Artificial intelligence is weaving its way into our everyday life. Technological breakthroughs have begun to disrupt our workplaces and will change the jobs that are available in the labour market of the future and the skills needed to do them. The impact of technology, particularly AI and automation, is also likely to be compounded by social, environmental and economic changes, including those brought on by Brexit.
Anticipated changes to the labour market threaten to exacerbate existing skills shortages, which are already a major issue. There are currently over a million job vacancies in this country, with some recent employer surveys suggesting we are seeing unprecedented levels of skills shortages. According to Manpower Group’s most recent talent shortage survey, 77 per cent of employers report difficulties in filling roles, a 17-year high.
Severe skills shortages threaten England’s prospects for economic growth. In 2019, the Open University calculated the cost of skills gaps to the UK economy at £4.4 billion a year, for example in recruitment fees and temporary staffing. More recently, a 2022 report by Skills Builder Partnership put the cost to the UK economy of low essential skills at £22.2 billion. And skills shortages don’t just impact the economy; They have damaging consequences for individuals that cannot access satisfying, well-paid work, and they threaten to widen social inequalities.
Before we can get to grips with this challenge, we need a detailed, data-driven understanding of both future ‘skills demand’ – the skills which will be required in the labour market of the future – and of future ‘skills supply’ – the skills that can be expected to be available. Our findings so far suggest that skills shortages could worsen, implying urgent action is needed to prevent knock-on effects to our economy and society.
Severe skills shortages threaten economic growth
Specialist skills and knowledge are vital in most occupations, but our research suggests it is transferable ‘essential employment skills’ that will be in greatest demand across the labour market in 2035. These skills are anticipated to be in even greater demand across the workforce by 2035 than they are today, and almost 90 per cent of the 2.2 million new jobs that are anticipated to be created in England between 2020 and 2035 will be professional and associate professional occupations, which require higher levels of these skills. Employers are already reporting difficulties recruiting people with these skills, and these shortages may worsen between now and 2035 unless action is taken.
Working with researchers at the University of Sheffield, we identified the six most vital ‘essential employment skills’ for future employment as communication, collaboration, problem-solving, organising, planning and prioritising work, creative thinking and ‘information literacy’ (skills related to gathering, processing, and using information).
These six skills were identified by projecting the skills that will be required in each occupation in 2035 and combining these with future employment projections. To meet future skills demands, we need to support more workers to develop these vital skills and to ensure young people have higher levels of these skills than previous generations when they first enter the workforce.
Our findings also highlight the need for a greater understanding of the supply of ‘essential employment skills’ and the role our education and training systems can play in developing them. Unlike many other countries, the English national curriculum does not define and integrate a set of transferable ‘essential employment skills’. It is time to revisit this and adopt the six skills we have identified as the basis of this list.
In the next stage of the Skills Imperative 2035, we will estimate what the future supply of these essential employment skills is likely to look like in 2035 and predict where skills gaps are likely to arise – including identifying which groups are most at risk of lacking the essential employment skills needed. We will then investigate how the education system can best support the development of these skills.
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