Essential skills for a changing workforce: What the further education sector needs to know about the NFER’s new landmark report

With nearly one million young people currently not in education, employment or training, a rapidly evolving labour market, and employers voicing growing concerns about the preparedness of new entrants to the workforce, there is a need for fresh evidence to help reshape education and training policy.

The publication today of the National Foundation for Educational Research’s (NFER) final report from its five-year The Skills Imperative 2035 research could not be better timed, and there is plenty in the findings for the FE sector to draw on as the government grapples with the challenge of equipping young people, adult learners, and career-changers with the skills they need to thrive in the future world of work.

A strategic investment in skills research

Funded by the Nuffield Foundation – with its most significant ever investment in education research – The Skills Imperative focuses on the skills needed for the jobs of tomorrow, and what this means for policymakers, the education and training system, employers, and workers themselves.

The report’s central premise is clear: as automation and AI become more embedded in the workplace, up to three million jobs are at risk in low- and mid-skilled occupations such as administrative, secretarial, customer service, and machine operations by 2035. For those that remain, the nature of work will shift for many roles, which will require not just technical proficiency but a broader set of transferable, or “essential employment skills” (EES).

NFER identify these as information literacy, problem-solving and decision-making, communication, collaboration, organising, planning and prioritising, and creative thinking. These are skills once dismissed as “soft” and incorrectly seen as innate, rather than amenable to being nurtured through education, training, and experience of work.

But while they are now recognised as being critical to employability, the report also warns of growing shortages in EES which are likely to worsen without action. It estimates that by 2035, seven million people will lack the EES they need for their job. These accelerating shifts risk deepening inequalities and constraining economic growth if left unchecked.

A timely report

The Skills Imperative lands at a moment of intense policy interest. Over the past 18 months, the Westminster government has launched a range of reforms aimed at tackling long-standing mismatches between education and employment. These include the creation of Skills England, the transfer of responsibility for adult skills and apprenticeships to the Department for Work and Pensions, and new qualifications such as V Levels, which sit alongside T Levels and Higher Technical Qualifications, all supported by a Youth Guarantee and a Lifelong Learning Entitlement. The Department for Education retains oversight of higher education and training for under-19s.

In addition, the government’s 2025 industrial strategy places technical excellence and workforce development at its heart, with targeted investment in sectors like technology, engineering, and defence.

Understanding essential employment skills

So where do EES fit into this landscape? The Skills Imperative has significantly advanced our understanding of EES and how to value, develop, and support them. Through a structured, data-driven research programme, it projected future skills demand in a technology-driven labour market, identified the most critical skills, assessed supply and gaps across different groups, and examined the factors shaping young people’s skill development. It also highlighted implications for education and lifelong learning, and drew lessons from high-performing countries.

FE’s role in delivering essential employment skills 

Skills policy is a cornerstone of a fair, prosperous and inclusive society. Ensuring that all young people leave education with a strong set of EES alongside literacy, numeracy, and technical skills is increasingly vital to help them navigate the rapid deployment of new technologies reshaping the nature of work, including the opportunities and risks posed by AI.

But research carried out with curriculum leaders suggests that colleges, like schools, vary in the emphasis they place on EES. A recurring concern was that these skills are often marginalised in content-heavy courses, leaving students underprepared for the workplace. As one college leader said: “We have students going to employers with qualifications that everyone has, and we’re finding the employers want them to have skills they don’t have.” Curriculum leaders also highlighted the need for clearer guidance on which skills to prioritise, how to track progress, and how to measure impact.

To address these challenges, the report recommends that government policy should strengthen incentives for post-16 providers and universities to embed EES development into their programmes. This could include changes to funding and accountability measures that recognise providers’ efforts to build students’ employability. Alongside this, practical tools for assessing EES would help educators identify gaps and tailor support more effectively. The report also says that students themselves need to understand the value of these skills and be able to articulate them confidently, supported by a common skills framework.

The adult skills system also needs to be reinvigorated, including through a step change in funding, to promote and reduce the barriers to adults retraining and transitioning from declining occupations into growth sectors.

Influencing policy and practice

The Skills Imperative 2035 complements other wide-ranging research initiatives funded by the Nuffield Foundation, including the Pissarides Review into the Future of Work and Well-being, the Resolution Foundation’s Economy 2030 Inquiry, and the IFS Deaton Review of Inequalities. Together with the wealth of projects we have funded on more focussed aspects of the system, these projects form a powerful evidence base for shaping the future of education, training, and employment in the UK.

The full NFER report is essential reading for anyone involved in post-14 education and training, providing a comprehensive analysis of the challenges ahead but also ideas for creating a system of lifelong learning that contributes to increased productivity, a more inclusive approach to workforce development, and ultimately economic growth.

By Josh Hillman, Director of Education, The Nuffield Foundation