The Prime Minister announced on 29 September plans to transform the training and skills system, making it fit for the economy of the 21st Century and helping the country build back better from coronavirus. The ‘Lifetime Skills Guarantee’ aims to give adults without an A-Level or equivalent qualification the chance to take free college courses that are valued by employers. It also gives a new entitlement to flexible loans to allow courses to be taken in segments, boosting opportunities to retrain and enhancing the nation’s technical skills.
This initiative is to be welcomed in the face of large-scale redundancies in the face of Covid-19. Unemployment is expected to be around 7-10% in the coming months once the furlough scheme ends on 31 October. The younger, lower paid and women are more likely to be seriously affected but older, middle-ranking managers will not be immune. A recent survey by the CBI and McKinsey revealed that nine in 10 employees, or 30m people, in the UK will need to learn new skills or be retrained entirely over the next decade at a cost of £13bn per year. That includes about 21m people who will need to learn basic digital skills.
With such a sizeable problem, what further levers can the public and private sectors pull to deliver a more resilient skills market? To be able to consider this question, it is first necessary to understand the extent to which the Covid-19 virus is driving structural change in the economy. Some trends are already visible in areas like retail and catering but others are hard to predict, hence the need for a plan to develop resilient skills. The second issue is to understand what resilient skills are needed. Literacy and numeracy can be expected to remain as core as ever and digital skills will be increasingly important but what else will be required. To achieve such understanding a lot more analysis need be undertaken.
In a webinar organised by Resilience First on 21 October, a group of professionals and experts in the field debated the topic. Here are some of their key findings.
- There is a real challenge around apprenticeships which should be a key part of the long-term solution. There has been an increased interest in apprenticeships over the last few months, driven in part by the manufacturing sector’s visible contribution to dealing with the coronavirus pandemic. But because of the pandemic, firms do not have the money to take them on.
- The government should make reforms to the apprentice levy to allow greater flexibility in the way business can use the funds. Covid-19 could be a real driver to increase digital skills but where people already have technical skills in other areas and want to upskill, they may not qualify for the support recently announced by the government if, for example, they already have A-Levels or equivalent.
- Beyond Covid, other global trends are transforming the world of work. One is automation and technological change which does not necessarily lead to a reduction in employment but it does mean a change in the tasks people perform. Second is the transition to net zero, with new jobs created in new sectors such as electric vehicles. Third, the digital transformation of business, already underway, is being accelerated by the Covid crisis. And, finally, an ageing population is contributing to more people seeking retraining in later life to change careers. In the UK, EU exit is a further factor which will have an influence.
- Data show that skills shortages are costing UK organisations more than £4bn per year, and a lack of access to skills is reported by UK firms as the number one threat to the competitiveness of the labour market. STEM skills are in demand, with nine in 10 STEM businesses finding it difficult to get the skills they need. Digital skills are now a core skill and the demand for these skills will continue to rise, with what were previously seen as advanced skills now being seen as basic skills.
- This implies that everyone needs the opportunities to learn new skills. Around 80%-90% of the 2030 workforce are already in the labour market. Therefore, there needs to be a focus on lifelong learning, retraining and upskilling, enabling people to be adaptable to changes and take advantage of new opportunities. This needs to be a collaborative effort between government, employers and individuals.
- While the world of work in 2030 would look very different to today, it was difficult to predict what the jobs of the future would look like. Instead, we need to focus on the core skills that would be needed. The majority of these were ‘human skills’, and the 2018 Future of Jobs Survey from the World Economic Forum identified a group of these including: analytical thinking, creativity, active learning, problem-solving, leadership, reasoning and emotional intelligence. As the average lifetime of a technical skill is around 18 months, even those companies that rely on deep technical skills will need a workforce able to adapt and learn.
- Despite the importance of these skills, it has been true for many years that both existing and new employees are struggling to demonstrate and develop them. This is true amongst all levels and age groups within organisations. ‘Human skills’ make up seven out of the top 10 skill gaps reported. This is not a new problem. Identified by the CBI in 1989, the UK has failed to make much headway in addressing the problem.
- Such skills need to be embedded across the education system, with opportunities to build these skills throughout the curriculum, and to be able to engage with employers whilst still in education. Providing these opportunities during Covid is a challenge but some good examples exist for remote and virtual internships. However, employers also need to allow their employees to develop these skills throughout their career. These skills can be learned, and coaching and mentoring can be effective. Better job design can also allow staff to use and develop such skills, with support from their managers.