Fixing the Digital Skills Gap

The skills gap is not only a recruitment problem; it is the reason transformation programmes underdeliver against their own business cases.

The size of the problem

65% of IT decision makers report struggling to hire people with the digital skills they need, according to Microsoft, and 37% say work pressure has become very high as a result.

The UK Parliament's Science and Technology Committee has put the annual cost of the skills gap to the UK economy at around £63 billion, in lost productivity, missed opportunity and the training organisations end up paying for anyway. The consequence is not confined to IT. Organisations without those skills are measurably limited in productivity, efficiency, scalability and — over a long enough period — viability.

What it is worth fixing

Two figures make the business case without embellishment. Closing the skills gap is associated with a 26% increase in profitability, and McKinsey put the productivity gain from digital transformation at up to 50%.

That is the return being forgone. The skills gap is not only a recruitment problem; it is the reason transformation programmes underdeliver against their own business cases.

Why hiring alone will not close it

The instinct is to recruit, and it does not work at scale. Everyone is competing for the same shortlist, salaries rise faster than budgets, and the people you hire arrive without knowledge of your domain — which for a housing provider, or any regulated organisation, is a substantial part of the job.

Worse, hiring into a gap tends to concentrate risk. One or two people become the only ones who understand a critical system, and the organisation is more exposed than before.

What works instead

The approaches that hold up are unspectacular and mostly internal:

• Train the people who already understand the business. Domain knowledge is harder to acquire than technical skill.
• Buy capability rather than headcount where the need is temporary — a migration is a project, not a permanent role.
• Reduce the skill required, by standardising platforms instead of running several that each need their own specialists.
• Make knowledge institutional — written down, reviewed, and not resident in one person.
• Look wider geographically. Remote and global working genuinely widens the pool, provided the written record is good enough to work across time zones.

The part organisations skip

Retention. It is considerably cheaper to keep a skilled person than to replace one, and the reasons people leave technical roles are rarely mysterious: outdated tooling, no time to learn, and work that consists of maintaining things nobody will let them improve.

Fixing those costs less than a recruitment campaign, and it works faster.