The UK skills gap is widening. The UK's school leavers are falling behind in basic literacy and numeracy skills. Skilled workers are in high demand, but university graduates lack the technical skills that employers need. This piece from Lewis Silkin comments on how we might stem the skills gap in the UK, move from the standardised low-skill low-pay “low road” economy and head closer to the specialised high-skill high-pay “high road”.

“Skills form the bedrock of every economy”. So says the Organisation for Economic Co-operation and Development. However, despite recent signs of economic recovery in the UK, issues around skills shortages still dominate the headlines - "Skills shortage will hit recovery"“Lack of engineers threatens UK recovery, say industrialists” and "UK at risk of cyber attack in skills shortage".

The skills gap has been a hot topic for some time and the issue shows no sign of waning. Once again, a PwC global survey reveals that business leaders are more concerned than ever about finding the right people to fill vacancies.

Skill survey

The skills set of the UK’s future workforce have also been under the spotlight in recent months, particularly basic skills, such as literacy, numeracy and the sciences. The OECD’s “Pisa 2012 Results in Focus” paper, published at the end of last year, compared 15-year-olds’ abilities in core academic subjects across 65 countries.

The results are troubling for the UK, which ranked 26th in mathematics, 23rd in reading and 21st in science. The UK was out-ranked by European neighbours such as Switzerland, the Netherlands, Finland, Poland, Germany, Estonia and Ireland in every area. Canada, Australia and New Zealand are also performing better. Unsurprisingly, Shanghai was the top-rated jurisdiction in each subject, with Hong Kong and Singapore closely trailing in second and third place. (However the results are not all bad - the UK performs better than could be expected in practical problem solving abilities).

All this indicates that the UK has a lot to overcome if it is to grow and compete effectively in an increasingly knowledge-intensive and technology-driven global economy, where proficiency in literacy, numeracy and problem-solving will be essential.

But is a primary focus on education and skills supply the real route to a sustainable recovery from the recession and long-term competiveness? Not according to the OECD, which calls for skills to be “put to productive use at work”.

Skills gap analysis

Labour productivity in the UK has fallen since the recession and lags well behind the rest of the G7. The UK also has the highest (after Spain) level of demand for workers who have not received education and training beyond compulsory schooling, according to a recent OECD survey of adult skills. 30% of UK workers believe they are overqualified for their job (only Japan reports a higher proportion) and two out of five UK graduates are still looking for work six months after finishing their studies. A survey of 676 graduates found that a third were applying for more than 20 vacancies every month, and almost half (44%) said they regretted not having studied a more vocational subject.

The need to focus on the lack of skills utilisation and lack of demand from employers for higher skilled roles is echoed by the CIPD in a recent research insight “Industrial strategy and the future of skills policy”. The CIPD suggests that the UK is at a crossroads and argues that in order to avoid a drift towards a “low-road” labour market (i.e. a lower-skilled workforce producing standardised goods and services at a low price) the Government needs to implement integrated policies which support a competitive strategy based on a “high-road” model (i.e. highly-skilled workers delivering quality goods and services).

The fundamental nature of work is changing, driven by a combination of megatrends, such as technology and increasing globalisation. The speed of this change is highlighting qualification mismatches and under-utilisation of skills and the impetus for Government to tackle this has never been stronger. Although balancing the equation between skills and demand won’t be easy, finding the right answer can only add up to a stronger and more sustainable economy.

By Lucy Lewis and Katie Honeyfield, Lewis Silkin


Are you encountering a skills gap in your organisation? Is the drift towards the economic "low road" an inevitability? Share your thoughts on strategies for dealing with the skills gap in the comments below.

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