Edge’s Skills Shortage Bulletins have long highlighted the trend of economic volatility and its effect on the UK skills landscape. If confirmation was needed, our 11th bulletin emphasises just how much unpredictable economic circumstances are now baked into the system, and must be considered in the creation of skills policy moving forward. Our most recent edition aims to identify areas where targeted action can make the most difference.

Employer concerns are reaching critical levels

Employers regularly express concern about the state of UK skills and this year is no exception. The Federation of Small Businesses reports that 80% of small firms face difficulty recruiting applicants with suitable skills. Meanwhile, Open University’s 2022 Business Barometer survey also found that 78% of UK organisations suffered a decline in output, profitability, or growth as a consequence of the skills gap. Most worryingly, though, in July, the Recruitment and Employment Confederation suggested that failure to address labour shortages could cost the UK economy up to £39bn a year from 2024.

The challenge is particularly tough at sector level. The 2021 NHS staff survey highlights numerous concerns, including that the abolition of BTECs in 2023 and 2024 will damage the NHS’s efforts to recruit enough nurses. Compounding the health and social care crisis is a dearth of technical skills in the sector. A shortage of digital skills is impacting the ability of healthcare professionals to manage everything from record-keeping and patient communication to remote consultations. Similar concerns are being expressed in other industries.

What can employers and policymakers do?

In the face of this alarming outlook, The REC has outlined some actions that businesses and policymakers can take. Firstly, they emphasise the impact that improved working conditions, equality and diversity can have on business growth, productivity and revenue. In short, businesses must start treating skills as an investment rather than a cost.

Meanwhile, policymakers have a part to play, too, especially in devolving skills policy or creating more employer-friendly legislation (such as around immigration). One positive move is the DfE’s recent creation of the Unit for Future Skills (UFS). Working across government departments, the UFS aims to share untapped skills and jobs data, ensuring that appropriate training is made available to workers. Although no silver bullet, it is a welcome step.

Young people and their carers: ‘Give us more support’

The 2022 Youth Voice Census revealed that only a third of young people understand the skills that employers want. It also found that the cost-of-living crisis and global political tensions have exacerbated the mental health crisis, compounding unemployment issues. 51% of young people looking for work suggested that anxiety was their biggest barrier to accessing it. Carers, care leavers, Black and transgender respondents were the least confident of quality jobs being available to them.

Meanwhile, research from the Gatsby Foundation found that 71% of parents/carers – young people’s primary source of careers advice – felt overwhelmed by the number of options available to their child. The good news is that Gatsby has developed a free suite of resources, ‘Talking Futures’, to help parents/carers with these conversations.

Opportunities: Harnessing young people’s enthusiasm for green futures

Many young people are passionate about sustainability and are attracted to new roles in green industries. Research from the Learning and Work Institute aims to better understand how to support these young people. It found that while young people and employers both agree that skills for net-zero will be important in the future, most have low awareness of what’s required.

LWI’s research suggests that highlighting the importance of technical skills to decarbonisation could help attract more young people to green apprenticeships, while also building prestige in technical education. Furthermore, marketing campaigns like Get the Jump could help capitalise on the enthusiasm of young people to pursue green skills, helping schools, colleges and universities signpost education and training pathways.

Case study: Bridging the skills gap in the screen industry

As the British screen industry – like many others – faces major skills shortages, the London Screen Academy has taken a proactive approach by introducing a new Level 3 Extended Diploma. Equivalent to three A-levels, it provides LSA students with hands-on experience of the sector. They can access industry skills through applied learning, assessed project work, personal development and enrichment programmes. Cultivating strong industry and alumni ties, the programme also helps students understand what roles are available, offering employers a much-needed talent pipeline. While the solution is screen-industry specific, could similar initiatives have a transformative impact elsewhere?

Download the full report

Although Edge’s latest bulletin highlights some major areas of concern, increased awareness of the issues is undoubtedly the first step towards solving them. Despite the gloomy outlook, there are also opportunities that offer a glint of light at the end of the tunnel. You can access all the insights from our latest report by downloading the bulletin for free.

Olly Newton is Executive Director at the Edge Foundation a politically independent education foundation, dedicated to making education relevant. Olly will be chairing the breakfast session on skills shortages and the future of the labour market at Employment and Skills Convention 2022.