by Riaz Moola, Founder and CEO, HyperionDev
The skills shortages in the UK labour market are well-documented, demonstrated by the high levels of international recruitment. Notably, the technology and engineering sectors depend heavily on skilled worker visas.
Home Office data reveals that the tech sector accounts for approximately one-sixth of all skilled worker visas issued. In response to this trend, the Labour government has announced intentions to review the practice of overseas hiring to rein in the deployment of non-UK labour. Instead, it wants to upskill the local workforce and improve their working conditions.
Consequently, the job market is evolving towards a more dynamic and skill-focused structure, with a newfound emphasis on practical competencies rather than traditional qualifications. This shift requires increased adaptability from job seekers, employers, and educational institutions as they navigate this changing landscape.
UK tech sector’s current skills gap
Despite a surge in the need for technology-proficient professionals in the UK, the current skills gap has become a pressing concern for businesses nationwide. Forbes Advisor’s IT Skills Gap report 2023 reveals that 93% of UK businesses acknowledge the existence of an IT skills deficit within their organisations.
The same report highlights that 35% of businesses identify competition in the job market as a major challenge. The scarcity of skilled candidates and the abundance of opportunities in the tech sector has made recruiting and retaining qualified staff increasingly demanding for employers.
Further emphasising the digital skills deficit, the 2023 Consumer Digital Index commissioned by the Department for Education and conducted by Lloyds Bank reveals that 18% of UK adults (7.5 million) lack essential workplace digital skills. This highlights the urgent need for digital literacy initiatives to prepare the workforce for an increasingly tech-driven economy.
Competence over credentials
Companies increasingly prioritise skills over experience when assessing job candidates, reflecting a significant shift in hiring practices. Findings from the Hays UK 2024 Salary and Recruiting Trends Guide support this trend, showing that 92% of employers face persistent skills gaps. In response, many organisations are adapting their workforce planning strategies and embracing skills-based hiring methods to build high-performance teams.
The impact of these skills shortages on businesses is substantial. According to the Hays UK guide, 52% of employers report that skills gaps negatively affect productivity, while 48% note decreased employee morale. Additionally, 42% of companies find their ability to deliver projects compromised due to these shortages.
Major tech companies like Google and Apple have been at the forefront of this new hiring standard, often stating that many positions do not require a formal degree. This approach has expanded beyond the tech sector and is being adopted across various industries, signalling a broader transformation in recruitment practices.
Adopting a skills-based hiring approach has become crucial for marketing teams seeking to thrive and innovate. This strategy is particularly well-suited to the ever-changing digital landscape, offering benefits that extend far beyond simply filling vacant positions. By focusing on specific competencies, marketing departments can build agile teams capable of tackling emerging challenges and navigating the industry’s unpredictable future.
Closing the skills gap
The prevailing skills gap prevents many individuals from accessing well-paying job opportunities. However, increased investments in mentorship, training, and skills-focused recruitment strategies can turn this around. Specific programs and initiatives aimed at skills development, such as the recently launched Skills England initiative, will help bridge the skills gap and should become the norm.
The government should also support businesses by facilitating partnerships between educational institutions, tech companies, and training providers. According to HyperionDev’s Graduate Outcomes Report 2024, 88% of graduates were employed within 6 months of completing a skills bootcamp. With this in mind, the proper backing of Labour’s policies can promote scalability and adapt to rapid technological changes, while fostering a culture of collaboration and creative thinking. These efforts will help companies maintain their competitive edge and remain at the forefront of innovation.
The road ahead for the UK tech sector
The renewed emphasis on addressing the UK skills gap sends a positive message to the tech industry and society alike. If the new government can successfully prioritise and implement effective upskilling initiatives, there is considerable potential for enhanced public-private partnerships, improved employment rates, and technological advancement.
This focus on skills development could lead to a healthier economy, benefiting businesses and individuals across the UK.
