Crossing the Digital Divide: How UK Businesses Can Overcome the Digital Skills Gap and Succeed in the Digital Era

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Digital Dreams: Thriving in the Age of Technology for UK Businesses

The impact of technology on businesses is undeniable, and the UK economy is not immune to its effects. As digital technology continues to advance, companies are challenged to keep up with the pace of change due to the digital skills gap. Recent research from Gallup and AWS reveals that almost 70% of UK businesses struggle to find workers with the required digital skills, putting them at risk of losing their competitive edge. Areas such as data analysis, software development, and cybersecurity are most affected, and this has significant consequences for businesses of all sizes and industries.

The research found that companies that employ advanced digital workers, such as cloud engineers and software developers, consistently outperform nondigital peers, and investing in digital skills delivers big dividends for businesses.
- Gallup & AWS
Chapter two

The Ripple Effect of the Digital Skills Gap on UK Businesses

The digital skills gap is not only a major challenge for UK businesses, but it also has a profound impact on the economy as a whole.

The gap is preventing companies from embracing new technologies, exploring new business opportunities, and achieving sustainable growth. This lack of innovation results in increased costs, reduced efficiency, and ultimately, a decline in the competitive advantage of UK businesses.

£63b
The digital skills gap is costing the UK economy a year in lost gross domestic product
Source
: Parliamentary report
Chapter two

The UK Government's Efforts to Address the Digital Skills Gap

The British government has acknowledged the significance of bridging the digital skills gap and has initiated a £3 billion program to aid companies in achieving this objective. While the 2022 Lloyds Bank Consumer Digital Index reveals that 99% of individuals in the UK utilize the internet, a notable gap persists in digital inclusivity.

To support and enhance the digital economy, the government has introduced a novel digital strategy that could boost the annual GVA of the UK tech industry by an additional £41.5 billion by 2025.

10m
adults in the UK are lacking fundamental digital skills.
Source
: Lloyds Banking Group

In response to the growing digital skills crisis, the UK government has announced the rollout of a new digital strategy that features the creation of a digital skills council. Furthermore, the government aims to have an additional 200,000 individuals in England completing high-quality skills training every year by 2030. However, businesses also have a crucial role to play in augmenting the digital skills of their workers and investing in training programs for future generations. The UK government acknowledges this and is dedicated to working closely with businesses to jointly address the digital skills gap.

Chapter two

The Role of UK Businesses in Overcoming the Digital Skills Gap

Experts are urging UK businesses to adopt a more collaborative and proactive approach towards bridging the digital skills gap.

Investing in the digital skills of current employees and the next generation of workers is crucial for businesses to remain competitive in a rapidly changing global economy.

As the UK faces a digital skills shortage, companies must take a more active role in upskilling their workforce.

The government is also taking steps to incentivise people to develop their skills, such as through the National Skills Fund. The digital skills gap poses a risk of unfilled jobs and hindering the pace of innovation, but companies can tackle this by focusing on skills data, identifying the skills they need, and taking advantage of advancements in HR tech architectures.

Therefore, it is imperative for UK businesses to prioritize digital skills training to address this gap and maintain competitiveness in 2023.

"The gap in basic digital capability in the UK workforce is real and huge. FutureDotNow has revealed, in their new report, that nearly two-thirds of workers would benefit from growing their basic digital skills and they are people at every level, from the c-suite to the shop floor."
- Liz Williams, CEO of FutureDotNow,
Chapter two

Collaborating with Educational Institutions

One of the approaches businesses can take is partnering with educational institutions to provide internships, apprenticeships, or other work-based learning opportunities. This not only provides students with valuable experience, but it also allows businesses to identify and recruit potential future employees. Collaborating with educational institutions can also help businesses gain access to the latest research and technological advancements in their field.

Chapter two

Incentivising to Attract and Retain Skilled Workers

In order to attract and retain skilled workers in the UK, businesses can implement various tactics such as offering enticing bonuses, flexible work arrangements, and non-monetary benefits, which can help cultivate a positive work environment and increase employee satisfaction. Facilitating opportunities for career growth and professional development is also an effective method of motivating workers to develop their digital skills.

UK companies can consider a number of strategies to incentivise skilled workers in 2023, including investing in employee development and advancement, crafting well-written job descriptions, actively listening to employees’ needs, enhancing compensation and benefits packages, prioritizing company culture, conducting skills assessments, implementing new perks to improve employees’ quality of life, and introducing effective employee training and skills development programs.

93%
of employees would stay longer with a company if it invested in their careers, demonstrating the importance of investing in employee growth.
Source
: LinkedIn Study
Crossing the Digital Divide: How UK Businesses Can Overcome the Digital Skills Gap and Succeed in the Digital Era Play Video

There are several strategies that organisations can adopt to retain top talent, including providing growth opportunities, creating a positive workplace culture, offering competitive compensation and benefits, recognising and rewarding employees, and providing work-life balance.

A culture that fosters diversity, equity, and inclusion, open communication, and employee engagement can boost morale and make employees feel valued and appreciated, leading to better retention rates.

Providing flexible schedules, remote work options, and paid time off can also help employees achieve a healthy work-life balance. Overall, by investing in their employees and prioritizing employee well-being, growth, and recognition, organizations can retain their best employees and drive long-term success.

Investing in employee training and development programs can also have a significant impact on employee engagement.  

33%
of employees are actively engaged in their work, with the rest either not engaged or actively disengaged.
Source
: Gallup study

However, when employees feel that their employer is investing in their personal and professional growth, they are more likely to be engaged in their work. This can lead to increased job satisfaction, higher morale, and ultimately, increased productivity.

Investing in employee training and development programs can also lead to increased productivity. When employees have the skills and knowledge they need to perform their jobs effectively, they are more likely to be productive. According to a study by the Association for Talent Development, companies that invest in employee training and development programs have 218% higher income per employee than companies that don’t invest in such programs.

At Beagle, we have done research on the right salaries to pay across of variety of industries we specialise in. You can download our latest Salary & Benchmarking Survey 2023 benchmarking report for 2023 here

Chapter two

Challenges to Overcoming the Digital Skills Gap

The digital skills gap is a pressing issue for UK businesses, but addressing it comes with several challenges.

Digital transformation has become crucial for organisations to remain competitive in today’s market. However, companies face several significant challenges when transitioning into the digital space. One of the primary challenges is the scarcity of integration specialists who possess the core competencies necessary for the transition, such as data integration, analytics, enterprise architecture, and digital experience.

Therefore, businesses must invest in developing talent with the necessary skills to facilitate digital transformation successfully. A lack of a well-defined change management strategy [3] can also impede digital transformation efforts. Without a robust change management strategy, businesses may struggle to manage the cultural shift that comes with the transformation, leading to resistance from employees and other stakeholders.

Siloed decision-making and a lack of a defined strategy pose significant obstacles in nearly every aspect of transformation, from strategy building to implementation. Organisations need to break down silos and adopt a collaborative approach that encourages communication and cooperation between departments.

Another challenge organisations face is the shortage of leadership and talent for digital transformation. Businesses must invest in leadership and talent development to drive innovation and digital transformation initiatives. Additionally, a significant portion of the population still has the lowest digital skills, presenting a challenge of digital inclusivity for businesses. Companies need to consider this aspect when creating their digital transformation strategy and find ways to include those with low digital skills in the process.

Lastly, healthcare and life sciences industries face the challenge of integrating systems and developing a holistic view of the enterprise, which requires low-code technology platforms that support fast and easy integrations. These industries must adopt digital solutions supporting seamless integrations across systems to ensure data consistency and integrity.

In conclusion, the digital skills gap presents several significant challenges for businesses, from the scarcity of integration specialists and leadership to issues of digital inclusivity and integration in specific industries. Addressing these challenges is crucial for businesses to remain competitive and successful in today’s digital landscape.

Chapter two

The Benefits of Investing in Digital Skills Training

As the UK economy becomes more reliant on technology, investing in digital skills training is crucial for businesses. Not only is digital technology projected to contribute £232 billion to the UK economy by 2025, but it is also essential to develop digital skills in the workforce to remain competitive in a rapidly changing global economy.

However, the benefits of investing in digital skills training extend beyond just the economy. According to a report by the World Economic Forum, businesses that invest in training and upskilling their employees are more likely to retain top talent, improve employee engagement, and increase productivity.

Based on the provided search results, investing in digital skills training can benefit individuals and organisations. Digital skills training can be a retention tool for businesses to attract and retain skilled workers, provide a competitive edge, offer flexibility with online courses, and address societal challenges such as healthcare, social protection, education, and sustainability.

Moreover, digital skills training can help individuals increase their employability prospects, advance their careers, and boost their morale, leading to higher employee engagement and retention rates.

In the long run, investing in digital skills training can also lead to improved organizational performance and innovation, among other benefits.

By investing in digital skills training, businesses can stay ahead of their competitors and create a skilled workforce capable of adapting to the challenges of the future.

Chapter two

Overcoming Challenges to Digital Skills Training

Despite the many benefits of investing in digital skills training, businesses face several challenges when it comes to implementing these programs. One of the biggest challenges is the cost of training programs. Developing and implementing effective training programs can be expensive, especially for smaller businesses with limited budgets.

Another challenge is finding qualified trainers. Digital skills are constantly evolving, and businesses need trainers who are up-to-date with the latest trends and technologies. Finding trainers who have the necessary skills and experience can be difficult, especially in areas where the demand for skilled workers is high.

To overcome these challenges, businesses can explore options such as making training programs more affordable or partnering with educational institutions to train their employees. Online training programs and resources can also be an affordable and convenient option for businesses.

Chapter two

Conclusion

The digital skills gap poses a significant challenge to the UK economy, as businesses become increasingly reliant on technology in the workplace. Therefore, investing in digital skills training is crucial for businesses to remain competitive in a rapidly changing global economy, retain top talent, improve employee engagement, and increase productivity. Despite the challenges that come with implementing effective digital skills training programs, startups can take steps to bridge the gap and ensure they have the necessary talent to succeed in the digital age.

To attract and retain digital talent, startups should prioritise investing in digital skills training for their employees, partner with industry experts, and prioritise digital skills when hiring new employees. Offering competitive compensation and benefits, such as flexible work arrangements and company-sponsored professional development and training opportunities, can also make startups more attractive to digital professionals.

Overall, hiring digital talent is becoming increasingly important for companies in all industries. By implementing strategies to attract and retain top digital talent, startups can build a talented and diverse team that can help them achieve their business goals in the ever-changing digital landscape.

Chapter two

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Chapter two

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