The Gender Skills Gap: Why Britain Can’t Afford to Overlook Women in the AI Economy

AI threatens administrative roles predominantly held by women, yet the skills needed to work with AI - critical thinking, adaptability, emotional intelligence - are exactly what women develop through managing careers around caring responsibilities.

In the final instalment of our Women in Work series with Mercer experts, we explore the metamorphosis taking place in the world of work, where the question isn't whether women can adapt to the future, but whether employers will recognise the untapped potential already in their workforce.

Britain is facing its worst skills crisis in decades, exacerbated by an annual shortfall in skills investment that is costing the economy £20 billion annually in lost opportunities, according to the Learning & Work Institute. The same report shows that the Government has cut investment in skills in England by £1bn since 2010; meanwhile, employers are investing 26% less in training per employee than in 2005.

The numbers tell a stark story of missed opportunity. Women remain substantially underrepresented in over half of the UK's priority growth sectors, according to Skills England's comprehensive study of 743 employers.

The AI Paradox: Threat or Opportunity?

As artificial intelligence reshapes the economy and traditional career paths crumble, The International Monetary Fund predicts that AI will affect 40% of jobs globally, while the Institute for Public Policy Research found that secretarial, customer service and administrative roles - those overwhelmingly held by women - are first in line to disappear under AI automation. This creates what appears to be a perfect storm for female employment.

Yet hidden within this challenge lies Britain's greatest economic opportunity. The skills required to work effectively with artificial intelligence - verbal proficiency, emotional intelligence, critical thinking and adaptability - align precisely with competencies that women often develop through managing multiple responsibilities throughout their lives.

The irony is profound. In creative industries alone, 69% of employers say their staff need urgent retraining due to new technologies, according to Skills England, while life sciences demands workers who can blend advanced AI capabilities with traditional scientific expertise.

As Edyta Prazuch, Principal in Mercer’s Workforce Transformation team, explains, this is not the first time women have risen to a technological challenge. She points to Dorothy Vaughan, once known as a “human computer” in the segregated 1950s West Area Computing Unit at NASA. Vaughan taught herself an early programming language, becoming one of the first technicians to manage computers.

While the tech has advanced, the challenge women face today is somewhat simpler to unlock, says Prazuch. In a world of generative AI, the most-used programming language is no longer Java or Python - it’s English. And in an age when English has become the most important “programming language”, communication skills - a traditional strength for many women - have never been more valuable.

The Scale of Britain’s Skills Emergency

The UK faces a workforce crisis that directly threatens economic growth. Skills England’s research reveals alarming gaps across key sectors: construction faces 52% of jobs unfilled (up from 36% in 2017), manufacturing shows a 42% skills-shortage vacancy rate, healthcare struggles with 40% of positions vacant, and the tech sector has 43% of roles empty as Britain races to become an AI superpower.

The Learning and Work Institute warns that the UK’s skills base may become stagnant, ranking in the middle of Organisation for Economic Co-operation and Development (OECD) countries – a trajectory that could cost the economy £20 billion annually in lost opportunities. This coincides with a period when work itself is transforming at unprecedented pace. Mercer’s Global Talent Trends research shows that two in five workers describe work as “fundamentally broken”, while only 17% of HR leaders describe their organisation as industry-leading in productivity.

That sense of instability is already being felt by workers themselves. Mercer’s Inside Employees’ Minds 2025-2026: Building employee confidence in a changed world research shows that UK staff are increasingly experiencing “FOBO” - the fear of becoming obsolete. Wellbeing has now overtaken financial security as the top concern for employees, with people knowing they need to upskill to secure their jobs in an AI age, but unsure what their employer needs.

As Mercer’s Kerry Ghize explains: “Identifying and bridging any gaps across your workforce can lead to a competitive advantage and could help to improve the performance of the economy.”

Hidden Cost of Gender Bias

Career breaks, often associated with caregiving responsibilities taken up primarily by women, have long been viewed as obstacles to professional advancement. Yet the skills developed during these periods - project management, resource optimisation, crisis resolution and stakeholder management - are precisely what the AI-enabled economy demands.

“We know there’s a huge bench of professional talent out there in the form of women who simply cannot get back into the workplace, even in environments like ours in consulting, where the only tools you require are a laptop,” says Jon Dymond, Fair Pay and DEI Consultant at Mercer.

The economic cost of this waste is staggering. Between 40,000 and 60,000 women in high-skilled tech jobs leave annually in the UK, costing the economy between £2 billion and £3.5 billion every year, according to the Oliver Wyman Lovelace Report 2025, in collaboration with WeAreTechWomen.

Critically, only 3% of women surveyed cite caregiving as their reason for leaving the tech sector. Instead, women point to systemic failures:

• 25% cite a lack of career advancement

• 17% inadequate recognition

• 15% pay inequity

Traditional hiring practices continue to focus on linear career progression and formal qualifications, overlooking transferable skills gained through diverse life experiences. This represents not just individual tragedy, but economic irrationality at a time when businesses desperately need the very capabilities women possess.

The Transferable Skills Revolution

As Dymond points out: “In a sector like professional services, the transferability of skill sets, human judgment and critical thinking pose an opportunity for groups that may prefer to be working from home. That ability to multitask is actually one of the fundamental skills that the AI-enabled economy will require from talent.”

The transformation requires moving from traditional job-based thinking to skills-first approaches. Rather than simply automating existing processes, organisations must fundamentally rethink what they are trying to achieve.

As Prazuch explains: “If the goal is to hang a picture and someone hands you a nail and hammer, we’re not just asking ‘is this the best way to hang the picture?’ We’re asking, ‘what is the best way for people to view this picture?’”

Current demographic trends mean that without decisive action, the UK risks losing its last generation of subject-matter experts (SMEs) to retirement without adequate knowledge transfer.

“If we don’t train our junior populations well, we might be seeing the last wave of SMEs,” warns Prazuch. “We need to flatten the organisational pyramid, bring juniors closer to the SMEs so that when older generations leave, there’s not only a digital twin of our expertise, but also someone human who can share that knowledge.”

The Business Case for Change

Organisations that embrace skill development report significant competitive advantages. Mercer’s Global Talent Trendsresearch shows that 92% of organisations advanced in learning and skills development report a positive impact.

The potential returns are substantial. Organisations failing to focus on skills development risk missing out on up to 9,000 hours of productivity per year across their workforce, while those focused on skills could unlock potential revenue increases of £190,000 per employee.

Individual motivation for development is also clear. Four in five people believe that reskilling will improve their chances of promotion. Yet, according to Mercer’s Inside Employees’ Minds UK 2025 research, nearly a quarter of people spend zero hours on upskilling or reskilling each month - representing vast untapped potential.

The Government Response

Recognising the scale of the challenge, the UK government has set out reforms through the new Growth and Skills Levy, including eight-month fast-track apprenticeships and foundation apprenticeships designed to attract underrepresented groups.

The Creative Careers Programme is receiving a £3 million expansion, while new “bolt-on” AI training will provide modules to upgrade existing workers with artificial intelligence skills.

Yet systemic change demands coordination across policymakers, employers and educators. Women represent the largest untapped talent pool - and unlocking that potential requires frameworks that recognise skills gained through lived experience, not just formal career paths.

The Future of Work

The question isn’t whether women can adapt to the future of work. The question is which employers will recognise and act on the untapped potential already in their workforce - before their competitors do.

Britain faces a choice: continue treating career breaks as career stagnation while scrambling to fill critical skills gaps, or recognise that the solution to the skills crisis may already exist in the talents and experiences of women who have been systematically undervalued.

The £20 billion annual opportunity cost of skills shortages is real. The hundreds of thousands of unfilled roles across priority sectors are real. But so too is the army of talented women ready to fill them.

The only question is whether Britain will choose to write women into that future - or continue to waste the talent that could drive economic recovery and growth.

This will remain a defining issue throughout the year - and a core strand of the Women in Work agenda as we continue to turn insight into action.

With thanks to Mercer for their insight and partnership.

Good for women. Good for business.