From education to employment

UK companies sound the alarm as digital skills needs set to skyrocket in next three years


A new CBI/TCS report highlights the UK’s rapidly accelerating digital talent gap as new technologies transform the way we live and work. Currently, the UK is losing out on £63 billion  [1]  a year as companies struggle to find people with digital skills. This could jeopardise the country’s competitiveness, deter investment and limit people’s ability to access the jobs and services that technology offers.

CBI/TCS report “Delivering Skills for the New Economy – Understanding the digital skills needs of the UK, which surveyed 250 businesses, revealed that:

  • Over two thirds (67%) of companies across the UK have unfilled digital vacancies
  • Only a third (31%) are confident UK businesses will be able to access the digital skills they need in the next three to five years
  • Around 60% of larger firms surveyed said their digital skills needs are set to skyrocket over the next three to five years. While smaller businesses’ (69%) needs are likely to peak over the next year or two.

The majority of companies surveyed are taking action to tackle their digital skills shortages with 56% of businesses confident they are spending enough on addressing their digital skills needs right now. 

But in reality, almost half of businesses (46%) are fishing in the same pool, by trying to hire outside of their organisation as the main way to access the digital skills they need.

Matthew Fell, CBI Chief UK Policy Director, said:

“Technology is changing the way we live and work, creating millions of jobs and adding £184 billion to the UK economy. Yet this new data reveals the majority of firms are struggling to fill digital roles across all sectors and skills levels – with demand set to skyrocket in the next few years. 

“Digital skills are absolutely fundamental to getting people ready for the future of work and helping companies make the most of the opportunities technology brings.

“It’s essential we tackle the UK’s digital skills crunch now to remain internationally competitive, and promote the UK as the number one place for businesses to invest.

“Ensuring people have basic digital skills will transform lives, open up job opportunities and help people across society access public services online. It’s important that no-one is left behind as our workplaces change and that everyone has the skills to benefit from the new economy.”

Lady Cobham CBE, Director General of The 5% Club, said:

“The 5% Club supports the CBI’s recommendation for Government to work with companies and further education providers to create digital skills training to meet the business needs of today. We agree that the Government must encourage apprenticeships as a key route to filling digital roles and inspiring young people to take them up.

“Businesses from almost all sectors are concerned about the digital skills gap; as technology advances, the workforce requires more frequent skills training. In a survey of our business members in November 2018, less than 2% of them were fully confident that their employees were well placed to take advantage of the rising use of technology, necessary for businesses to thrive.

“Membership of The 5% Club has grown, as more businesses commit to on-the-job training through ‘earn and learn’ schemes. Two thirds of the members we surveyed (67%) believed that earn and learn schemes, such as apprenticeships, are critical for upskilling an ageing workforce; over half (54%) believed they can help businesses embed and embrace digitalisation and technological change in particular.

“It is vital that further education is able to provide the right training to support employers Colleges must work with businesses and each other to ensure quality skills training is available, where it is needed throughout the UK. We support the CBI recommendations for the Government to facilitate this, to enable a strong and prosperous UK, with opportunity for all.”

What’s clear is that companies are struggling to hire people with basic or advanced digital skills.  Currently, one in five firms are still unable to find employees with basic digital skills – such as writing documents using a word processor or using spreadsheets effectively.

And advanced digital skills are increasing in demand across all sectors.  55% of larger firms are reporting challenges in recruiting software engineers and 61% are struggling to hire data analysts.

CBI recommendations include:

  1. Government (DCMS/DfE) must set an ambitious target for the entire UK workforce to have basic digital skills by 2025 and work with businesses to engage with relevant academic and technical education institutions
  2.  Businesses must better understand their digital skills needs and coordinate  with local policymakers, businesses and learning providers to create local skills provision that address their skills demands
  3. Ensure digital skills are at the heart of the National Retraining Scheme, including targeted support for software engineering and data analysis skills.

Shankar Narayanan, VP & Head – UK & Ireland, Tata Consultancy Services, said:

“This new research with the CBI makes it clear that for the UK economy to remain competitive into the future, it’s important to ensure the UK’s workforce continually see the value in building the necessary skills for a career in technology. This doesn’t just mean training those already in the technology space. In fact, it means looking at the other talents within a business and knowing how to capture these skills and enhance them with more technology knowledge and literacy.”

Firms must collaborate further with schools and universities

The majority of firms surveyed are investing more in training on digital technologies (75%). Around a third of businesses are taking on apprentices (31%), organising external short courses (30%) and a similar number are collaborating or partnering with small businesses, suppliers or contractors (33%) to bring in the skills they need through on the job training or placements.

Still, only a quarter (25%) of firms are engaging with education providers to develop courses that suit their needs. With many businesses seeing significant value in better coordinating local demand and supply, government must do more to support these initiatives.

Shankar Narayanan, VP & Head – UK & Ireland, Tata Consultancy Services, said:

“In today’s digital economy, there are two key focuses for sustainable talent development: encouraging students to understand what it takes to pursue a successful career in technology and giving employees the best possible training opportunities.

“TCS is focused on developing STEM skills in communities all around the UK. Our skills programmes like Digital Explorers, which help children connect day-to-day interactions with consumer technology to the IT tools and skills which power them, are helping to grow the UK’s digital talent pool.”

Matthew Fell, CBI Chief UK Policy Director, said:

“Firms are sounding the alarm in their struggle for digital skills and the uncertainty that brings. With companies fishing in the same pool for talent, there’s a clear need for businesses to diversify their hiring strategies and look for innovative ways to help their people improve their digital skills.

“It’s encouraging to see businesses investing in training and engaging with schools.  But that alone won’t be enough.  Maintaining the UK’s competitiveness in the years ahead is the crucial challenge and one where we must succeed. This begins by firms making a concerted effort to upskill and retrain the current workforce and future generations to come.”

Across the UK, the CBI speaks on behalf of 190,000 businesses of all sizes and sectors. The CBI’s corporate members together employ nearly 7 million people, about one third of private sector-employees. With offices in the UK as well as representation in Brussels, Washington, Beijing and Delhi, the CBI communicates the British business voice around the world.

About Tata Consultancy Services Ltd (TCS): An IT services, consulting and business solutions organization that has been partnering with many of the world’s largest businesses in their transformation journeys for the last fifty years. TCS offers a consulting-led, cognitive powered, integrated portfolio of business, technology and engineering services and solutions. This is delivered through its unique Location Independent Agile delivery model, recognized as a benchmark of excellence in software development.


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