Inadequate Investment Leaves British Businesses Exposed to Digital Skills Gap
- Almost half (47%) of UK employers think their organisation would be more productive if the level of digital skills was higher
- However, businesses are only investing an average of £109 annually per employee on digital skills training, leaving them at risk of falling behind more digitally advanced competitors
- A third (34%) of UK employers admitted they find it difficult to implement the right training to digitally up-skill their workforce
- 40% of employers say their organisation relies on younger employees and graduates for the digital skills they require, bypassing the need to train up mid-level employees
British businesses are not doing enough to boost employees’ digital competence, according to new research commissioned by Barclays. While almost half (47%) of all businesses believe better digital skills would lead to a more productive workforce, investment in digital upskilling remains low at only £109 per employee among medium and large businesses.
The survey of UK employees and employers found that businesses have struggled to digitally upskill the workforce, as a third (34%) of employers find it difficult to implement the right training to address the current lack of digital skills. Instead, two-fifths (40%) of businesses opt to hire younger, more digitally savvy employees to address the digital skills gap, with 45% of organisations admitting to believing that older employees are often slower to pick up digital skills. A third (33%) of employers consider only a small proportion of their employees as having the digital skills they would expect of them given their role.
More than a quarter (27%) of employers surveyed considered knowledge of data and device protection a priority digital skill to look for when hiring new employees, exposing heightened concerns amongst British businesses around cyber and information security. Other digital skills that are a high priority for organisations are as follows:
- Ability to analyse large data sets (23%)
- Use social media effectively (21%)
- Use cloud-based tools and services for collaboration and storage (20%)
- Basic design skills (19%)
- Basic knowledge of building a website (16%)
- Coding skills (15%)
- Ability to produce video content (10%)
However, in spite of this mounting concern, businesses are not making the necessary investments in digital training, planning on increasing investment in digital skills by only 19% over the next five years.
The squeezed middle
The deficit in digital skills is most apparent in medium-sized organisations, where almost half (45%) of all employers think only a small proportion of fellow workers in their organisations have the digital skills they would expect of them for their role – significantly higher than the average (33%).
However, these businesses are also the most aware of the need to invest in digital skills; almost two-thirds (63%) of medium-sized employers believe their organisation would be more productive if the level of digital skills was higher, with over a third (35%) claiming that digital skills are one of the top attributes they look for in a new recruit, higher than any other sized business.
Employer concerns are echoed by employees
Employees at medium-sized firms are the most concerned of any size of business about reduced productivity through lack of digital skills (38%), being overlooked for promotion (42%), being shown up by the younger generation (37%), and redundancy (40%).
The fear of being replaced by a younger, digitally savvy employee is reflected by the fact that almost two thirds (59%) of medium-sized business owners say they rely on hiring younger employees and graduates to address the lack of digital skills, a figure significantly greater than the average (40%).
Despite feeling concerned at a lack of digital skills, a significant proportion of employees are still not taking steps to upskill themselves; almost half (47%) of all employees asked have never taken steps to boost their digital capabilities, while out of those that have only 16% have done so in the last year.
Of those that have harnessed the opportunity to boost their digital skills, 63% of employees in medium sized businesses say it has had a positive impact on their career progression; and an overwhelming 68% said it has improved their ability to do their job, showing there is much to gain on both an individual and business level from investing in digital skills.
Ashok Vaswani, CEO of Barclays UK, said: “The digital revolution is having a profound effect on our lives by dramatically changing the way we live and work and interact with one another. Although in many ways this is empowering, it can also be challenging, because it requires people and businesses to acquire, retain and consistently develop new skills and understanding to truly benefit. At Barclays, we began this journey by focusing on helping colleagues build digital skills. We are committed to Barclays continuing to play a major part in making Britain the most digitally empowered nation on earth, sharing our own insights with our customers and with businesses of all sizes.
“Together with government, businesses and society as a whole, we need to raise our sights beyond basic inclusion and aim to create a Britain of true digital confidence at all levels of the workforce. We are at a tipping point when it comes to digital skills and the UK must act now to ensure we are not left behind.”
 Survey conducted by Opinium Research in February 2016 among 507 UK business decision makers and business owners and 2,004 nationally representative UK adults (aged 18+)
 The research found that medium and large businesses (50+ employees) spent an average of £36,920 on digital skills training in 2015. According to the BIS Business Population Estimates (BPE) for the UK and Regions 2015, there are 39,520 businesses at 50+ employees in the UK, employing a total of 13,443,000 people:
£36,920 x 39,520 / 13,443,000 = £109
 Businesses invested an average of £20,554 in 2015 on digital skills training and plan to invest £24,373 over the next five years in either digital skills training or recruitment, representing an increase of 18.58%
 The survey categorized medium sized business as having between 50 and 249 employees.