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The U.K. needs a reskilling revolution

By Andrew Harding, FCMA, CGMA, Chief Executive — MA, Association of International Certified Professional Accountants

In the modern business world, organisations must look beyond financial data to improve corporate performance and drive sustainable value creation over the short, media and long-term. You must have talent with the right skills to maximise organisational potential. This may be obvious but, according to our 2020 Mind the Skills Gap research, U.K. small and medium businesses (SMEs) face critical skills gaps that could hamper their long-term growth. The gap between employer needs and employee attitudes towards learning and development continues to widen. 

Skills mismatch

Our research shows a clear discrepancy between the skills employers say they need, and the amount of skills training employees say they have had. This is despite the pandemic forcing many companies to reimagine how they do business.

Two-thirds (65%) of U.K. SMEs said that the COVID-19 pandemic highlighted skills gaps within their organisations. Among this group, nearly 95% said that these skills gaps are significant enough to hamper the future growth and success of their organisations. 

Yet, only three in 10 U.K. SME employees said they undertook skills training or professional development last year. Despite the relatively low number of U.K. employees undertaking training in 2020, 75% of employees said they have the appropriate skills to perform their job. 

Digital skills divide

From the business leaders’ standpoint, it’s a little bit of a different story as many continue to experience widening skills gaps. The most common gaps relate to digital skills (42%) such as e-commerce, coding, data analytics, cybersecurity and cloud computing; health and safety (37%); and people management and leadership skills (33%).  

When it comes to adapting their skill sets to the rapidly changing nature of work, U.K. SME employees are behind. 

Over 84% of U.K. SME employees aren’t undertaking any professional development, and only 18% expect to undertake training in the next year.

Employees undertaking professional development, or planning to in the next year, are prioritising technical skills specific to their job (46%); people management and leadership skills (34%); and health and safety (33%). Only 25% of SME employees consider digital skills, the most common skills gap for employers, vital.

Digital acceleration

Interestingly, 67% of U.K. SMEs also said they have accelerated their organisation’s digital transformation as a direct result of COVID-19. Within this group, nearly eight in 10 (78%) said that their workforce has the right skills to support their organisation’s digital transformation journey. Yet, 78% of these same SMEs also identified significant skills gaps in their organisations because of COVID-19, which could affect their ability to sustain organisational success and long-term growth.

Seven in 10 (70%) SME employees said that they feel prepared to work in a digital workplace, with 21% saying they are ‘very prepared’ and 49% stating that they feel ‘somewhat prepared’. In contrast, 10% stated that they do not feel prepared to operate in a digital workplace.

Among SME business leaders who said their employees don’t have the right skills for the digital workplace, 44% said they are setting up development programmes so that employees can take new responsibilities or roles. In addition, 43% said they will hire new employees with the right skills and 33% want to use external providers to deliver new services. 

What’s next?

Based on our Mind the Skills Gap research over the past three years and ongoing collaboration with business and finance leaders, we are getting a consistent picture of the structural weaknesses in the U.K. workforce’s skill set. The U.K.’s complacency towards professional development and digital skills divide is widening. The acute disruption COVID-19 created has put these issues into sharp focus.

The U.K. needs to meet the future skills challenge needed for a post-Brexit Britain and equip its workforce with the skills to thrive in the future world of work. To do that, it will need to better support all workers to reskill and help them and businesses adapt to be being both resilient and competitive. This will not happen overnight, of course. It will require businesses, employees and the government to work together. In an increasingly uncertain world, this will be key for business survival and, perhaps most importantly, future growth.