Why is the UK facing a skills shortage?

·Writer, Yahoo Finance UK
·4-min read
Britain's Chancellor of the Exchequer Rishi Sunak gestures on the first day of the G7 Finance Ministers Meeting at Lancaster House in London on June 4, 2021. - Group of Seven (G7) finance chiefs gather this week to hammer out an agreement on corporate tax harmonisation aimed at raising revenues as economies recover from the coronavirus pandemic. (Photo by Stefan Rousseau / POOL / AFP) (Photo by STEFAN ROUSSEAU/POOL/AFP via Getty Images)
The Treasury has recommended a push to get people reskilled in a post-COVID era. Photo: Stefan Rousseau / POOL / AFP) (Photo by STEFAN ROUSSEAU/POOL/AFP via Getty Images

Job vacancies in the UK are on the rise, but there are not enough workers with the right skills to fill them. According to a report by the City & Guilds Group, 56% of organisations face some kind of barrier to meeting their skills and talent needs when recruiting.

Of those surveyed, 28% cited a mismatch between the skills they need, and the skills people gain through school and education as a barrier.

Meanwhile, three in five working age adults don’t feel they’re equipped with all the skills they need over the next five years. But why is there a growing skills shortage in the UK - and how do we address it?

“There are a myriad of factors at play that are causing skills shortages. And while some of these are long-standing – after all, skills shortages are nothing new – some have emerged, or accelerated since the pandemic,” says Kirstie Donnelly, CEO of City & Guilds Group.

“One key area to consider is how businesses are changing the way they operate, and how, as a result, the skillsets they need to operate are also changing,” she explains. “For instance, growing digital transformation and automation had already caused businesses to shift strategies and ways of working over the past years, but these trends have skyrocketed since the pandemic as more shopping, education, and work has moved online.

“And this has left businesses scrambling to hire people with specific digital skillsets, such as cybersecurity or programming.”

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The pandemic prompted demand for skills to soar in key areas. As healthcare, sanitation and hygiene came to the fore due to the pandemic, job postings in health and social care increased by a fifth from April 2020 to April 2021, with demand for nurses (up 328%), physician assistants (up 275%) and caregivers (up 246%) seeing the greatest growth.

Meanwhile, with Brexit now a done deal, certain industries – such as construction, hospitality and social care – are suffering from a shortage of European workers. And this comes as major construction projects kick off, restaurants reopen, and the UK population ages, exacerbating skills shortages.

“Ultimately, the skills businesses need and are looking to hire are evolving really quickly, but the pipeline and development of these skills isn’t keeping up,” Donnelly says. “Outdated mindsets have a role to play here – many people are still of the opinion that once you’ve left school, college or university, you should be set for the rest of your career.

“But the speed of change is so fast that this isn’t enough anymore - recent data by the World Economic Forum showed that by 2025, 44% of skills that employees need to perform in their role will change. We now need to reskill and upskill throughout our careers so that our skillsets remain relevant.”

Education is another key factor. Put simply, we’re not providing young people with all the information and guidance they need when they’re at school. We place a lot of emphasis on university education, but there are many other valuable vocational and technical training routes available that can to lead to a good job and career.

These skills shortages mean that even though many employers will have job vacancies, if their demand fails to match up with job seekers’ skills, they will struggle to fill them.

“Meanwhile, those who are unemployed may not be able to find a job, because those that are being advertised don’t fit their skills and experience,” says Donnelly. “Ultimately, these skills shortages could negatively impact the economy – because businesses can’t be as productive as they’d like to, and because job seekers are unable to get employment that allows them to contribute to the economy.”

According to Donnelly, a more radical approach to lifelong learning is necessary to solve the issue. Government skills funding needs to be channelled to better meet employers’ needs, as well as more flexible, bite-sized learning that supports people to retrain and reskill.

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“This must be supported by better careers advice and guidance, a Government campaign to convince people of the benefits of training throughout their lives, and a switch to digital learning and assessment,” says Donnelly.

Andy Durman, managing director at labour market economists Emsi UK, which carried out the skills research, said we need to rethink skills from the perspectives of people, employers and education providers.

“Not only do we need to help people to understand the skills they possess and those they need to develop, but we also need to help employers understand the skills they need to succeed, and help education providers understand which skills they need to teach to prepare people for a changed labour market,” he says. “Skills are the foundation blocks of our future, so it is time for us to rethink, reimagine and rebuild the labour market upon them.”

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