As tech workers consider their options, here comes the next big skills crisis

The UK economy is showing early signs of post-pandemic growth, but a boom in job vacancies and a lack of workers with basic digital skills could spell trouble for UK tech.

Demand for technology professionals is booming, yet swathes of the UK workforce lack even basic digital skills.
Image: Dimitri Otis/Getty Images

New research suggests that more than half of the UK workforce lack essential digital skills needed for work, raising fears that the country is heading toward a digital skills shortage as employers begin ramping up their post-pandemic recruitment efforts.

Data from the Office for National Statistics this week showed “early signs of recovery” in the UK jobs market as lockdown restrictions eased and businesses resumed hiring.

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According to the figures, the UK unemployment rate fell 4.8% between January and March 2021 – the largest quarterly decrease since 2015.

Yet while the data suggests a slow return to growth for the UK economy, the COVID-19 pandemic has left 772,000 fewer workers on the payroll compared to Spring 2020. At the same time, job vacancies between February and April sat at 657,000 – their highest level since the start of the pandemic – leaving many businesses facing staff shortages as they start to fully reopen.

Paul Farrer, founder of recruitment agency Aspire, said many businesses looking to ramp-up recruitment following months of closure faced being stung by a shortage of talent. “We’re noticing that the number of people applying for a job has dropped to pre-pandemic levels, with workers not possessing the skills required to fill available positions,” Farrer said.

The UK’s tech sector faces being hit particularly hard by the disparity between demand for skilled workers and available talent.

Research published this week by digital skills coalition FutureDotNow estimates that some 17.1 million UK adults – approximately 52% of the country’s workforce – lack basic, essential digital skills like the ability to manage their finances online, set up an email account, connect to Wi-Fi or even operate a computer or smartphone.

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The UK risks missing out on £141.5bn in GDP over the next 10 years if efforts aren’t made to train and upskill this so-called “digital middle”, researchers said.

Meanwhile, demand for skilled technology workers continues to increase. According to the Tech Nation Report 2020, the UK’s digital tech sector grew almost six times faster than the rest of the economy in 2019 – growth that will have only increased as organizations switched to digital-first operations in 2020.

There is a predictable link between the level of essential digital skills in an organization’s workforce and its ability to accelerate its business performance, FutureDotNow researchers said.

“Digital transformation is set to bring seismic changes to all parts of the UK economy. Automation and technology will create millions of new jobs, increasing employer demand for digital, STEM and interpersonal skills.

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“Without intervention, we are likely to see a further widening of skills gaps and growing inequality, and risk losing the opportunities and increased competitiveness that digital transformation can bring.”

Data from the ONS in February revealed that more than 100,000 new technology jobs were created in the UK since March 2020.

Technology recruiter Harvey Nash says it has seen a 112% increase in new tech roles compared to April least year, with solutions architects, business analysts and Java developers in particularly high demand.

At the same time, the recruiter’s 2020 CIO Survey found that 82% of IT leaders in the UK expect their technology headcount to increase or stay the same in 2021.

Bev White, CEO of Harvey Nash Group, said this week’s ONS figures were “proof that IT leaders are now putting their plans into action,” adding that the shortage of technology talent in the UK meant recruiters were searching further afield to fill vacancies. “Due to a lack of homegrown skills, UK tech continues to recruit overseas talent, which is largely attracted to the South and London,” said White.

“In fact, almost half (46%) of tech professionals in the South and London reported that they had moved to the UK from abroad.”

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In contrast, the north of England sees far fewer international tech professionals, White said – with only 9% in the north-west and 15% in the north-east. “Northern companies are therefore experiencing a double hit: a lack of local tech skills, coupled with a shortage of overseas talent attracted to the region to carve out a career in technology,” said White.

According to the UK Industrial Strategy Council, the most widespread source of under-skilling in the UK by 2030 will be in digital skills, unless action is taken.

This begins with upskilling the workforce. FutureDotNow found that only 23% of employees report having received any digital skills training from their employers, suggesting that most lack basic knowledge on accessing payslips, booking shifts and leave, avoiding social media disasters, basic password hygiene, how to use the cloud and cybersecurity best practices.

Liz Williams, chief executive of FutureDotNow, said the widening gap between digital exclusion and advanced digital skills was an urgent cause for concern. “There’s a significant part of our workforce without the essential digital skills required for the new global digital world we’re competing in,” said Williams.

“Great businesses are underpowered like smartphones with a flat battery because their workforces lack these essential digital skills.”

The situation could be even worse if recent research by HR software company Personio is anything to go by.

A survey of 500 HR leaders and more than 2,000 employees found that 58% of professionals in IT and computing roles are considering a job change in the next six to 12 months, potentially walking away from their employers at a time when organizations are trying to double-down on their technology investments.

Commenting on the findings, Aidan Donnelly, director of technology platform at Personio, said businesses needed to prioritize holding onto skilled workers if they wanted to avoid disruption as they attempted to return to business-as-usual, not to mention having to funnel resources into expensive and time-consuming recruitment efforts.

“To prevent tech talent leaving, and protect their business, employers need to take time to speak to employees to understand their challenges and needs – and address these accordingly, Donnelly told TechRepublic.

“Ultimately, this is the whole business’s responsibility, and management and leaders should be leading the way in opening these conversations and bridging any gaps.”