The pandemic has accelerated change in the UK’s labour market, leading to a shift in the type of jobs available and exacerbating the growing gap between the skills people have, and those sought by employers.

That’s according to the new Skills Index report from City & Guilds Group and Emsi, which analyses the present and future shift in demand for skills in the UK.

As a result, City & Guilds Group is calling for individuals, education organisations, businesses and Government to adopt amore jobs and skills-first focused mentality when it comes to education and training. This will better match skills supply with demand, and drive a stronger, faster economic recovery after the pandemic.

The report unveils some growing mismatches between the skills people have, and those sought by businesses today and in the future – suggesting that businesses’ productivity and ability to succeed is at stake. Analysing data collected by the British Chambers of Commerce, the research found that only just over half 54% – businesses state that their organisation can recruit the skilled individuals it needs, and over half (56%) face some kind of barrier to meeting their skills and talent needs – with 28% citing the mismatch between skills they need, and the skills people gain through education.

Meanwhile, the research found that three in five (61%) working age adults (equivalent to more than 22 million people^[1]) don’t feel they are equipped with all the skills they will need to unlock new opportunities over the next five years. This points to potential future barriers for individuals looking to progress their careers, access well paid roles – or simply remain employable.

Worryingly, 30% (equivalent to 11 million people) have not received formal workplace training in the last five years and, highlighting the pandemic’s impact on training budgets, nearly two thirds (64%) have not received any training in the past year. But this need to constantly retrain is not going away any time soon, with 41% of employers saying changing customer behaviours or expectations are the most likely factor to change the skills they need in the future.

Kirstie Donnelly MBE, CEO of City & Guilds Group, commented: “Covid-19 has radically disrupted the labour market displacing almost a million people from their jobs, yet paradoxically employers are telling us that skills gaps remain a chronic issue for them. Meanwhile, with a majority of working age adults not confident they have the skills they need for the near future, and just a third not having taken part in any workplace training for at least five years, it’s clear that employers and employees may both struggle to keep pace with the rapid changes in skills needs being driven by factors such as AI and the move to net Zero.

“Solving this skills mismatch requires a shift in mindset from the individuals themselves as well as employers and the UK Government. It is no longer possible to leave full time education at 18 or 21 and never reskill again, we will require people and businesses to upskill and reskill throughout their working lives.”

Andy Durman, Managing Director at Emsi UK: “The Skills Index highlights the need to rethink skills from the perspectives of people, employers and education providers, and how we will have to join these three together in far more intentional ways than ever before if we are to get national and local economies back on track. Not only do we need to help people to understand the skills they possess and those they need to develop, but we also need to help employers understand the skills they need to succeed, and help education providers understand which skills they need to teach to prepare people for a changed labour market. Skills are the foundation blocks of our future, so it is time for us to rethink, reimagine and rebuild the labour market upon them.”

By examining the current supply of skills and employer demand, the research also pinpoints a number of areas where demand is set to outstrip supply within the next three years. Unable to recruit for these immediate skills needs from a talent pool restricted by Brexit and new tighter immigration policies, it may be up to employers to develop them in house either with existing staff, or people displaced from other industries.

Demonstrating this skills mismatch, half (53%) of employers say they will need industry or job specific skills in the next three years – however, just a quarter (24%) of working age adults are confident they have technical skills related to their role. Meanwhile, as digital transformation gathers pace, a fifth (22%) of employers say they will need advanced digital skills in the next three years, but only 9% of working age adults are confident they have these skills.

In analysing the shift in demand for skills in the UK from 2019 to 2020, the Skills Index additionally paints a clear picture of how the pandemic prompted demand for skills to soar in key areas such as health & social care and digital/tech roles.

Rising demand for health & social care skills
As healthcare, sanitation and hygiene came to the fore due to the pandemic, job postings in health and social care increased by a fifth (22%) from April 2020 to April 2021, with demand for Nurses (up 328%), Physician Assistants (up 275%) and Caregivers (up 246%) seeing the greatest growth.

Health & social care skills also dominated the overall list of top 10 technical skills in the Index, with the most in-demand skills including: nursing, mental health support, personal care (ability to support with personal and private hygiene and toileting), learning disabilities support and knowledge about using PPE.

A leap towards digital transformation
With the pandemic leaving businesses with little choice but to pivot operations online, demand for digital skills also surged. Job postings for digital and tech saw a 21% increase from April 2020 to April 2021, with the biggest growth in postings for Cybersecurity Technicians (up 19,222%), Full Stack Engineers (up 312%) and Cybersecurity Engineers (up 292%).

High level programming and software skills also featured among the most highly sought-after technical skills – including Python (programming language), Amazon Web Services and Microsoft Azure (cloud computing platforms).

 The Skills Index outlines four key recommendations to help address the issue of skills shortages, these include:

• Five-decade careers mean we need a more radical approach to lifelong learning – incorporating more bite-sized learning and a Government campaign to convince people of the benefits of training throughout their lives
• Employers, individuals Government, all to play a part in funding lifelong in the future
• Better use of data to enable government, employers and individuals to plan for future skills needs and a commonly understood language of skills to be introduced
• Making the skills system more accessible to smaller businesses