For years, the UK has managed its digital skills gap by attracting foreign talent to work in skilled jobs, and by promoting the development of tech skills among young people. While this has worked to an extent, the skills gap has continued to grow. According to a new report by Accenture, the UK may miss out on as much as £141.5 billion in GDP growth over the next 10 years. This trend is mirrored in other G20 countries, with many facing even greater potential economic repercussions. Unlike these, however, the UK faces the additional threat of Brexit.
With record numbers of skilled foreign workers leaving the country, competition for talent among businesses is likely to become increasingly fierce. In the past, this would be moderated almost immediately by an influx of skilled EU workers, who could easily and quickly respond to attractive wage incentives. Going forward, however, this is likely to become much more difficult, slowing the growth of businesses dependent on these skills, and even giving them incentive to move.
Traditional education is too slow to be effective
The UK has some of the best universities in the world, and practically all young UK citizens develop digital skills to some extent. Unfortunately, however, many of these simply aren’t sufficient to serve the needs of UK tech businesses. The problem is, in large part, that technology, and the needs of the businesses that depend on it, is advancing more rapidly than the labour market or the education system. According to the World Economic Forum, approximately 65 percent of today’s children will grow up to work in jobs that haven’t even been invented yet.
In light of this, it’s clear that simply updating school and university curricula is not an effective solution. Rather, even workers with very solid digital skills should expect to update or acquire entirely new skill sets multiple times throughout their careers. While younger workers are increasingly comfortable with this new reality, older, pre-digital generations are not likely to adapt to fill these roles.
How businesses are dealing with the problem
Businesses, responding to market pressures, have come up with their own solutions to the talent shortage. Increasingly, tech companies are turning to the Internet to hire remote employees or contractors in the EU or US to fill problematic roles. While this is an elegant solution for businesses, it’s not ideal for the UK as a country. Unlike talent that is brought into the country, these workers don’t pay taxes to the UK. Worse, businesses who increasingly find themselves looking elsewhere for their workers may eventually choose to move their headquarters entirely.
In the long run, it’s unclear what impacts this could have on the country as a whole. Businesses, however, may breathe a little bit easier knowing that they’re not entirely out of options. Moreover, it’s likely that the UK government will take action to address the issue in such a way as to provide the necessary talent within the UK, in order to protect the country’s interests.
Preparing for a digital future
Going forward, business leaders need to educate themselves about the future of the labour market as it pertains to their needs, and take steps to prepare. As the demand for digital skills continues to grow, they’ll need to find new ways to access the talent they need in order to manage the accompanying rise in cost.
Hire self starters
Traditionally, the most important aspect of any job candidate has been their current qualifications and experience. Going forward, it will be increasingly important, however, to emphasise independent thinking, creativity, and self motivation. Because the education system won’t simply supply the talent businesses need, businesses need workers who will independently acquire the skills they need as they go
Promote constant learning
Even skilled employees can no longer expect to apply their current skill sets throughout their careers, because the businesses that employ them won’t be able to compete and grow if they don’t keep up with, and adapt to, the latest technological solutions in their industry. In order to keep up, businesses need to drive and shape the development of their employees through training programs and incentives.
Focus on retention
The larger the skills gap grows, the more difficult it will be to find new employees, and to hold on to existing talent. Competing businesses that can’t find available workers will increasingly attempt to attract talent from their competitors, or even partner businesses. To avoid losing critical employees, businesses will need to work harder than ever to develop company loyalty, and a healthy, attractive work environment.
Regardless of how the larger situation develops going forward, businesses will adapt and contribute to improving the issue through market pressures. It remains to be seen, however, what the resulting effects on UK businesses and the UK economy will be. For business owners, the impacts will depend very much on how well they are prepared to adapt to the changing environment.