Each month, the UK’s unemployment statistics paint an increasingly grim picture, particularly when it comes to young people. Comparing the latest quarter, December 2020-February 2021, with the same quarter pre-pandemic, unemployment for young people has increased by 52,000; that’s 10 per cent.
The pressing question for both government and the private sector is: what to do about it? The policy response must be deeply informed by where future jobs will be. The effectiveness of interventions will be measured by job outcomes, and that means prioritising measures to create the modern workforce of tomorrow. Across sectors there is a remarkably consistent pattern – the importance of relatively new technical skills, as novel technologies mean standard jobs have increasingly large digital components.
In the engineering sector, companies are increasingly relying on digital skills. Large engineering firms like JLR have developed far-reaching digitalisation strategies. This covers the increased use of technology in all roles across the manufacturing process, with engineers becoming well-versed in CAD, artificial intelligence, virtual reality and other digital technologies. The consumer-facing side of these organisations is also increasingly focussed on digital as the primary channel to reach and engage its customers.
A report by CapGemini, meanwhile, suggests that the majority of engineering companies are still undergoing this transformation, with only 21 per cent considering themselves at an advanced stage, and the expectation that demand for skilled talent will continue to exceed supply. In other sectors, companies are increasingly relying on engineered solutions. As an example, Ocado is using a fleet of 3,000 robots to speed up its warehouse operations. By licensing this automation system to other retailers, Ocado has moved up the value chain and become as much a technology company as it is a grocer.
Covid-19 created a step-change in the level of digital delivery and activity for all companies. This boom in cloud technologies and digital engineering is creating new jobs in-step. The foundation for these skills must be laid early on to give young people pathways to fulfilling careers and to meet the rising number of job vacancies.
As we build back better, the skills training required to access these roles must be accessible to people from all backgrounds. Covid-19 has damaged many areas of industry, but the technology sector, in contrast, can lead the national recovery from the downturn caused by the pandemic; by 2025, the UK is predicted to require a further three million technology jobs.
In last month’s Queen’s Speech, the government voiced support for a ‘lifetime skills guarantee’, indicating significant appetite to dial up reskilling, including loans for adults wanting to retrain. While this is very much a welcomed initiative, clearly its success will be judged by the route from education to employment, supporting the sustainable pipeline of jobs of the future.
Vacancy numbers are likely to match, or exceed, that upward curve, with an estimated capacity for 431,000 new jobs in cloud and software engineering roles by 2025. Accordingly, we will need to ensure that young people are equipped with the digital skills that can actually unlock such job opportunities for them in the tech, engineering, and manufacturing sectors. Generation has launched specific programmes that are training young people, oriented around the skills employers need with a focus on specific digital careers, from cloud and data engineering to web development.
Generation is also working with employers to match-make – finding direct placements for those that complete the programmes, from coders to future cloud engineers, connecting trainees with the likes of Sony PlayStation, and the growing industry of consultancies helping large businesses with digital transformation. These programmes have proven highly effective. From the perspective of employers, they provide a pipeline of suitably trained and motivated candidates for jobs they desperately need to fill. For the individuals themselves, these career opportunities are life-changing.
This approach demonstrates that tackling skills gaps and abating youth unemployment is not just up to government. It is essential the various stakeholders that underpin the UK’s digital jobs market, including entrepreneurs, government, employers, charities, and social enterprises, all play their part, sharing resources and connections to form the solution.
The road beyond the pandemic remains uncertain, but one thing is abundantly clear: those from disadvantaged backgrounds will be hit harder by the unfolding unemployment crisis. As such, there must be more investment in provisions for these communities, with a big focus on retraining and upskilling. These provisions can simultaneously align with and support the key growth sectors for the UK economy.
The initiatives being rolled out from central government can make a significant contribution, but only if the private sector fully embraces these innovative models, offering new ways of training that address current skills gaps, while simultaneously widening access to the jobs of tomorrow.
Michael Houlihan, CEO, Generation UK