Gap analysis: the UK skills crisis

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Open University skills gap illustration

How can employers protect themselves against a deepening skills shortage and develop a workforce that’s fit for the future? Director, in association with The Open University, assesses the challenge

The nation is in the grip of a skills shortage that’s costing the private sector an estimated £6.3bn every year, according to The Open University’s 2018 Business Barometer report.

Even though it’s only in its second year, this annual publication is quickly establishing itself as a key indicator of recruitment and retention trends in the UK.

The latest edition, based on a survey of nearly 1,000 businesses in all industries and regions, has made some particularly alarming findings.

First and foremost is that, in a globalised digital economy that rewards innovation and disruption, 91 per cent of the respondents have struggled to recruit and retain people with the skills they require to remain competitive.

The aforementioned £6.3bn represents the extra money that this problem is forcing employers to spend on items such as inflated salaries, temporary freelance cover, additional recruitment costs and training to bring existing employees up to standard.

Incurring such costs means diverting funds away from investments in the vital technology, R&D and innovation that will enable British business to remain competitive on the world stage.

Room at the top

Although business leaders often blame the education system for the problem, The Open University’s report reveals that it’s not the entry-level jobs typically filled by new graduates and school-leavers that are most affected.

Indeed, British businesses are most lacking in sufficiently skilled managers, leaders and technical/IT specialists.

The report paints a picture of an employment landscape in which businesses are struggling to find the right people in the most crucial areas of their organisations.

Yet David Willett, the university’s corporate director, believes that this situation actually presents more of an opportunity than a threat to forward-thinking employers of all sizes.

Speaking at a recent IoD webinar event, he explained: “There are some tremendous opportunities out there for those business leaders who want to develop their workforces.

“At The Open University, for instance, we’ve been working with a range of companies – from micro-businesses to most of the FTSE 100 – to find unique solutions to their specific recruitment and retention needs in the medium and long term.”

Willett reported that the university was helping employees at these organisations by offering them “a range of free learning tools at one end of the spectrum” all the way up to degree courses at bachelor’s and master’s levels.

These were providing “multiple benefits for their employers”, including improved performance, productivity and staff retention, he said, adding that the innovative learning methods that modern providers can offer today has eliminated a number of the disadvantages that employers associate with traditional training courses.

“Tech-based learning means that employees can undergo training without leaving their workplace to attend lectures or seminars, as was once the case,” he said.

“That removes one of employers’ traditional objections to providing education and training – that an employee would be off site and unproductive for days or weeks at a time – because that is simply not the case any more.

“For example, of the 170,000 students we have at present more than three-quarters are in work, so we have designed learning to suit that. We can also tailor our training to a particular employer’s needs.

“We have worked closely with Cisco Systems in recent months to integrate our programmes, for instance, and we’re working with the likes of Microsoft and Amazon on similar projects.”

Payback time

Given that the government is striving to solve the skills crisis through workplace learning schemes, among other policies, Willett thinks the right infrastructure is now in place for companies to take more responsibility for employee development and, by extension, their own destiny.

“Every investment for any business, large or small, is important. Training, like any aspect of business, has to demonstrate a return on investment, but the help available to employers through things such as the apprenticeship levy means that its cost has decreased markedly.

“If we look at the degree apprenticeship programme, for example, the government will fund up to 90 per cent of the cost,” he said. “The range of solutions is now so broad that no business should have cause to neglect training. Those that invest stand to gain so much more than those that don’t.”

DAVID WILLETT is corporate director at The Open University, having joined in 2016 as its head of propositions. He is responsible for identifying, establishing and developing joint ventures and other commercial partnerships worldwide.

Willett was previously director of education and talent at Global Knowledge UK, a provider of training in IT and business skills. He is a product of work-based learning himself, having completed an electrical engineering apprenticeship before moving into the learning and development field.

For more information and to download a free copy of the 2018 Business Barometer report, visit open.ac.uk/business

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