We’re moving in the right direction with the skills crisis, but this is not a panacea

On Wednesday, the government used the Autumn budget to announce a swathe of new investment in skills and education to help Brits find higher paid jobs. By seeking to create opportunities for people wishing to enter high value sectors, the government is sticking to its mission of creating a “high wage, high skill, high productivity economy”.

For many business and HR leaders, this news is a welcome boost. As we all know, talent is in short supply, particularly for sectors that have seen digitisation plans fast-tracked throughout the Covid-19 pandemic.

However, as with any new and comprehensive cash injection, the devil will be in the detail, and there is a danger that continuing to back some of the same initiatives, which are already struggling to deliver the scale of change needed, may result in our inability to compete in the Fourth Industrial Revolution.

Where is investment being directed?

Skills and education have strongly climbed up the government’s agenda in recent years. Continuing this trend, this year’s Autumn budget has seen a pledge of £3 billion going into training and education, and will be directed into the following areas:

  •  The National Skills Fund will be boosted with a total investment of £550 million to quadruple the number of places on skills boot camps, which are available for adults of any age, covering areas such as artificial intelligence, cybersecurity, and nuclear.
  • A further £1.6 billion will provide up to 100,000 T-Levels students aged between 16 and 19 studying with additional classroom hours, along with another 24,000 traineeships being created.
  • As for apprenticeships, funding will increase by £170 million, reaching £2.7 billion in 2024/25.

Reacting to the planned spending, earlier this week Chancellor of the Exchequer Rishi Sunak said: “Our future economic success depends not just on the education we give to our children but the lifelong learning we offer to adults. This £3 billion skills revolution builds on our Plan for Jobs and will spread opportunity across the UK by transforming post-16 education – giving people the skills they need to earn more and get on in life.” This focus on the huge reskilling challenge facing adult workers is to be applauded.

Should more funding go to apprenticeships?

While the continued investment into education and skills is hugely welcome, there is a risk that initiatives that are failing to deliver the scale of change needed are being backed at the expense of newer initiatives that reflect the way adult education needs to operate in the future. One such area that falls into this category is apprenticeships.

By offering the opportunity to combine working with studying to gain skills and knowledge in a specific job, apprenticeships have forged new opportunities for people to enter the workforce. They have also gained significant political support in recent years, with the UK government introducing an apprenticeships levy in 2017, forcing businesses with payrolls of more than £3 million to reserve 5 percent of wage costs for training in the workplace.

However, the challenge is that apprenticeships only address a limited segment of learners, which restricts the impact any increased funding can have in addressing the short-term skills gaps. They do not currently speak to the majority of people that either need to transition into the tech industry from declining occupations, or those that want to develop new technical skills to better perform in existing roles that have undergone digital transformation.

Crucially, the problem of increasing the supply of tech talent through apprenticeships is that it draws mostly on school leavers, who have recently been opting out of IT subjects. According to The Learning & Work Institute, the number of young people taking IT subjects at GCSE has dropped 40% since 2015, with school students showing a lack of interest and understanding about digital career paths. The government needs to invest further upstream in schools to address this worrying trend.

A cause for optimism

The previous emphasis on apprenticeships is arguably what has left the UK tech industry with a 77,000 staff shortfall and why businesses and HR leaders are struggling with digital transformation efforts. Yet, there is cause for optimism in this recent budget.

The size of the challenge ahead of all of us when it comes to developing the skills and talent we need to boost growth demands a scalable response. Encouragingly, the significant influx in funding for The National Skills Fund is a welcome change in stance from the government, as it indicates they are beginning to recognise the role of shorter, more agile forms of learning to plug gaps in the economy at scale. Their approach is a sensible effort to address the two major barriers to training among adult workers: cost and time.

This is particularly important considering that one in four over 45s are now thinking about switching careers, and catering to this demographic will be critical for businesses and HR leaders to meet their demand for talent, particularly those related to high-growth technology roles.

While the success of The National Skills Fund and boot camps are not guaranteed and much will be dependent on how well programmes are designed to develop both the key technical and human skills necessary for job success, those businesses, HR leaders and recruiters that are looking to plug talent gaps quickly as they navigate the digital economy should welcome this news.

More investment is still required

However, the government mustn’t stop there in its continued endeavour to prepare businesses and the economy for the Fourth Industrial Revolution. It needs to redouble its efforts to transform engagement with digital careers within the secondary school system if we are to inspire a growing pipeline of fresh talent that businesses and HR leaders can utilise in the future.

But they must also think about the infrastructure to credentialise the learning of people reskilling on boot camps and shorter learning programmes. Ensuring these programmes deliver quality learning experiences that provide consistent value to employers and HR leaders, and offer people verifiable skills will be essential to lay the foundations of a more adaptable workforce for the future.