a crucial role in shaping Scotland’s business landscape. Our survey results show that a number of business leaders remain wary of increasing tax burdens, particularly when we look at Scotland’s ability to attract and retain top talent.
“I’d like to thank all of our members who took the time to complete our State of the Nation survey. The responses have been enlightening and will help to shape our future discussions with decision makers at government level, ensuring leaders’ voices are heard where it matters.”
The 2025 State of the Nation Directors Survey was open to responses from members of the Institute of Directors in Scotland from 8 January 2025 until 16 February 2025. In that time approximately 136 directors responded to the survey. No responses were disqualified from inclusion.
Notes to Editors
Top concerns:
According to IoD Scotland’s State of the Nation survey 2025, the top policy issues that will be a priority for organisations over the next five years are:
-
Employment
-
Entrepreneurialism
-
Cybersecurity
-
Constitution and Corporate Governance
-
Tax
About IoD Scotland
-
The Institute of Directors (IoD) was founded in 1903 and obtained a Royal Charter in 1906. The IoD is a non-party political organisation with members in the United Kingdom and overseas. Membership includes directors from right across the business spectrum – from media to manufacturing, e-business to the public and voluntary sectors. Members include CEOs of large corporations as well as entrepreneurs and directors of public sector bodies, charities and start-up companies.
-
IoD in Scotland has seven branches – Edinburgh, Glasgow, Central, Fife and Tayside, South of Scotland, Aberdeen and Highlands & Islands – https://www.iod.com/events-community/regions/scotland
About the author
Catherine McWilliam is the Nations Director for the IoD in Scotland. Joining the IoD Scotland team in 2021, Catherine has extensive experience in stakeholder engagement and relationship building across the third, private and public sector and is passionate about promoting good governance and diverse leadership. Catherine has recently been recognised as one of Management Today’s 35 Women Under 35 for 2024, and is co-chair of the Edinburgh Regional board of the Lifted Project. She was awarded an Honorary Fellowship from Dumfries and Galloway College in December 2023 and is a member of the Scottish Government’s National Suicide Prevention Advisory Group.
