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Skills Gap Statistics UK 2023

Skills Gap uk 2023 digital

Companies in the UK have seen a big increase in digitalisation of the workplace across a range of industries. Over half of organisations agree that digital technology has become increasingly important in the last 5 years.[1] But many are still struggling to find employees with the right skills to fill their vacancies.

We’ve analysed the latest reports, data and skills gap statistics in the UK to see how it’s affecting businesses and workers.

Key Statistics

  • An estimated 20% of the workforce in the UK will be significantly underskilled for their jobs by 2030. This could amount to around 6.5 million people.
  • 27% of UK workers say that they lack the sufficient digital skills required for their job role.
  • Almost three in five workers (58%) say their employer has never provided them with training to improve their digital skills.
  • In the UK, 58% of workers say that lacking digital skills has affected them negatively in the workplace.
  • Two-thirds (66%) of large UK businesses said they struggle to recruit employees with the skills they need.
  • 88% of young people (aged 16-24) think that digital skills will be essential to their careers.
  • The UK government lists engineering, software development, and architecture among some of the most in-demand skills.
  • 92% of businesses say that having a basic level of digital skills is important for their employees.

What is the UK skills gap?

The skills gap is the difference between the knowledge and skills required to complete a particular job, and the skills an employee or candidate actually has. This skill gap might mean the employee cannot complete the tasks associated with the job they are currently working at or are applying for.

Research suggests that around 40% of current workers in the UK don’t have the right qualifications for their job, either being underqualified or overqualified. As well as this, an estimated 20% of the workforce will be significantly underskilled for their jobs by 2030. This could amount to around 6.5 million people.[2]

Data from the Office for National Statistics revealed that the number of job vacancies between February and April 2022 rose to a record high of 1.29 million.[3]

Why is there a skills gap?

There are a number of reasons why a skills gap currently exists in the UK. Some of these include:

  • Increased digitalisation – With more and more businesses taking a digital approach to their day-to-day tasks, workers who lack the skills to use new technology are being left behind.
  • Brexit – When the UK left the EU, it caused a number of European workers to return to other EU countries, leaving a labour shortage in industries such as hospitality, healthcare and corporate support services.[4]
  • Covid-19 – Many people lost their jobs during the pandemic, and there was a shift to digitisation with remote working. In addition to this, many employers prioritised the survival of the business over training and helping staff develop new skills.[5]
  • Inequality – When it comes to a digital skills gap, young people from low socioeconomic backgrounds are at a disadvantage. This is due to a lack of access to the internet and electronic devices, making it more difficult for them to develop digital skills.[6]

Industries affected by a gap in skills

There are a number of sectors in the UK that have experienced problems with their workforce not having the skills required to carry out changing work tasks.[7]

Some of the industries dealing with the current skills gap in the UK include:

Manufacturing

In the manufacturing sector, 80% of employers say they are struggling to find people with the right skills to fill their job openings. [8] There has been an increase in the need for people with skills in automation, robotics, and IoT (Internet of Things), with many current and experienced manufacturing workers not seeing the benefit of learning these skills.

Software

Our need for effective technology and software increased massively during the pandemic, with more and more companies relying on a variety of online services to complete daily tasks. Software development was one of the top three most desired skills of 2020, and the demand for skilled software workers is moving faster than the supply.

Business and finance

Some of the main skills lacking in the business and finance world include management of stakeholders, commercial aptitude and influencing others. More than 60% of Chief Financial Officers (CFOs) say they have found it difficult to recruit people with the necessary skills for their vacancies.

Engineering

The advancement of technology and the fact that 20% of the current engineering workforce is set to retire by 2026 creates a significant skill and experience gap in engineering.[9] To address this skills shortage, Engineering UK estimates that 186,000 engineers will be needed every year until 2024. This is a huge number of new workers needed to fill the gap in the engineering industry.

Digital

While tech and online-based roles are experiencing a skills shortage themselves, digital skills are required across pretty much all industries today. There are over 170,000 tech jobs per month advertised in the UK but many students who leave education do not have sufficient skills or knowledge to apply for these jobs. Six in ten (60%) of employers say they are facing an increase in their reliance on advanced digital skills.

How are businesses being affected by the skills gap?

Roles in certain professions are proving difficult for companies to fill. Being unable to find employees with the right skills can affect businesses in a number of ways. Some of the effects may include:

  • Poor work quality
  • Greater employee turnover
  • Reduction in productivity
  • Loss of revenue
  • Inability to expand the business
  • Low morale among staff
  • Competitors can gain an advantage

When companies are unable to fill jobs with skilled workers, this may also impact their ability to serve their customers adequately, creating further knock-on effects.

Almost three-quarters (72%) of organisations say that a skills shortage has led to an increased workload for other staff, and 78% say they are experiencing reduced output and profitability as a result.[8]

Recruiting skilled employees

One report from 2022 found that two-thirds (66%) of large businesses said they would struggle to recruit employees with the skills they need. This was also broken down into specific sectors with 63% for education, 52% for manufacturing, and 52% for leisure and hospitality companies.

Percentage of businesses struggling to find the skills they need

Source [10]

Which skills are most in demand in the UK?

The UK Government keeps a list of shortage occupations that are most in need of skilled workers. This list relates to skills that can qualify someone for a Skilled Worker visa if they are looking to move to the UK. But it highlights the types of workers who are needed in industries across the UK.

Some of these in-demand skills include:

  • Engineering including civil, mechanical, electrical, design and development
  • Programming and software development
  • IT and communications, IT business analysis and system design
  • Architecture
  • Chemical scientists in the nuclear industry
  • Veterinarians
  • Graphic design and web design
  • Care work and home care
  • Actuaries, economists and statisticians
  • Laboratory technicians
  • Artists

Digital and technology skills gap statistics

The digital skills gap is a key part of the problem in the UK as job roles are becoming increasingly dependent on digital technology. When it comes to filling roles, 82% of job descriptions in the UK list digital or technology skills as a requirement.[11]

Data shows that over a quarter (27%) of UK workers say that they lack the sufficient digital skills required for their job role. As well as this, 29% said their lack of digital skills had limited their pay, promotions and career progression.

More than half of workers (58%) say their employer has never given them any sort of training to help close the technology skills gap.[12]

This is despite the fact that 92% of businesses in the UK say that having a basic level of digital skills is important for their employees. Just over three-quarters (76%) of businesses also said that their employees having a lack of digital skills would affect the profitability of the business.

Clearly, there is more that needs to be done by employers to ensure that their workers have the necessary skills to complete digital tasks.[6]

How people view digital skills

The way we think of digital skills might vary depending on the industry we work in or the experience we have. Almost half (47%) of the respondents said that ‘digital skills’ means coding, programming and building websites or apps. Other popular descriptions were using hardware like computers and laptops (43%), using desktop apps (43%), and using communication apps (39%).

Descriptions people think describe digital skills 2

Source [12]

More than a third of workers (35%) said that digital skills meant fixing IT issues, and 29% of knowledge workers (people who handle or use information as part of their job role) said that was the skill they thought they could benefit most from improving.

Young people (aged 16-24) who have grown up in a digital world see these skills as vital with 88% saying digital skills will be essential for their careers, and 70% saying they want an employer who invests in their skills. As well as this, 96% of people in this age group feel that they have the basic digital skills that employers need, and 62% think they have the advanced digital skills employers need.[6]

How a lack of digital skills negatively impacts workers

Workers in the UK have experienced a number of negative effects due to having a lack of digital skills in their workplaces, with 58% saying this has affected them negatively in some way.

Just over a quarter (26%) said they didn’t receive a promotion because of their lack of skills, while 20% said it stopped them from applying for a new job. Other negative impacts mentioned by workers included having to change careers (11%), missing out on pay rises (10%), and having to leave their job altogether (8%).

Negative impact of skills gap on workers

Source [12]

More digital skills gap statistics

  • Research shows that 244,000 businesses in the UK (88% of all businesses) said that they lacked at least one area of digital skills in their staff.
  • Almost 7 in 10 (69%) of business leaders surveyed in 2020 believed that they had a skills gap among their staff.
  • When asked about the degree of the digital skills gap among their workforce, 23% of employers said they had a gap in basic digital skills, and 37% said they had a lack of advanced digital skills.
  • 21% of young people in lower socio-economic groups lacked access to a desktop computer, laptop or tablet.[6]

How employers contribute to the skills gap

Data shows that senior decision-makers and those in high-level executive roles are not aligned on the qualities they think are important and the qualities they actively look for in employees.

Although 92% of hiring managers said that influencing and inspiring people was an important quality, only 33% of them actively looked for this during their hiring process.

Another quality highlighted by senior decision-makers was understanding customers and doing what is best for them, with 92% saying this was important for team members. However, only half (50%) said they specifically look for people with this quality when hiring.

Qualities employers look for in employees

Source [12]

This suggests that some employers need to adjust their hiring process to ensure that they are actively looking for people with the skills they define as important to their business. This should help reduce employee turnover and ensure that decision-makers are clear on their expectations for their workers.

How employers assess skills and employees’ requirements

Employers in the UK were asked how, if at all, they currently assess the skills and requirements of their staff.8 Their responses were:

  • 58% said they consult with their staff directly.
  • 28% benchmark skills against other workers or external data.
  • Just over a quarter (26%) consult with HR or recruitment agencies.
  • 18% use a structured analysis or audit.
  • Another 18% said they consult with Universities or other educational institutions.
  • One in ten (10%) consult with other companies or organisations in their supply chain.
  • 16% of employers said their company does not assess skills requirements at all.

How employers deal with digital skills gaps

When it comes to resolving the problem of a skills gap in the workplace, employers took a number of measures. Most (47%) said they provided on-the-job digital skills training to their staff, while a third (33%) said they recruited new workers to fill the gap.

Others said they provided digital training outside of work (23%), or engaged with local training providers to identify the skills they were missing (16%).  11% of employers said they took no action to rectify the lack of technology-related skills at their company.

How employers tackle digital skills gaps

Source [6]

Improving people’s skills

With 58% of workers saying their employer has never given them the opportunity to improve their digital skills, some will look to develop their skills outside of work. There are a number of online courses available for people who want to develop new skills at any stage of their career.

Here are some of the courses available to those who want to learn something new:

Summary

While the UK skills gap is affecting many industries across the country, the digital and technology skills gap is set to impact almost every sector. Many workers are keen to improve their skills, but it appears more needs to be done by employers to help upskill their existing staff and ensure the gap doesn’t widen.

References

  1. Amazon – Digital Transformation Could Grow the UK Economy by Over 413 Billion by 2030 – https://www.aboutamazon.co.uk/news/aws/digital-transformation-could-grow-the-uk-economy-by-over-413-billion-by-2030
  2. Industrial Strategy Council – Skills Mismatch 2030 – https://industrialstrategycouncil.org/sites/default/files/UK%20Skills%20Mismatch%202030%20-%20Research%20Paper.pdf
  3. ONS – Job Vacancies in the UK – https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/jobsandvacanciesintheuk/may2022
  4. Migration Observatory – End of Free Movement Affecting the Low Wage Labour Force in the UK – https://migrationobservatory.ox.ac.uk/resources/reports/how-is-the-end-of-free-movement-affecting-the-low-wage-labour-force-in-the-uk/
  5. Avado Learning – Bridging the Skills Gap for UK Businesses –  https://www.avadolearning.com/press/beyond-skills-capabilities-could-bridge-the-skills-gap-for-uk-business/
  6. World Skills – Disconnected Report – https://www.worldskillsuk.org/wp-content/uploads/2021/03/Disconnected-Report-final.pdf
  7. Iungo Solutions – 7 Industries Addressing the Skills Gap – https://iungo.solutions/7-industries-looking-to-address-the-skills-gap/
  8. British Chambers – Business Barometer Report – https://www.britishchambers.org.uk/media/get/The%20Open%20University%20Business%20Barometer%202022%20report.pdf
  9. Engineering Construction Industry Training Board – https://committees.parliament.uk/writtenevidence/111345/pdf/
  10. Monster – Flexible Future UK Hiring – https://www.monster.co.uk/advertise-a-job/resources/market-intelligence/ebooks-reports/flexible-future-uk-hiring-outlook-2022/
  11. UK Gov – Employer Demand for Digital Skills – https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/807830/No_Longer_Optional_Employer_Demand_for_Digital_Skills.pdf
  12. AND Digital – Skills Gap Report – https://www.and.digital/