Solving the UK’s digital skills crisis

Alexia Pedersen at O’Reilly asks how long businesses can ignore their role in closing the digital skills gap

 

There is overwhelming evidence that the UK’s digital skills crisis is worsening. As our latest research shows, the demand for digitally skilled workers in UK vertical industries, including technology, finance, ecommerce and retail, is outgrowing the level of digital skills available.

 

Even though businesses are already suffering from a lack of technical talent, there is a startling lack of urgency to grasp the bull by the horns. While crucial functions such as cyber-security, software architecture and data analysis are heavily under-staffed, there is a huge disparity in the amount organisations are willing to invest in recruitment and upskilling to fill these roles.

 

While the demand for skills in artificial intelligence and machine learning will increase 40% over the next five years, organisations are already in the midst of a crisis which is only set to worsen as the economy continues to plummet.

 

The reality is that to recession-proof the UK’s key industries, businesses need to further invest in learning and development for technology. Crucially, they need to ensure they are investing correctly in critical areas while also recognising that this is a crisis they cannot hire their way out of.

 

Misaligned investment widens the digital gap

The digital skills gap is a pervading issue across industries, yet, only half of companies are willing to spend more than £25,000 on recruitment and learning and development combined to boost the most-needed skills. While 80% of companies within the UK’s tech, finance and retail sectors have increased investment for tech-related L&D over the past three years, investment is still lacking.

 

Reflecting on the most in-demand skills, more than a quarter of the HR decision-makers surveyed said their organisation faces the biggest lack of skilled workers in cyber-security, followed by software architecture and data analysis. Despite this, only a third are willing to spend more than £10,000 on recruitment and L&D to hire cyber-security talent.

 

This low-level investment in cyber-security skills comes as Cyber Minister Julia Lopez recently warned, “It is vital that every organisation take cyber security seriously as more and more business is done online and we live in a time of increasing cyber risk.”

 

Meanwhile, most organisations plan to spend no more than £10,000 on recruitment and L&D for data analysis and software architecture (which follow cyber-security as the most in-demand skills). With data analysis now underpinning innovation across all industries, it is not surprising that this is a core need for businesses.

 

Last year, the Government published its UK Data Skills Gap report, in which it was identified that ‘The supply of graduates with specialist data skills from universities is limited. While many companies undertake to train their own workers internally, half of all workers surveyed reported they had not received any data skills training within the last two years despite considerable interest in undertaking training.’

 

And, with digital channels now driving everything from banking to shopping, the need for software engineers is also clear. A lack of software developers is driving salaries to record levels, while investment in developing internal talent in this area remains strikingly low.

 

So where is investment being made?

 

It seems that organisations are well aware of the transformative nature of AI and machine learning. Almost a third plan to spend up to or more than £20,000 on recruitment for these skills, while more than a quarter will spend the same for upskilling in these areas.

 

While many businesses are already making great use of these next-generation technologies, it seems that the excitement of the ‘new’ may be overshadowing the very real needs right now.

 

While it is encouraging to see investment being made in skills for the future, leaders must not overlook the skills needed now.

 

Recession calls for a skills revolution

With the pound currently at a 37-year low against the dollar, UK businesses are bracing themselves for recession. Those that plan to face this head-on know that they will need to innovate in the face of challenge, and that means a need for talent.

 

For many, the answer to this immediate problem is to hire. The majority (83%) of technology, finance, ecommerce and retail companies plan to spend between £25,000 - £50,000 on recruitment for skilled tech vacancies over the next twelve months.

 

However, we know that the number of technically skilled people businesses need simply do not exist. While the government is investing in the skills pipeline, it is not enough and will come too late. Businesses can’t sit and wait for graduates. There is only one choice, and that is to upskill existing talent.

 

Our research showed the biggest barrier to upskilling current employees for more than two-fifths of organisations is insufficient resources, followed by a lack of internal personnel and a lack of internal buy-in. In the tech sector specifically, 21% of organisations say lack of leadership support is a key barrier to upskilling current employees.

 

UK businesses face huge challenges, including post-pandemic growth, new working norms, attitudinal shifts and sustainability requirements - not to mention the need to prepare for the continued economic downturn. Technology plays into all the major issues that dominate board meetings right now.

 

Companies that invest in digital learning and gain support at the board level will set themselves apart. They deserve to reap the rewards from this investment by catapulting their business to the next level and innovating to stay ahead of the competition.

 

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Alexia Pedersen is VP of EMEA at O’Reilly

 

Main image courtesy of iStockPhoto.com