Laurie Miles: The UK skills shortage is a ticking time bomb, but it can be disarmed

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After only several weeks into 2014 it seems like the grey economic cloud that has remained stubbornly over the UK for the past five years is finally beginning to lift. While newspapers and economists talk of growth and investor confidence, to the vast majority of people there is only one statistic that really matters: job growth. According to the UK Commission for Employment and Skills, the number of job vacancies has finally risen back to pre-2008 levels.

But this seemingly rosy statistic hides a rather thorny truth. Many of these job vacancies exist because much of the UK population lacks the skills to fill them. One of the ways to tackle this shortage is a higher level of collaboration between employers and schools/universities. The industrial landscape can change in a decade, while curriculums rarely maintain pace.

For example, for the past two decades there has been a long term decline in the popularity of the subjects that teach the type of analytical thinking necessary for big data analysis: Mathematics, Computer Science and other technology and engineering-related subjects. This trend is only just beginning to reverse.

ICT in schools is still mostly restricted to office applications. But we’re no longer in the 1990s where computers are only used for creating documents and spreadsheets. Instead computers, and the accompanying software, are used to deduce, predict, analyse and inform. Industries suffering a chronic skills shortage should be working closely with schools and universities to help educate students in the skills that are currently needed and increasingly in demand over the next five years.

However the burden cannot be entirely shouldered by the education system. The decrease in the amount of money spent by employers on staff training is a worrying statistic. A business cannot expect to get the most out of its workforce without an element of investment in skills. To some degree, all new workers entering the job market will need to be moulded into a new role.

This reluctance to train may explain why only a minority of businesses are prepared to give school leavers or graduates their first job: the lack of experience means that a greater level of investment is required. Unfortunately this can start a cycle of decline in which graduates and school leavers are continually denied the opportunity to learn the necessary skills to advance in the workplace, and so remain permanently unattractive to employers.

One of the skills that is becoming ever more important for education leavers to learn is the ability to handle and analyse data. As our world has become more connected and our ability to store data has grown, the amount of data created each day has reached 2.5 quintillion bytes. It is hard enough to picture the number itself, let alone the volume of data it represents.

Unsurprisingly there is a huge demand for people who can find the all-important needle within this mountainous and ever-growing haystack. According to the Centre for Economics and Business Research, insight gained from big data could contribute £216 billion to the UK economy by 2017. While general IT jobs are expected to grow 2.5 per cent per annum in the next five years, the number of big data specialists needed by 2017 is expected to grow by 243 per cent – highlighting the need for people to be more skilled in this area.

But unfortunately data science and data management is also one of the areas that suffers from an acute shortage of skills. The Economist Intelligence Unit found that 47 per cent of organisations listed the lack of necessary skills to be the biggest barrier to unlocking the value of data. Our own research with e-skills UK found that three out of five large UK organisations find it challenging to hire staff with this expertise.

To tackle these skills shortages, companies need to be more proactive in their relationships with educational institutions. How are they supposed to fill their roles in the future if they’re not helping to shape that future now? Companies need to be thinking about these partnerships as more of an investment that undoubtedly will pay off in the near future. The UK Government’s report, Seizing the data opportunity, states: “It is important that industry and universities continue to work together to ensure that graduates leave university with the skills that the industry needs.”

To help equip the next generation with the skills needed, SAS launched its Student Academy programme in 2012, which allows UK students to learn employable data-related skills and already has 16 universities involved across the UK with more expected to follow.  This is in conjunction with over 50 specialist postgraduate degrees.  These programmes must be seen as investments to not just ensure business continuity, but also that advancements continue to be made.

Within the narrative of the skills shortage, the employee is often portrayed as the primary victim. However, in the long term we risk employers feeling the pain, as they fight over the few qualified individuals available and risk going out of business altogether.

By Laurie Miles, Head of Analytics, SAS UK & Ireland

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