The skills gap is damaging Europe and the UK

The graduate and school leavers’ skills gap has come under the spotlight recently, with the UK generally seen as faring poorly.

Research by the Chartered Institute of Management Accountants in 2015 identified UK school leavers as the worst in Europe for essential skills, and the Confederation of British Industry believes a lack of high-quality apprenticeships has created an unskilled workforce through the exacerbation of numeracy and literacy problems.

The government has been pushing for a major increase in the number of apprenticeships, but there are still questions over whether enough is being done to make sure young people view such options as worthy alternatives to university.

Some companies, such as Rolls-Royce, have more than 1,000 science, technology, engineering and mathematics (STEM) ambassadors worldwide. Employees of the company spend at least 60,000 hours a year delivering STEM programmes to local communities.

Despite such initiatives, a recent YouGov study found that nearly six in 10 employers of STEM graduates think there is a skills gap in the UK.

The STEM Skills Gap Report found that 59% of businesses and 79% of universities surveyed believe there aren’t enough skilled candidates leaving the education system to meet the employment requirements of industry.

The survey also demonstrates a need for greater collaboration between academics and businesses, as the study reveals that universities’ approach to teaching STEM subjects does not always tally with the needs of employers.

One of the most important debates is whether companies, the government or individuals should ‘fund’ education to ensure they are provided with the skills they require.

In reality, the responsibility should be levelled at employers, to train staff to meet the needs of their specific business, and at the government, to create a valued education system better able to prepare young people for life beyond the classroom.

A report by the Institute of Directors reveals that its members consider STEM knowledge to be important, but the following skills even more so:

• honesty and integrity
• basic literacy skills
• basic oral communication skills (e.g. telephone skills)
• reliability
• being hardworking and having a good work ethic
• numeracy skills
• A positive, ‘can do’ attitude;
• punctuality
• the ability to meet deadlines
• team working and co-operation skills.

Universities and other educational partners have a responsibility to acclimatise young people to the world of work at a much earlier stage through employability programmes and greater work experience opportunities. The promotion of more paid placements, internships and apprenticeships is also important.

Businesses need to acknowledge that skills shortages are not just a problem for graduates trying to find their way into the world of work; they can create serious difficulties for businesses trying to recruit the employees they need.

In 2016, the UK government recognised that the digital economy requires workers to have specific skills. It has adopted the five basic digital skills as defined by the charity Go.On:

• managing information
• communicating
• making payments
• solving problems
• being able to create things online.

Go.On believes more than 12 million people, and a million small businesses in the UK, do not have the appropriate skills to prosper in the digital era. But the UK is not the only country suffering.

According to a report by management consultants McKinsey – Education to Employment: Getting Europe’s Youth into Work – more than a quarter of European employers are struggling to fill vacancies at a time when young people are facing high levels of unemployment. The report, drawn from a study of eight major European economies, states that youth unemployment has hit crisis levels. In the European Union, 5.6 million young people are out of work, with southern Europe suffering the most.

The study calls for better alignment between the worlds of education and employment, warning that education providers have too much confidence in the relevance of what they are teaching. Tellingly, 74% of the education providers surveyed believed that young people were being equipped with skills for work; only 35% of employers agreed that this was the case.

The skills shortage in the UK is one of the most severe, resulting in a ‘war for talent’, according to the Global Skills Index from recruitment group Hays and consultancy Oxford Economics.

Industries such as engineering and technology have suffered the most from the skills gap and the remedy can be found in better training, attracting highly skilled workers from overseas and better investment in technology.

Last July, the UK government unveiled an ambitious plan to boost productivity. It wants to train up 3 million apprentices by 2020 to fill the skills gap in areas such as engineering.

This has been welcomed by business leaders. However, many are critical of the government’s policy on immigration, which they say deters highly skilled workers from outside the EU, aggravating the shortage of skills. The government has also launched an inquiry into the Tier 2 Skilled Workers system, where the most pressing questions to consider will be:

• What impact has the cap of 20,700 employer-sponsored skilled migration (Tier 2 general) visas had upon employers?
• Which sectors have been particularly affected?
• If a cap on Tier 2 skilled workers remains, what is the best way to meet the needs of the UK economy while maintaining control of the number of skilled workers coming to the UK from outside the European Economic Area (EEA)?
• If the cap on Tier 2 were to be removed, what would replace it?

The government hopes to gain an insight into whether the current system is the best way to achieve its aim of a controlled immigration system that can maintain essential levels of skilled workers.

The introduction of apprenticeships and the review of work visas could address some of the longer-term issues. In the short term, companies can quickly identify their own skills shortage by analysing recruitment and retention rates, and targeting jobs that have not been filled or have a high attrition rate due to employees not being sufficiently skilled.

Companies can establish their own graduate or apprenticeship schemes based around their own needs. They can also improve links with schools and universities to outline what kind of workers they need, so that educational institutions can introduce measures into the curriculum to improve the overall employability of students.

One of these initiatives is the ‘Degree Apprenticeship’, in which 40 companies have hired IT apprentices in partnership with universities such as Manchester Metropolitan University, Queen Mary University and Northumbria University. The premise is that businesses are able to integrate the individual into the culture of a company while they are studying, rather than waiting until the person graduates and taking a risk on whether or not they are ‘work ready’.

As has already been noted, the responsibility of shorting the skills gap should be the triumvirate responsibility of employers, the government and educational institutions, working in partnership to strategically target specific areas of concern, in the short and long term.

It is also the responsibility of the individual to ensure they have the correct skills for their chosen career. They should gain practical working knowledge of the sector by applying for part-time work, placements or internships, seek advice as to what employers are looking for in their employees and work towards these skills and attributes. ν

Dr Jonathan Lord is a lecturer in human resource management and employment law at Salford Business School