600,000 tech job vacancies costing UK economy £63 billion a year

An estimated 600,000 vacancies in digital technology are costing the country £63 billion a year, according to a report on skills shortages published today (1 August 2018) by the Edge Foundation.

The second of the education charity’s bulletins on the UK’s skills shortages, shines a spotlight on the tech industry and the devastating economic impact of the government’s failure to encourage young people to study relevant subjects and upskill existing workers.

The report’s author, Edge’s Director of Policy and Research, Olly Newton, commented:

‘This bulletin highlights the urgent need for digital and technical subjects to be at the core of our national curriculum to ensure a talent pipeline for the future. If things continue as they are, in a couple of years there will be 1 million tech vacancies in the UK and yet the number of students taking IT and computing GCSEs in schools has fallen by almost 15,000 (11 per cent) in the last year alone.

‘We are currently relying on the talent and skills of people coming from abroad, but clearly with Brexit on the horizon we need a new strategy.’

The bulletin, Skills Shortages in the UK Economy, brings together the most current statistics and analysis of skills shortages in the UK which cost the economy £6.3 billion each year in direct costs such as recruitment and temporarily filling gaps, according to the Open University’s 2018 Business Barometer.

Shadow Skills Minister, Gordon Marsden, commented:

‘These reports provide a robust and thorough analysis of the state of our employment market which can help to inform policy. The scale of skills shortages in the UK is alarming, especially so when you consider that over half-a-million of our young people aged 16-24 are not in education, employment or training.’

The report says clearer career pathways into digital technology are especially important for girls and women. Only 17 per cent of the UK’s IT specialists are female meaning we are barely tapping into half of our potential workforce.

India Lucas is Skill, Talent & Diversity Policy Manager for techUK which represents around the tech workforce in the UK, she commented:

‘In a sector like tech, where we already have a critical digital skills shortage, we simply cannot sit by as large groups of society become alienated from our sector. Tech cannot innovate if the minds behind it all think, act and look the same – diversity breeds innovation. We need to improve the representation of women and other groups in tech and much of this work starts in schools.

‘We must do more to demystify the tech sector to students, teachers and parents; providing students with an insight into how our sector works in practice and one way of achieving this is through quality careers guidance and mandatory work experience.’

In the UK data centre sector, at least one in five key technical roles are filled by non-British staff and employers say that the prospect of Britain leaving the EU is already making it difficult to attract EU staff.

Andrew Stevens, President and CEO of CNet Training, said:

‘We have a shortage of data centre specific skills driven by rapid technological development, a labour shortage as qualified people are drawn away by more well-known sectors such as manufacturing and construction, and a diversity problem in that our labour pool is limited and without a dedicated pipeline.

‘The responses must come from a collaboration between industry apprenticeship providers, higher and vocation education, schools and industry representative groups.’

The Edge Foundation is calling on the Department for Education and BEIS to develop a comprehensive strategy to ensure young people are equipped with the skills 21st century industry is calling for, including:

• Shaking up the national curriculum to ensure creative and technical subjects are at its heart enabling all students the opportunity to develop core tech skills
• Giving schools more resources to give better careers information, advice and guidance and ensure students have a better understanding of the opportunities in the digital technology sector
• Building relationships between local employers and schools to make learning relevant to the ‘world of work’ and ensuring students have the confidence, resilience and key skills to take them to the next level of education, an apprenticeship or into work.

Olly Newton added:

‘If the government is not persuaded by the educational case for curriculum change in our schools, then the economic argument is incontestable. This report summarises the skills crisis in the tech industry and it’s not going away without some bold measures in our schools, colleges, universities and workplaces.’