Skills Shortage in the UK Series -bulletin 8

The Edge Foundation have launched the 8th bulletin that pulls together research across the employment and education sector to highlight and assess the skills shortages facing the UK.

“There is no doubt that 2020 was a momentous year for both the education system and the labour market, but many of the trends we have seen are not new. They are underlying changes and challenges that have been previously reported in these bulletins and have been exacerbated by the impact of Covid-19.” Olly Newton, Edge, Executive Director of Edge Foundation

This edition looks at the following reports:

• Employment and Skills Challenges and How to Tackle Them (Learning and Work Institute: reference 1,2 and 3)
• Employer Skills Survey 2019 (Department for Education)
• Business Barometer 2020 (Open University)
• Youth Voice Census 2020 (Youth Employment UK)
• Learning for Life: funding world-class adult education system (Confederation of British Industry)
• The Future of Jobs Report 2020 (World Economic Forum)
• Post-Covid-19 Skills Gaps and Employment Trends Report 2020 (The Skills Network)
• The Green Economy -driving a revolution in sustainable skills
• Uk Consumer Digital Index 2020 (Lloyds Bank Group & Ipsos MORI)
• Tech Nations Report 2020 and Jobs & Skills Report 2020 (Tech Nation)
• Case Studies: National College for Digital Skills

In this edition of the Skill Shortages Bulletin, the focus has been on three main areas: (1) the trends emerging before lockdown, (2) the impact of the pandemic, (3) the sectors that could drive the economy moving forward.

Download the full Skills Shortage Bulletin 8

Pre-Covid-19 Trends

1. Only 17% of businesses reported having vacancies; the first year since 2011 that there has been a decline. Of those hiring, almost a quarter of vacancies were due to skill shortages. (the Department for Education, 2019)
2. Confidence amongst young people is declining, with particular disparities between gender, ethnicity, additional needs and the most disadvantaged. In addition, for a first time since the Youth Voice Census started, young people responding said they thought their social status would be a barrier. Disability and discrimination also featured more prominently than in other years (Youth Voice Census, 2020).

The Impact of Covid-19

1. Pre-existing barriers and labour market inequalities have been made much worse by the pandemic; geographically, those in lower level occupations and in shut-down sectors, for older workers and young people -their education disrupted and an increasingly challenging labour market. Although the scale and extent of the economic impact of Covid-19 is yet to reveal itself, the labour market impacts have been profound: vacancies are falling, redundancies are rising, working hours are declining and unemployment is predicted to keep rising and remain above pre-crisis levels until 2023-2024. (Learning and Work Institute)
2. Whilst vacancies have been low, there are some signs of recovery in different sectors and there has been a significant increase in people available for work; however 3 in 5 employers report they cannot attract workers with the skills they need. This is despite employers increasing spending on skills by £1.7 billion. (Open University).

Moving forward

1. Roles such as nursing and care, auditing skills and accounting top the list of roles currently most in demand, showing a skills shortage. Technical skills such as programming, coding and software development are growing by 7.3% (The Skills Network)
2. 80% of employers reported that their work processes are becoming increasingly automated; this pace is expected to continue and even expand in some areas. Alarmingly, job creation is slowing while job destruction accelerates; alongside this  inequality is likely to be exacerbated by the dual impact of the growing use of technology and the pandemic recession. (The World Economic Forum)
3. To reach the 2050 target of zero emissions, millions of new jobs will need to be created, existing jobs will. Public Policy Research suggests that approximately 200,000 jobs could be created in energy efficiency by 2030, an additional 100,000 jobs could be created over the next decade through decarbonising the UK’s housing stock. (Edge)
4. UKtech companies have seen £10.1 billion investment, third in the world for tech investment. UK tech employment grew by 40% in the last 2 years, now accounting for 9% of the national workforce with 2.93 million jobs created. There has been a 36% increase in digital tech vacancies between June to August 2020. (Tech Nation)