How Can UK Startups Address The Digital Skills Gap In Businesses?

The UK faces a notable digital skills gap, with 82% of jobs requiring digital skills, as reported by Microsoft. The issue, though, is that many workers feel unprepared, with 27% acknowledging a lack of necessary digital skills for their roles.

This discrepancy is causing operational challenges across industries, shown by 66% of large UK businesses struggling to find digitally skilled employees, according to the Skills Gap UK 2023 statistics.

Skills and Productivity

The gap has implications for productivity and economic performance. A study by AICPA & CIMA found that 82% of SMEs noted skills gaps, impacting the UK’s competitive stance globally. With digital transformation at the core of modern business, the lack of foundational digital skills among 68% of workers restricts growth and innovation.

Why Does the Skills Gap Exist?

Impact of Covid-19

The pandemic was the cause for a lot of businesses to move digital. This resulted in the urgent need for digital skills. Even though a lot of jobs were lost due to the pandemic, it remained true that the skills were still necessary.

Brexit’s Role

Brexit complicated the recruitment of foreign talent, particularly affecting sectors reliant on EU workers, further widening the skills gap.

The Workforce’s Evolution

Advancements in technology have outpaced the workforce’s ability to adapt, leaving a significant portion lacking essential digital skills for modern job roles.

Economic and Educational Challenges

Economic inactivity and a focus on university education over practical skills training have reduced the number of people entering the job market with necessary digital skills.

Digitalisation Across Industries

Digital skills are increasingly important across all sectors, not just IT. Despite this, there’s a notable lack of training and upskilling opportunities provided by employers.

Which Industries Are Most Affected?

Manufacturing

In manufacturing, 80% of employers struggle to find workers with needed skills, notably in automation, robotics, and IoT. This gap arises as current workers are slow to adopt new tech skills.
 

Software and Technology

The software sector faces a rapid demand for skilled workers, particularly in software development. The pandemic has intensified this need, outpacing the supply of skilled software professionals.

Business and Finance

Over 60% of CFOs report difficulties in hiring for skills in stakeholder management, commercial awareness, and influence. This shortage affects operational efficiency and strategic planning.

Engineering

With 20% of the engineering workforce nearing retirement and a projected need for 186,000 engineers annually until 2024, the engineering sector faces a critical skills shortage.

Digital Sector

Despite over 170,000 tech jobs advertised monthly, many graduates lack the necessary digital skills. Employers emphasize the growing need for advanced digital capabilities across all industries.

IT Skills Demand

Forbes reports great demand for IT skills, including Artificial Intelligence (40%), IT support (32%), Cybersecurity (30%), and Data Science (27%).
 

How Does the Skills Gap Impact Startups?

Higher Costs

Startups and small businesses are paying more because of the skills gap. They spend extra on wages and training to get the skilled workers they need. For example, wages in construction and finance went up by 6.3% in just a few months in 2022.

Slower Work

Without enough skilled workers, businesses can’t do their work quickly or well. Projects get delayed, and the quality of work goes down. This means businesses lose money and their good reputation.

Safety Problems

A lack of skilled workers means more accidents at work. Skilled workers know how to stay safe, but if there aren’t enough of them, businesses face more risks and have to spend more on training and safety.

Unhappy Workers

When there are not enough skilled workers, the ones who are there have to do more work. This makes them stressed and unhappy, and they might want to leave for a better job. Keeping workers happy is harder for businesses during a skills shortage.

Less New Ideas

Without new skills and ideas from skilled workers, businesses can’t come up with new things or grow. They find it hard to keep up with competitors and might miss out on making more money.

How Can Startups Overcome the Skills Gap?

Train Your Team

Businesses should train their employees. Smaller businesses might not need to conduct as much training as bigger companies, but it’s important for all. Many large businesses offer both in-work and extra training, showing training is key to filling skill gaps.

Look Beyond Graduates

Instead of just hiring people with university degrees, companies are now hiring those with school-level education too. This means they’re ready to train people from the start to fit their needs, opening up more options for finding talent.

Focus on Growing Skills

It’s smart to help current employees learn new skills or get better at what they do. Skills like being good at solving problems or understanding others are now really valuable. Teaching these skills means your team can handle future challenges better.

Use Technology for Training

Tech can help with training a lot. Bigger companies might use special software to see where skills are missing and plan training. All companies can benefit from tech that helps employees learn new skills, helping to keep them around longer.

Work with Others

Joining forces with local groups, tech firms, or schools can give you more resources for teaching skills. This teamwork can make it easier to train your team and improve the skills of everyone in the area.

Be Open in Hiring

When hiring, don’t just look for specific degrees or backgrounds. Be open to people who are eager to learn and fit well with your company’s culture. This approach can uncover great talent willing to grow with your business.