Is there really a skills shortage, or are we just unprepared for change?

Job vacancies have risen to record highs and the UK labour market has gaping holes it needs to fill and fast. But is this because of a genuine skills shortage, or has the UK failed to respond to a changing work landscape? Business Leader investigates.

Addressing the digital skills shortage

One of the biggest industries currently facing skills shortages is the tech sector. According to a report from Robert Walters, 70% of employers in the tech sector are anticipating a skills shortage, whilst 24% believe it will have a large impact on their recruitment. This comes at a time when the number of jobs in the sector is on the rise too.

According to a report from Tech Nation, the number of tech jobs advertised in the first half of 2021 was 176,818, up from 124,775 in 2019, so 42% higher than pre-pandemic levels. Also, tech vacancies now make up 13% of all the UK’s advertised vacancies, compared to 12.3% in 2020.

So, as tech roles have started to encompass a larger share of the job market, you would expect the number of people with the required training to fill these roles would have risen too. However, that is not quite the case.

According to the UK Government website, 11.3 million people (21% of the UK population) lack full basic digital skills, whilst research by Ascentis shows that these figures are likely to be much higher.

According to GOV.UK, 4.3 million (8%) also have no basic digital skills at all and 5.4 million working adults (10%) are without basic digital skills. People with a registered disability are also four times as likely to be offline, whilst 28% of those aged 60+ are offline.

Whilst it’s important to point out that many tech sector jobs will require more than basic digital skills, there are unlikely to be many tech jobs that can be done without at least some digital literacy.

As the pandemic has accelerated the shift to remote working and created an increasingly digitalised world, the lack of digital skills has created additional unfilled vacancies too.

Keren Pakes, General Manager at The Bright Initiative, explains: “Data has become a fundamental resource that all organisations need to operate, creating an urgent need to build a workforce with the skills and understanding needed to thrive in a data-driven economy.

“There is a lot of time to make up – in May last year, a report for the Department of Digital, Culture, Media and Sport (DCMS) estimated that over 230,000 vacancies that require hard data skills were unfilled in the UK. And just a month later, commissioned research from Forrester found that recruiters ranked data literacy as the skill highest in demand for entry-level candidates – but that only 48% of academic institutions have data literacy skills initiatives in place.

However, steps are being taken to improve the data literacy of the UK population.

“The UK’s National Data Strategy (NDS) is a step in the right direction that recognises the data revolution has implications not only for experts with advanced analytical skills but for the entire UK workforce. While not every worker needs to become a data scientist, everyone will need a basic level of data literacy to operate and thrive in increasingly ‘data-rich’ environments.

“The answer has to be collaborative action from industry, businesses and educators, working together to make sure that the current and future workforce is able to unlock the opportunities of data.”

Construction and home improvement

The construction and home improvement industries are also suffering from a lack of trained workers. According to the Construction Skills Network forecast for 2021-25 published by the CITB, the construction industry will need to hire 217,000 workers by 2025 to meet rising demand. But whilst you would think increasing demand would be a good thing, there is a risk of these vacancies going unfilled.

In his article exploring the challenges facing businesses taking on apprenticeships, Damian Walters, CEO at the British Institute of Kitchen Bedroom and Bathroom Installation (BIKBBI), discusses some of the problems specifically affecting the kitchens, bedrooms and bathrooms (KBB) sector.

He comments: “Made up of thousands of ‘micro-employers’ in every part of the country, KBB installation is a service that almost everyone will need to call on at one time or another, meaning that those with the right skills are constantly in high demand. Indeed, the industry is currently seeing record levels of demand – with the enforced time people spent in their homes over the past two years creating a wave of enthusiasm for investing in home improvements!

“This boom in demand has given greater urgency to the need for our industry to invest in the skilled workforce of the future. Put bluntly, there are just not enough skilled installers to keep up with the current boom in consumer demand for home improvements. This means customers are having to wait months instead of weeks for new kitchens and bathrooms to be installed.

“Unfortunately, the lack of skilled tradespeople is part of a long-term trend. Not enough young people have been encouraged to come into industries like ours, despite the prospect of a high-earning, stable career that it offers. We’ve got by for too long with an ageing workforce that is now looking forward to retirement – with over a third of installers suggesting that they are making retirement plans in a recent survey we ran.”

Damian goes on to say apprenticeships are the answer to addressing the lack of skilled workers and he is not alone in this. And with National Apprenticeship Week currently being celebrated, we should expect to see a rise in the number of apprenticeships shortly.

The University of Gloucestershire, for example, has been helped by the week-long celebration, seeing its number of apprentices increase from 35 in 2016 to 723 in 2022.

However, according to recruitment expert Amanda Coulson, employers’ attitudes can be a stumbling block for apprenticeship take up.

She comments: “According to an annual survey by PwC, the UK will lack three million highly skilled workers by 2022 and this is not discriminatory against one certain sector. It covers tech, construction, retail, hospitality and more.

“Employers can quite literally mould the training provided to what they require in order to fill any gaps in their organisation with talented employees. However, there still seems to be a mindset that work produced by an apprentice might be of lesser quality due to them not understanding the realities of work.

“It was recently published that over a third of engineering employers express concern that apprentices don’t understand the realities of work in their industry and that they don’t have the necessary technical skills.

“But, if the apprentices are given the right training and guidance and are part of a thriving work experience, how can an employer truly say this if they aren’t willing to give them a chance?

“There needs to be a mindset shift that allows for flexible expectations when it comes to apprenticeships. I believe that young people and those new to working life really have the opportunity to come with fresh ideas that can help understand and tackle some challenges that businesses face today – for example, climate change or the continuation of moving into more of a digital world.”

How can the UK successfully address its record number of vacancies?

Whilst the pandemic has undoubtedly hastened the skill shortage in the digital sphere, the lack of skilled workers in construction appears to be a reflection of a more long-term issue. And whilst apprenticeships can help, more is needed to bring the number of vacancies down.

According to Dr Maria Kutar, Co-Lead of the Disruptive Technology Cluster at the University of Salford Business School has some suggestions.

“According to Office for National Statistics (ONS), the number of job vacancies in October to December 2021 rose to a new record of 1,247,000, an increase of 462,000 from the pre-coronavirus (COVID-19) pandemic level in January to March 2020.

“To successfully address this, we need education and training to be available for people to develop the skills needed – both for young people through apprenticeships and further/higher education, and also to ensure that adults have the opportunity to retrain and develop new skills.

“This will take time; in the short term, this must be supplemented with a planned approach to addressing current shortage areas by providing a responsive and flexible work visa scheme that meets the needs of industry.”

In addition to addressing current labour shortages, there’s also futureproofing the UK workforce to prevent such widespread vacancies from reoccurring to consider. However, Dr Kutar offers some additional on this.

She continues: “The World Economic Forum shows that by 2030 workers will require more technological as well as social and emotional and higher cognitive skills. The changing nature of work means that it is not just school leavers who should be equipped with these skills – workers will need to adapt over the course of their working lives, and we need to ensure that training opportunities for those who are under and unemployed equip them with the right skills.

“Providing funding for lifelong adult education would be a key enabler- a skilled workforce is vital to improve productivity, and can contribute to innovation and growth of highly skilled jobs. ‘Future Proofing’ the workforce also requires organisations to invest in ongoing staff development and highlights the importance of developing independent lifelong learning skills. These are a key element of the business education at Salford Business School and should be embedded across HE.

“Lessons learned from COVID-19 have shown how disruptive changes in the workplace can impact the skills needed, and flexible digital skills are key to success. ‘Human-centred’ organisations which support and train their staff should be the trend for the future – even with increasing involvement of emerging technologies such as Robotics and AI, we still need humans to develop different ways of working.”