Digital skills shortages affecting Scotland’s workforce

Over the past few years, productivity has been hit hard in the UK due to the lack of certain skills in the country.

Research has shown that basic digital skills are required for almost every single job, which ranges from farming, where software is used to maintain livestock records, to car mechanics, where technology can detect vehicle defects. 

Given digital skills are becoming a necessity for most jobs and are required at almost every level of an organisation, it’s imperative that employers demonstrate digital thinking and leadership to encourage economic growth. 

Organisations are becoming more digitally literate, and so employees are continually having to learn new skills.  Even the most ‘low-skilled’ jobs advertised in Scotland now require basic digital skills such as knowledge of word processing and spreadsheets.

This is an ongoing issue as 23% of people over the age of 15 are not competent in all the seven technical skills at foundation level. To enable them to develop skills that are considered crucial for employment, they need to be competent in all seven foundation levels.

How Scotland can benefit?

A recent survey by CBI Scotland stated that if organisations in Scotland adopted new technologies and everyone became more competent in digital technology, the Scottish economy could benefit by £25 billion over the next ten years. 

Each year the Open University publishes The Open University Business Barometer, which assesses skills shortages across the UK and the impact it has on organisations of all sizes and structure.  Their latest survey in 2022 found that, of all companies surveyed in Scotland, 86% have struggled to find skilled workers over the last year.

It was also revealed that the shortfall of relevant skills is costing Scottish organisations an unbelievable £353 million a year to ensure they remain productive. This incorporates recruitment fees, temporary staff, increased salaries, and training staff who were initially employed on a lower level. (Source: Open University) 

In 2018, the Open University survey found that, due to a skills shortage, organisations had spent an incredible £6.3 billion on temporary workers, recruitment fees, inflated salaries, and training. The report highlighted that training is the key to provide long-term solutions to help address the skills shortage, and ultimately ensure that the UK remains competitive on the global stage.

Companies unable to meet increased salaries

Companies have become aware that the recruitment process is taking much longer due to agencies trying to source relevant skilled workers, which means that Scottish businesses are spending an additional £70 million compared to previous years. This means that when they do find individuals who are matched perfectly to the skills required, they can command inflated salaries –  in fact, it was reported that £81 million more was spent on salaries. (Source: Open University)

This can be problematic for employers who are simply unable to meet these demands and have no choice other than to withdraw the job vacancy and instead opt for in-house training.

Skills shortages have not only affected companies in Scotland financially, as many have also admitted they are unable to adapt to changes in an evolving environment as expeditiously as they’d like to. Senior management positions have been the most difficult to fill, which is particularly problematic given people in these positions are crucial to making these changes happen.

Advisory group looking into the skills shortages

The Advisory Group on Economic Recovery (AGER) was set up at the beginning of the pandemic and reported concerns about skills not being fully utilised in the Scottish labour market, despite Scotland having a highly-qualified labour force. 

It also found specific gaps in digital technology predominantly in retail, hospitality, and agriculture.  That said, not all their findings were negative as some success was noted in addressing the future skills pipeline.

For example, the launch of the Digital Start Fund three years ago, which was set up to give opportunities to individuals on low or no incomes who had not recently been involved in further or higher education. This allowed them to develop new digital skills and began to target the skills gap in the digital technologies sector.

Reduced training opportunities during pandemic

Over half of the country's workforce have admitted that since the pandemic two years ago, they’ve had no professional development or training, which has contributed to the skills shortage. Organisations now need to focus on in-house training, in addition to sourcing skilled individuals externally. 

The lack of training in many organisations may be a direct result of remote working. However, this must be balanced with the benefits that come from working from home, specifically when allowing companies to consider skilled individuals from further afield, even in different parts of the country. More and more people are preferring to work remotely and many providers also offer remote courses, enabling the perfect environment for continuous professional development. 

Longer-term planning for the digital skills shortage

As well as training current staff, we should look into addressing the skills shortage for the next generation. Introducing digital technology skills to children from an early age will help them learn basic instructions, communication and problem solving. More broadly, it will give them an understanding of technology and ultimately a career requiring those skills. 

Developing technology skills in adults is also crucial as these skills relate to all sectors of our economy. It is imperative that people are encouraged to update their skills regularly, particularly as technology is constantly changing. It will also, in turn, lead to increased job satisfaction and increased confidence within the workforce to do their job to the best of their ability.

Scotland's digital development

Scotland is on a mission in terms of developing our digital capabilities. Scottish Development International is in the throes of promoting Edinburgh to ‘data capital of Europe’, whilst Glasgow is one of the UK’s biggest technology investment hubs.

Research has also shown that there are 11,200 tech companies accounting for £6.5 billion each year, and with 100,000 people across Scotland’s digital and technology industries, the technology industry is essential to the economy. (Source: Scottish Economic Statistics 2021, Scottish Enterprise) 

CodeClan offers an ‘Access to Tech’ course, that introduces students to data and software development.  If you’re eligible (i.e. over 25, live in Scotland and haven’t graduated within the last 12 months), you can apply for the Digital Start Fund. This is an incentive to assist unemployed people and those on low incomes and grants up to £8,000, to cover training in digital fields including software development and cyber security.  Once trained in these fields, opportunities are opened for well-paid careers with long-term security.

What is PDMS doing to help tackle the situation?

Given the increasing demand for skills in technology, PDMS is keen to get involved in bridging the skills gap in Scotland.

One of our main initiatives was to join the The Digital Critical Friends Programme which our Project Manager, Fiona Anderson, used her experience to join recently. This scheme was set up four years ago to help industries form valuable relationships with local schools, which in turn inspires more young people to pursue a career in tech.

Fiona was matched with a local secondary school for twelve months, initially meeting online due to Covid restrictions, for regular, weekly informal conversations. Her role provided a useful insight into the projects we are working on at PDMS and the areas where we see an upcoming demand for digital and technical skills.

It also allows students who have considered a role in tech to ask questions to understand the industry and requirements more fully. They were able to query the projects PDMS is working on and use this knowledge to help them decide if technology is an area they should pursue. We hope the sessions were useful and look forward to welcoming these students into the technology industry in the near future. 

What does the future look like?

Companies will have no choice but to address the issues resulting from the aftermath of the pandemic and focus on how they will deal with the skills shortages to fundamentally bridge the gap in technology across all sectors of their organisation.

It’s often difficult to know whether a career in digital and technology is right for everyone.  But given there’s a big demand for talent, and a lot of hype around digital careers, it’s worth considering for anyone who’s interested.

If you would like to learn more about the digital opportunities at PDMS, visit our careers page for more information.