The UK has been lagging behind other members of the G7 when it comes to productivity – and skills, or lack thereof, play a significant role in this. However, with uncertainty surrounding the post-Brexit employment landscape and widespread digital disruption, the severity of the skills gap has actually increased over the past year, with more organisations reporting that they are currently experiencing a skills shortage.
The Open University Business Barometer, now in its third year, investigates the attitudes of employers towards staff recruitment and retention, highlighting the skills gaps faced by organisations and the steps being taken to address them.
This year's report shows that employers are spending £4.4bn a year to recruit workers with the skills they need – down from £6.3bn in 2018. However, this falling cost doesn’t necessarily reflect a closing skills gap, but a potential shift in gear by many employers, with more than half looking to adopt a ‘grow your own’ approach to securing talent. Indeed, ‘upskilling’ is the watchword for employers in 2019, as they systematically increase the amount they invest in education and training.
The UK government, which put skills at the heart of its industrial strategy, strongly supports this move – and is working to encourage employers to focus on a more sustainable approach to the skills shortage with a long-term goal of boosting productivity. At the centre of its strategy has been a commitment to apprenticeships, with discussions around how to promote work-based learning and ultimately catalyse a culture of lifelong learning, where employees develop their skills and retrain throughout their careers, with similar initiatives in place in Scotland, Wales and Northern Ireland.
Our barometer shows that this may be paying off, as businesses have started to change their approach to addressing the skills shortage. More than half (53 per cent) have increased their training and development budget in the past year – by an average of 10 per cent – and more than a third of organisations in the UK are now employing apprentices, which shows a fresh commitment to increasing skills within the current workforce.
In order for this positive change to continue though, the training and education in which employers invest must deliver results. It is not enough to simply provide the skills required; employees at all levels must be able to apply their knowledge to solve problems, making their organisations more agile and able to manage change. This is why higher and degree-level skills should be an essential part of any employer’s skills strategy.
At the same time, with productivity already affected, training must complement organisations' day-to-day operations. With new technology-enabled learning, like that provided by The Open University, employees can learn how, when and where they like, which means that education can flex around existing work and personal commitments.
So, to confidently and effectively navigate upcoming change, organisations must focus their investment on a long-term training strategy that delivers quality and flexibility. Skills do not have to be bought, they can be built, and, by upskilling and retraining the current workforce, businesses will have all the skills they require along with the knowledge and experience to drive them forward.
David Willett is corporate director at The Open University