The Future of AI and Skills: An Industry Perspective

In this exclusive feature Alison Morris, Director of Policy at Skills Federation brings together member organisations Jake Wall, Policy Manager at techUK, Claire Tunley, Chief Executive of Financial Services Skills Commission and Lee Higgins, Sector Intelligence Manager at Enginuity to explore what AI means for the future of work, training and the wider skills system.

How AI is reshaping roles

Alison: AI is actively reshaping industries, with businesses responding at pace to a rapidly changing landscape. What changes to roles or workflows are you seeing in your sector?

Claire: Generative AI is automating routine tasks across the financial services sector – things  like summarising documents, analysing data and information and scheduling. That’s freeing up time for people to focus on more complex, creative and interpersonal work. 

We’re already seeing an impact in customer services and analytical roles, where AI is improving efficiency, and more importantly, customer outcomes.

Jake: Across UK tech businesses, more routine work is being automated or heavily augmented.

We are seeing a shift from people doing every task manually to working with, overseeing and orchestrating AI outputs. The pattern is similar – from customer operations and HR to cybersecurity roles, workers are working collaboratively with AI, using their insight and domain knowledge to turn it all into real professional and business decisions.

Lee: In engineering and manufacturing roles, it’s actually been less dramatic so far. We’ve looked back over a decade’s worth of data, and haven’t yet seen a step change in advertised skills. Yes, job ads referencing AI skills have gone up, but from a very low base. Last year,  less than 0.2% of all job adverts mentioned AI in any meaningful way.

Alison: Overall, where is AI having most impact in your sector – for instance, is it in entry level roles, or in certain types of roles?

Jake: While we are seeing the benefits of AI adoption across a true diversity of roles, in augmenting workflows and improving efficiency, there is a notable impact on roles with structured, repeatable tasks – often early-career roles that have historically acted as training grounds.

Research suggests that junior roles are most likely to be affected by contraction due to the impact of AI. This doesn’t mean AI is causing entry-level jobs to disappear entirely, but they are under pressure from broader economic conditions and rising labour costs for businesses, and the bar is clearly shifting. Graduates and early career professionals are increasingly expected to arrive with AI literacy and strong human skills, knowing how to work with AI tools, validate outputs, and add value quickly.

Software engineering is another interesting case. There are examples of how AI-powered assistant tools can support coders with initial drafts of code and reviews to improve efficiency. And coding agents are becoming increasingly capable too, which will see human work shift focus to things like context, integration, effective oversight and quality.

Claire: We’re seeing that generative AI is impacting on every role in some way. In customer services and analytical roles, the shift is already visible. But it’s not uniform – the extent of the changes will be unique to each role. 

Lee: It really depends on company size. SMEs using AI tend to lean on it for admin-heavy tasks – writing tenders, producing documents, sorting finance processes. Larger companies are using AI to improve processes, boost productivity, and streamline workflows.

In our sector, we’re not seeing a dramatic loss of entry-level roles yet. But we are watching closely.

Changing skills landscape

Alison: As AI adoption grows, what skills are becoming more important?

Claire: Beyond basic digital literacy, there is rising demand for skills in data analysis, critical thinking, and adaptability. The ability to interpret, critique and act on AI-generated insights, as well as collaborative problem-solving, are now crucial. 

Behaviours such as emotional intelligence and communication remain essential. Continuous learning and upskilling are vital, as the pace of technological change shows no signs of slowing.

Jake: We’re seeing growth in demand for AI-related skills, and they often carry a wage premium. But this isn’t just about deep specialist expertise.

General AI literacy across the workforce is becoming more important. At the same time, employers want people with strong human skills like judgment and critical thinking; those who can frame problems, question outputs and apply AI in practical contexts. 

There’s also growth in specialist areas – AI and machine learning, cloud, cybersecurity, data engineering, as well as increasing focus on AI assurance and responsible AI.

Lee: For a lot of organisations it’s all about the prompts. If you don’t provide AI with the right information, you won’t get a good answer. So whatever tool you are using, the quality of the output depends on the clarity of the input. That’s a mindset shift as much as a technical one.

Alison: The pace of change is intense. What are the main challenges in your sector in adapting to AI change?

Lee: Time. Most engineering and manufacturing firms are SMEs under huge pressure. They’re focused on keeping the business running in the face of mounting cost pressures and economic uncertainty. Trialling AI isn’t always top of the list.

Even when they want to explore it, the landscape is confusing. New tools appear every day. It’s hard to know which one to trust or invest time in.

And many firms are long-established family businesses. They’re reticent about changing processes that have worked for years.

Claire: We are still in the early stages of GenAI adoption, and so the challenge is to respond to changing skills demands without complete clarity on exactly how our sector will operate in the future. We need to build the plane, whilst flying it in a clear direction, but with the exact destination unknown.

Most firms are already rolling out AI enabled tools and widespread training to help colleagues use them most effectively.

Jake: The pace of change is a big challenge. Many SMEs lack the time, budget or knowledge to adopt AI safely and strategically. 

Surveys show that internal resistance and cultural barriers are real barriers. The lack of structured upskilling programmes and internal policies is key, as it means firms may either under-adopt or adopt unsafely, with negative implications for productivity.

Adapting training pathways for the AI age

Alison: What needs to happen to ensure apprenticeships and training routes keep pace?

Lee: AI needs to be incorporated into all apprenticeships to ensure all learners have a solid foundation. New roles will evolve as AI becomes more mainstream, so building adaptable core knowledge is key. 

Claire: Firms will need to respond and react to training needs at pace whilst also being aware of how skills requirements are evolving. That’s why we’ve called for apprenticeships and training frameworks to be more responsive so that firms can update training content quickly as skills requirements evolve.

Jake: Apprenticeships are absolutely still part of the answer – but they need to evolve quickly. Nearly 70% of teachers see apprenticeships as offering strong future opportunities, yet the proportion of under-25 apprentices is falling.  In tech, Level 3 Software starts have declined by 54% in five years. That’s a real warning sign.

The challenge is that tools are evolving much faster than training and qualifications. Training routes need to be more flexible and responsive so that employers can invest where skills are most needed. At the same time, we can’t ignore financial barriers. Government must ensure apprenticeship pay and support mechanisms do not make participation financially punitive.

Alison: What about supporting the existing workforce – what is happening in your sector? 

Claire: We’re seeing excellent progress by financial services firms to put skills at the heart of business strategy. Our recent Future Skills Report showed that investment in skills by financial services firms is outstripping almost all other sectors.

We are also leading a landmark research project, on behalf of HM Treasury, into the impact of AI and other disruptive technologies on the sector’s workforce, and subsequent skills needs over the next 5-10 years. Through the research, we will examine how AI can drive growth and productivity if skills systems respond effectively.

Lee: From what we are hearing, employers are saying that the current system does not support reskilling of current staff. Staff can go on an apprenticeship but that is time consuming. We know Apprenticeship Units are coming in but will they meet the AI needs of employers? Businesses need modular, stackable learning options that can be adapted to suit business needs. 

Jake: Initiatives like the Lifelong Learning Entitlement and the reformed Growth and Skills Levy are a step in the right direction, but getting the design and implementation right will be critical in the context of AI adoption. Effective and dynamic modular learning is essential, and there are still question marks over whether the design of these initiatives will be effective in delivering.

Role of sector skills bodies in AI transition

Alison Morris: What role should sector skills bodies play in helping navigate the AI-change?

Claire: Sector skills bodies are central to coordinating research, developing standards, and advising government on strategic priorities.

Our research work is helping drive discussions with government around skills needs for the future. By continuing to gather insight from our members, we are gaining deep understanding of how employers are responding to tech disruption, sharing data on changing skills demands and good practice on rolling out upskilling and reskilling programmes within firms.

Jake: Sector skills bodies and trade associations have a critical role to play in the AI transition. We are well positioned to understand the key opportunities and challenges facing different industries across the economy, playing a strong role as translators and convenors. 

We understand how AI adoption is affecting roles and occupations and can articulate real-time sector needs to that training frameworks stays aligned. 

techUK works closely with government and Skills England to inform frameworks and policy. We’re also working on key projects to help navigate the AI transformation, including supporting the AI Skills Boost programme that’s rolling out free AI courses to every adult, and Universities UK’s Future Universities project, which is helping promote growth and innovation. 

Alongside this, we’re pushing for reforms that embed digital and AI skills across the education system and unlock more flexible, modular training routes. The priority is making sure the system is agile enough to keep pace with change.

Lee: Engineering and manufacturing is vital to the UK economy, but we’ve struggled for years to attract skilled people. Subjects like Design and Technology have declined in schools. We need these options restored and prioritised – everything around us has been engineered or manufactured, but that’s often forgotten while we focus on digital transformation.

Sector skills bodies have a vital role in making the case for industry support to policymakers

Reasons for optimism

Alison Morris: And finally, what are you optimistic about?

Lee: AI can help map transferable skills from declining roles to new opportunities and create targeted upskilling pathways.

There is huge potential for opening up new development routes: we are interested in looking into where roles are in decline and then looking at what skills could be transferred into a growing occupation with upskilling. 

AI is also helping create and adapt training materials for different learning needs. Tools checking for plagiarism are common, and AI-assisted marking could speed up assessment and improve feedback. 

Jake: The tech sector is optimistic about AI’s ability to boost productivity and to shift human time toward higher-value work. 

Recent UK data from IBM shows that many firms are already reporting significant AI-driven improvements, enabling workers to spend more time on things like strategic planning, innovation, creative tasks and client relationships. 

We’re also optimistic about assistive technologies powered by AI, and growing personalisation with adaptive tools used to improve education and training. But we also need to ensure that AI rollout is matched with the right training and governance.

Claire: I agree, AI presents huge opportunities to improve customer outcomes, improve efficiency, create new products and services and enhance operations. However, there are rightly concerns around equity of access, ethical and safe use, and the pace of change.

Success will mean a workforce that is adaptable, supported, and empowered to make full use of AI’s capabilities.

By Alison Morris, Director of Policy at Skills Federation; Jake Wall, Policy Manager at techUK; Claire Tunley, Chief Executive of Financial Services Skills Commission and Lee Higgins, Sector Intelligence Manager at Enginuity