UK Tech Skills Shortage: Four Potential Solutions


Rich Wilson
March 13, 2024

The UK’s Tech Skills Shortage

In recent years, the United Kingdom has experienced a shortage of skilled technology workers, creating significant challenges for businesses and organisations that rely on technology to drive growth and innovation. This trend is not unique to the UK and is being seen globally, with the increased adoption of digital technology by businesses and individuals. A recent Hays survey found that almost 95% of employers looking for tech talent have encountered a skills shortage over the past year.

According to a recent report by the Tech Talent Charter, a non-profit organisation dedicated to increasing diversity in the UK technology sector, the UK is currently experiencing a shortfall of 600,000 technology workers, a number that is projected to rise to 1.2 million by the end of 2023. This shortage is creating significant challenges for businesses and organisations in the country, which are struggling to fill key technology roles with qualified tech professionals.

Contributing Factors to the Shortage of Tech Skills

One of the primary factors contributing to this shortage is a lack of investment in technology education and training. According to a report by the UK government, the number of students studying technology subjects has declined by 23% over the past decade, leaving a significant skills gap in the workforce. This is compounded by the fact that many technology workers are nearing retirement age, leaving a significant void in the talent pipeline. A recent survey by Robert Walters stated that Cyber Security (56%), BI & Data Management (41%) and Software Development (35%) are the most sought after skills this year.

Another contributing factor is the competition for talent from other countries, with many highly skilled technology workers choosing to work in other parts of the world. According to a survey by the British Chambers of Commerce, 53% of UK businesses report that they have difficulty finding the technology talent they need, and 25% of businesses say that they have lost highly skilled technology workers to other countries.

Impact of the Tech Skills Shortage on the UK Economy

The shortage of skilled technology workers is not just a problem for businesses and organisations, but for the wider economy as well. According to a report by the Centre for Economics and Business Research, the UK economy could lose up to £141 billion in GDP growth by 2028 due to the technology skills shortage.

Government Initiatives to Address the Tech Skills Shortage

To address this challenge, the UK government has taken several steps to encourage the development of technology skills in the workforce. In 2018, the government launched the Industrial Strategy, which includes a focus on developing the skills needed for the digital economy. The government has also invested £170 million in the development of digital skills courses, and has launched a new National Retraining Scheme to help workers transition to new technology jobs.

The Importance of Hiring Tech Skills for Digital Transformation

The demand for technology talent is increasing rapidly as companies increasingly digitally transform their operations and strive to stay ahead in the ever-evolving technology landscape. Many organisations need to hire tech talent quickly to support their digital transformation programmes. Failure to do so could result in the failure of these initiatives, potentially causing significant financial losses and damage to the organisation’s reputation and ability to compete globally.

Innovative Hiring Strategies for Tech Skills Shortages

According to McKinsey, 70% of digital transformations fail due to a lack of skilled talent. Therefore, many CEOs are under immense pressure to attract and retain the right talent for their digital initiatives. The Gartner report announcing “Quiet Hiring” as the key Future of Work trend for 2023 is a testament to this growing demand for tech talent.

Another option is to upskill or reskill existing staff. This can be done through training and development programs that focus on building skills in high-demand areas such as data science, cybersecurity, and cloud computing. This approach is particularly useful for organisations with a shortage of tech talent, as they can tap into their existing workforce and upskill employees to fill vacant roles. This is something BT and SKY have implemented successfully with cyber security and data roles.

One option for organisations to hire tech talent quickly is through internal mobility. This involves identifying existing employees with relevant skills and providing them with additional training and development opportunities to fill in-demand roles. This approach not only addresses the talent shortage but also has the added benefit of retaining existing staff, boosting employee morale and loyalty.

Contingent talent, such as freelancers or contractors, is also becoming increasingly popular as a quick way to hire tech talent. These individuals can be engaged on a project-by-project basis and offer specialised skills and expertise that may not be available within the organisation. This approach is particularly useful for organisations with fluctuating demand for tech talent or those who require specific skills for a short period. Over 70% of Fortune 500 utilise on-demand talent platforms to hire scarce tech skills quickly.

Finally, organisations can tap into universities to hire tech talent. By partnering with universities and offering internships, apprenticeships, or graduate programmes, organisations can attract fresh talent and develop skills within their workforce. This approach also offers the opportunity to shape and mould new talent according to the specific needs of the organisation. Many universities now offer project teams of Masters and PHD students for projects including data science, blockchain and software development. This is something Amazon has utilised in the UK with data scientists for over 10 years.

In conclusion, the shortage of tech talent is a significant challenge for organisations, particularly those undertaking digital transformation initiatives. To address this challenge, organisations need to adopt innovative hiring strategies, such as internal mobility, upskilling/reskilling, contingent talent, and tapping into universities. By adopting these strategies, organisations can hire tech talent quickly and effectively, enabling them to remain competitive in the digital age.

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