Boosting investment in skills is vital to supercharge the UK economy

Most businesses are continuing to grapple with digital transformation agendas in the race to adopt emerging technologies. But to capitalise on success, businesses need to have the right talent – and skills – in place.

Skill levels knob button. Increasing Skills Level. Wireframe hand turning a skill test knob to the m
Shutterstock/Iurii Motov

This is a contributed article by Sean Farrington, EVP EMEA at Pluralsight

The number of tech roles in England and Wales surged by 105% year-on-year, reaching record levels in 2021, and tech firms advertised more IT vacancies in the last year than all British businesses combined in 2020. However, demand is heavily outstripping supply with 43% of vacancies in STEM roles which is a challenge to fill because of a shortage of applicants with the required skills.

Constrained by budget, resource or know-how, businesses are clearly struggling to get the talent in place to truly embrace technology and stay competitive. For a country that has suffered with low productivity levels since the financial crisis of 2008, more must be done to encourage and enable employers to invest in technology and workforce development.

The current state of UK skills

In February, the UK government unveiled its plans for ‘levelling-up’ the country. The outline includes a focus on skill development, with a pledge that by 2030, the number of people successfully completing high-quality skills training will have significantly increased in every area of the UK. In summer 2021, only 15,000 UK students sat a computing or ICT A-Level – accounting for less than 2% of the overall exams. As such, a greater focus on skills development is a welcome step, which should help to develop a pipeline of in-demand talent.

Yet, the government initiative has been met with widespread criticism – which has labelled ‘levelling-up’ as a slogan without a clear delivery plan. And this is not the first condemnation of government efforts in this space. Others have previously argued that there has been long-term underinvestment into skills in the UK. Meanwhile the recent Spring Statement acknowledged that the UK lags behind in adult technical skills compared to its international peers with similar strategies in place. For example, Industrie 4.0 in Germany, Made in China 25 in China and America Makes in the USA – which all focus on nurturing talent and reducing staff turnover by teaching technical subjects at every stage of a person’s career.

Keeping up with the pace of change

The pace of technological advancement, driven by the Covid-19 pandemic, has exacerbated the skills gap. Technical job specifications are constantly evolving, so much so that skills learnt just five years ago quickly become outdated.

For those businesses that are able to hire and develop the talent they need, the events of the last two years have spurred the “Great Resignation”. While it may seem something of a buzzword, its impact cannot – and should not – be underestimated. Recruitment teams are fighting against a candidate market and struggling to retain key staff – and skills - within organisations.

For businesses that want to survive and thrive post-pandemic, skill agility is key. A strong internal training programme that can fill in-demand roles whilst building out future talent pipelines must become a boardroom priority.

To successfully integrate learning and development (L&D), businesses need to adapt to modern working habits, avoiding a one-size-fits-all approach. Digital learning platforms that offer flexibility through short bite-sized courses – accessible anytime and anywhere - will allow employees to upskill quickly in a personalised way, tailoring learning to business priorities and individual goals.

Offering incentives

While many businesses are taking internal steps to help shift the needle on the current skills crisis, there is more to be done at a government level.

Rising inflation, higher National Insurance contributions and other increasing expenses amidst the cost-of-living crisis are all taking their toll. As a result, there is a risk that investment into L&D will fall by the wayside. 

Greater government incentives to support skill development would be one effective way to ensure this doesn’t happen. In fact, the Institute of Directors recently called on the UK government to offer businesses a tax “super-deduction” for their investment into retraining staff where skills shortages exist. This would provide businesses with a lifeline for talent retention, while paying dividends for the UK economy, through increased productivity.

Closing the skills gap and prioritising the ‘levelling-up’ of the talent pool in the UK will be critical for businesses to remain competitive. However, in the face of many other challenges, internal upskilling programmes alone may not be enough. With the addition of government support, organisations would be able to invest more money and time into learning and development, ensuring that ever-evolving digital transformation efforts are a success.

Sean Farrington is the Executive Vice President of EMEA at Pluralsight. He has more than 17 years of international sales experience and oversees the strategic direction, expansion, and operation of commercial and enterprise sales. In this role, he builds and leads a team of sales professionals both on the ground in Pluralsight's Dublin office and throughout Europe, the Middle East, India, and Africa.