Manufacturing's need for digital talent is soaring, but with a lack of skills available it's not sustainable for businesses to keep poaching people from one another. How can we overcome this digital dilemma?
The UK is losing out on £63bn a year because of the digital skills gap.
This could be impacting the country’s competitiveness, limiting business’ ability to be innovative and deterring investment.
A new report from CBI and Tata Consulting Services has found that more than two-thirds (67%) of UK firms have unfilled digital vacancies.
Only a third (31%) of companies are confident that British business will be able to access the digital skills they need in the years ahead.
It reports that around 60% of larger firms said their digital skills needs are set to soar over the next three to five years. While smaller businesses’ (69%) needs are likely to peak over the next year or two.
To fully embrace digitalisation, manufacturing needs digital skills. It requires people who are comfortable with technology and disruption, and are familiar with collecting, consolidating and analysing the huge volume of data being generated 24/7 by factory floor machines, enterprise systems and assets operating in the field.
Poaching from each other
Firms are taking action to ensure they have the skills they need, with 56% of businesses confident they are spending enough on addressing their digital skills demands right now.
But, almost half of businesses (46%) are fishing in the same talent pool, by trying to hire outside of their organisation and poaching people from other sectors, as the main way to gain these skills.
Technology is changing the way we live and work. Yet, the figures show an industry struggling to find the digital talent required to move forward.
“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,” said Matthew Fell, CBI Chief UK policy director.
“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.”
Sounding the digital alarm
Currently, one in five firms are still unable to find employees with basic digital skills, like writing documents on a word processor or using spreadsheets effectively, the report warns.
Demand is rising across all sectors for more advanced digital skills. The majority of larger firms (55%) are reporting challenges in recruiting software engineers and 61% are struggling to hire data analysts.
But only a quarter 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.
Three key recommendations:
- Government 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
- 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
- Ensure digital skills are at the heart of the National Retraining Scheme, including targeted support for software engineering and data analysis skills