Addressing the UK’s Skills Gap: A Strategic Imperative

How businesses can implement skills training to stay competitive in a rapidly changing landscape.

The UK is facing a problem of stagnant productivity, with fewer workers taking the opportunity to upskill. According to Santander's Tomorrow's Skills report, the UK workforce is now dedicating 20% less time to training than they did a decade ago. Despite this decline, over half of UK workers acknowledge the growing need to upskill to adapt to future job roles. When it comes to responsibility for professional learning, data showed that respondents believe both Government (48%) and businesses (33%) have a role to play. 

The challenge is clear: according to the World Economic Forum's 2023 Future of Jobs Report, six in 10 workers will need training by 2027, yet only half currently have access to adequate opportunities. As these changes unfold, the question is—are we ready? And how can businesses turn this moment into an opportunity to upskill their teams and address the ongoing productivity challenges?

Bridging the Skills Gap

Since the global financial crisis, the UK has seen considerably slower productivity growth compared to other countries. The United States produces 28% more value added per hour than the UK – and the French and Germans are 13% and 14%, respectively, more productive than their British counterparts.

According to another piece of research from Santander, a shortage of skilled workers is one of the biggest challenges facing UK businesses. 7 in 10 companies say attracting skilled staff is crucial for their growth over the next three years, making it the top priority for success.

Attracting talent involves more than just new hires. There's an urgent need to build a sustainable learning system to support upskilling within the business. McKinsey Insights shows that UK companies must respond to these threats by transitioning up to a third of their workforce into new roles or skill levels over the next decade. If they fail to meet this challenge, they could face even more acute talent shortages than today.

Upskilling as a Business Challenge

According to Tomorrow's Skills, three significant societal shifts have a major impact both on the UK economy and the workforce will need to respond to them:

1. Changing attitudes to work among different generations

Changing attitudes to the world of work amongst different demographics have been widely documented in the UK media recently, not least the supposed preferences and attitudes of younger generations, particularly Gen Z – those born between 1997 and 2012. That includes attitude towards working from home model and its impact on productivity. 

When it comes to navigating a changing working environment, having strong leaders within the team is one of the critical factors for a business to succeed. Upskilled management is essential for achieving better productivity; that's why businesses should focus on creating and sustaining a solid educational system so their staff can be ahead of the game.

2. Potentially far-reaching consequences for the UK economy driven by a new technological wave and AI

A large majority of respondents to Santander's research (87%) believe AI will significantly impact society in the future, with three-fifths (61%) thinking it will affect their jobs. 63% of workers recognise that they will need training to be equipped with new technology as part of their jobs.

AI is not a novelty now, with over half (54%) of workers having used AI at some point in the workplace. However, the economic impact might be more significant than previously thought.

A recent report by Goldman Sachs claims that AI could replace the equivalent of 300 million full-time jobs around the world, suggesting it could be the most disruptive technological development we have ever seen. It also says that new jobs will emerge, which adds to the business leaders' plate in upskilling their employees ahead of time.

3. Transition to Net Zero is shifting from ambition to delivery

Despite missing the 1.5°C global heating target (BBC), the urgency to create clear sustainability roadmaps has only intensified. This shift presents a major economic opportunity, with a Morgan Stanley survey showing that 85% of companies view sustainability as essential for long-term value creation, and half see it as a "very significant" driver of their strategy.

The Climate Change Committee predicts that between 135,000 and 725,000 new jobs could be created by 2030, as sustainability becomes embedded across industries through new business models and strategies that meet growing regulatory and political demands. 

A large portion of the UK workforce will require targeted skills training. Sustainability Unlocked is already supporting businesses and banks in addressing these needs. Santander data highlights that one reason for the lack of awareness around the impact of climate change on the workforce is the limited understanding of how businesses will transition to net zero—and the skills required to support that transition.

For the past four years, xUnlocked has partnered with Santander to build critical skills for their workforce and the wider UK public. Our latest collaboration, the Santander Open Academy, aims to prepare people for a future shaped by environmental and digital technologies, as well as strong leadership—closely aligning with xUnlocked’s mission to equip people and organisations with the skills they need to thrive.

Rethinking Learning for Business 

Companies seeking upskilling often need help with where to begin. If you leave it to your employees, the result may vary. The Future of Lifelong and Executive Education study by Carrington Crisp revealed a mismatch between the skills employers need and what individuals want to develop.

Investing in creating your own comprehensive L&D programmes alone can be expensive and requires a lot of internal resources to manage. As the learning environment is fast-evolving, businesses are pressured to keep up with content updates and educational technologies. 

Despite all the strategic challenges, investing in learning and development still has significant value. For instance, data shows that focusing on L&D for your team can help keep staff—average turnover rates decreased from 37% among staff who had no qualifications to 26.5% among those who had qualifications.

Businesses face a question: How can they invest in learning and development with maximum efficiency? In today's world, learning content should address the needs of both businesses and employees. Thus, they should constantly have access to bespoke and up-to-date content. 

How Can Businesses Achieve Sustainable Upskilling?

Here are a few insights businesses can consider while mapping their upskilling journey. 

• Shift from seeing digital, leadership, and sustainability skills as niches to recognising them as essential for everyone. Businesses should prioritise delivering essential skills training across the entire workforce to foster a culture where sustainability is ingrained as a core value.
• Lean on the best industry experts to provide the most up-to-date insights you can trust. At xUnlocked we believe that expert-led content is the most effective way to demystify complex issues and translate them into skills and capabilities that enable a workforce to shape the future.
• Leverage cutting-edge learning technologies to ensure employees receive relevant, actionable and on-demand skills training that keeps them competitive in a rapidly changing landscape. 
• Think of providing adjustable coverage depth for different stakeholder groups. For instance, executives might benefit from having a high-level overview of the bigger picture. While specialists expand their zone of responsibility, they will take advantage of a deeper dive into the topic. Such things are particularly relevant to complex training like sustainability development. 

Outcomes from a Business Perspective

Curated, expert-driven learning programs tailored to meet the needs of businesses embracing skills such as digital, leadership, and sustainability are essential to building a future-ready workforce. These programs do more than upskill employees; they embed critical capabilities that align with and drive the business's long-term strategy. 

By empowering teams with these must-have skills, companies can confidently navigate change, seize new value creation opportunities, and ensure they adapt and lead in a rapidly evolving world.