Riaz Moola, Founder and CEO at HyperionDev, explains why upskilling the UK’s tech workforce will have long-lasting benefits.

The UK’s tech sector is increasingly facing up to a harsh reality: an overreliance on international workers is masking a nationwide skills shortage.

Recent data from the Home Office underscores the gravity of this situation, revealing that the technology industry accounts for approximately a sixth of all skilled worker visas issued in the UK. This dependency is particularly acute in roles such as programming and IT business analysis, where demand far outstrips the supply of local talent.

In response, the newly elected Labour government has signalled its intention to reassess the current approach to overseas hiring in the technology and engineering sectors. This move comes as part of a broader strategy to address the underlying skills gap within the UK’s domestic workforce. And as the tech industry continues to evolve at a rapid pace, the need for a sustainable solution to this talent shortage has never been more pressing.

In this article, I’ll look at the current state of the country’s skills gap, while also exploring what’s being done latterly to bridge it.

The current skills gap in the UK tech sector

When it comes to the tech skills gap, recent studies have painted a stark picture of the challenges faced by UK businesses. As an example, the 2023 IT Skills Gap report by Forbes Advisor suggests an overwhelming 93% of UK businesses acknowledge the gap exists within their organisations. This shortage isn’t just a minor inconvenience; it’s a significant hurdle for growth and innovation.

The competition for talent is fierce, with 35% of companies citing it as a major challenge. This scarcity of skilled candidates, relative to the high number of opportunities in the tech sector, has turned recruitment and retention into a hugely difficult task.

And the issue extends beyond specialised IT roles, too.

The 2023 Consumer Digital Index, commissioned by the Department for Education and conducted by Lloyds Bank, revealed a broader digital literacy problem. It found that 7.5 million people – 18% of UK adults – lack the essential digital skills needed in today’s workplace.

This, then, is a gap that not only affects individual employability, but also one that hampers the overall digital transformation of businesses – and the economy at large.

The rise of skills-based hiring

To address this gap, a growing number of companies are shifting their recruitment strategies, placing greater emphasis on skills rather than traditional experience when evaluating candidates. This trend towards skills-based hiring is rapidly gaining traction as businesses seek ways to build high-performance teams in today’s market.

The Hays UK 2024 Salary and Recruiting Trends Guide offers compelling insights into this shift. With 92% of employers reporting ongoing skills shortages, many are adapting their workforce strategies to focus on competencies rather than conventional qualifications. This approach isn’t just a stopgap but a strategic response to the impact that skills shortages are having on businesses. The guide reveals that these shortages negatively impact productivity for 52% of employers, lower employee morale for 48%, and reduce project delivery capabilities for 42%.

This pivot towards skills-based hiring represents more than just a change in recruitment tactics; it’s reshaping the entire job market.

Companies embracing this change stand to gain a competitive advantage, tapping into previously overlooked talent pools, and encouraging increased innovation and productivity. As the job market continues to evolve, this skills-first approach may well become the new norm, offering fresh opportunities for both businesses and individuals to thrive in an increasingly tech-driven economy.

The role of edtech in bridging the skills gap

With the change in the way companies recruit, there’s also space for collaboration between the government and businesses to upskill the workforce.

Currently, people are missing out on potentially lucrative jobs in the tech sector due to not meeting the skills requirements of the role. We believe this trajectory can be reversed, however, through increased investments in mentorship, training, and skills-focused education.

Edtech companies are already playing a crucial role in helping to redress this balance in the workforce, but there’s so much more that could be done. And that’s where public-private collaborations become essential.

At HyperionDev, we strongly hope the government will support businesses by facilitating partnerships between educational institutions, tech companies and training providers. According to our Graduate Outcomes Report 2024, 88% of graduates were employed within six months of completing a skills bootcamp. Therefore, with the right support, new Labour policies can support scalability and adapt to rapid technological changes, while encouraging a new kind of culture that will keep businesses competitive and innovative.

Governmental efforts to overcome the current problems

With the launch of Skills England, as a direct result of the introduction of the Skills England Bill, we’re seeing a significant opportunity for the transformation of the UK’s skills landscape.

This initiative, spearheaded by the Labour Government, aims to bring together businesses, providers, unions, and other stakeholders to boost skills training and address shortages, ultimately supporting sustained economic growth.

A key component of the bill is the simplification of the skills system. This will involve transferring responsibilities from the Institute for Apprenticeships and Technical Education (IfATE) to Skills England, streamlining processes and increasing efficiency in the sector.

All in all, this has the potential to create a more responsive and effective system for addressing the UK’s tech skills gap, paving the way for a brighter future in the country’s tech landscape.

The future of the UK tech sector

A skilled workforce is fundamental to economic growth and innovation, and the efforts to develop homegrown talent could lead to significant advancements. If the new government can effectively implement its upskilling initiatives, we can expect to see enhanced public-private partnerships, improved employment rates and accelerated technological progress.

The real pay-off is that this strategic focus will future-proof the tech industry in the UK for years to come, preparing upcoming generations for emerging challenges, while giving today’s workforce a far better chance of grasping current opportunities.