UK skills shortage update: The latest data on the current state of play

Olly Newton, Executive Director at the Edge Foundation


21 10 2021


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Covid-19 has thrown the UK’s existing skills shortages into stark relief. As the education sector and wider economy tentatively emerge from the pandemic, Edge’s latest Skills Shortage Bulletin takes stock of the current situation. As expected, there are some hard realities to face. However, the story is not as terrible as might have been predicted just 18 months ago.

Youth Unemployment

Youth unemployment remains a core challenge, as highlighted by research from the Resolution Foundation. Over 40% of younger and lower-paid workers (especially in hospitality and retail) and those previously on insecure contracts were affected by lockdown. Thanks to support measures, such as the job retention scheme, pandemic-related unemployment rose far less than during the 2008 financial crisis. Nevertheless, by early 2021, one-in-four adults reported experiencing some kind of negative employment change, like losing their job or being furloughed.

Fortunately, employment improved markedly for younger workers after the economy reopened in the spring. Older workers, though, are still struggling to transition back into work – by June 2021, employees aged 60+ were being furloughed at the highest rate of all age groups. Broadly speaking, the worst effects of the pandemic seem to be abating but we cannot rest on our laurels. Policymakers must focus on longer-term gains – a return to pre-pandemic norms is not enough.

Early careers opportunities and apprenticeships

Youth Employment UK’s Youth Voice Census offers invaluable insight into the experiences of the generation worst affected by Covid. The 2021 census received over 3,400 responses from young people aged 14-24 – the highest response rate to date. The results underline the significant (and interwoven) issues of mental health and reduction in access to high-quality education and career opportunities. Despite having services, opportunities and systems designed to support them, young people feel disconnected from these.

In terms of skills themselves, young people rated teamwork (76.9%), listening (67%) and problem-solving (66.9%) as the most important for work. However, there’s a marked reduction in careers support and the skills development they need to find quality jobs. Only 9.9% of respondents felt confident accessing quality work in their region. However, the census was not all bleak. Apprenticeships fared well: 85.8% of young people had apprenticeships discussed with them in school. And 84.7% of those who undertook one rated it as ‘Good’ or ‘Excellent’. The seed, perhaps, for improved vocational training in the future?

Improving transferable skills

While Covid-19 has reshaped the economy, evidence suggests that other shifts are afoot, too. Following the pandemic, City & Guilds Group reveals that 34% of Britons want to change careers. However, only 16% understand how their skills might transfer to other roles. 32% have no idea where their current skillset might be useful, and when asked to consider moving into new industries, 34% were concerned about starting over.

Behind these challenges, though, the report illuminates certain ‘step into’ roles. These would allow people in at-risk jobs to step into new careers with similar skillsets and potentially higher pay. However, the necessary skills gaps must first be bridged. To tackle this, City & Guilds has launched a series of short courses, initially focused on the social care, construction and digital & IT sectors. Let us see how these fare.

Boosting basic skills

Finally, as we all know, the pandemic has highlighted the significance of so-called ‘low-skilled’ labour. Research from the Centre for Progressive Policy suggests that a focus on boosting basic skills for those without formal qualifications could be a vital engine for recovery. They found that a 10% drop in those lacking formal qualifications in local populations was associated with a 2.6% rise in the employment rate. Significantly, this rose to 3.3% in the most deprived areas.

Birmingham, for instance, has a prosperous economy but high levels of deprivation and low basic skills: about 13% of the working-age population lack formal qualifications. Reducing this to 3% could boost employment numbers in Birmingham by 28,800. Compiling similar statistics from around the country hints at a potential national employment boost of over half a million. Non-learning interventions (e.g. careers counsellors or free childcare) could be highly effective in supporting this shift. Globally, evidence points to these interventions paying for themselves many times over. But will policymakers have the nerve to adopt such bold approaches?

Although the pandemic has consistently exacerbated existing labour market inequalities, it’s encouraging to see headway being made in certain sectors. But more needs to be done. While we should celebrate positive data, we must be mindful that skills shortages are more than headline figures—they affect an individual’s quality of life. We have a moral imperative to act, as well as an economic case. The time to address these problems is now.

Edge and Learning & Work Institute are members of the Youth Employment Group which was set up in response to the COVID-19 and its impact on young people’s engagement with education, employment and training.

Olly Newton is Executive Director at the Edge Foundation. Edge is an independent education charity dedicated to making learning relevant.