Research Identifies the Digital Skills needs of Worcestershire businesses

A research report has been published for Worcestershire setting out the recommendations for delivering training that meets the needs of local employers.

The research has been commissioned as part of the Skills Support for the Workforce Programme which Serco’s Employment, Skills & Enterprise business manage in Worcestershie and which is co-financed by the Education and Skills Funding Agency (ESFA) and the European Social Fund. The ESFA commissioned Serco to conduct research to understand employers’ digital skills needs and barriers to training in Worcestershire.

The findings of the research provided recommendations for training providers and others working in the skills environment to consider as part of their future planning for skills delivery in Worcestershire in order that it meet current employer needs.  

The key findings are:

Incidence of digitalisation

• The impact of the pandemic has accelerated digitalisation in the workplace, particularly remote working and e-commerce, and in sectors where it was previously less common e.g. construction and education (through virtual learning environments). Digital technologies have sometimes been adopted quickly due to the pandemic. This means there are opportunities to improve their use and maximise their value; for example, through greater use of analytics in social media activity.
• Digital marketing and cloud-based computing are seen as relevant by nearly all employers and are the technologies with the greatest current and predicted future use amongst Worcestershire employers. A lower proportion of the smallest businesses responding to the survey (those with 0-4 employees) were using cloud-based computing. 
• There is also widespread use of e-commerce and expected growth in this. There was a specific call from one stakeholder for greater support with the use of online sales platforms.
• About half of employers were using or expecting to extend use of CRM. There appears to be higher levels of use amongst businesses in the professional, scientific and technical activities sector.
• The evidence review noted that digitalisation has productivity benefits. In particular, digitalisation has a greater impact upon productivity in manufacturing than service firms. Adoption of digital technologies also leads to a greater improvement in productivity in industries with a high share of routine tasks, potentially through streamlining production processes.

Business preparedness on cyber security

• About four in ten employers surveyed said that they outsourced cyber security, with this appearing most common amongst manufacturers.
• Almost all survey respondents were confident about their ability to create back-ups of files and data and to control which users have IT or admin rights. There was a more mixed picture for the other cyber security tasks explored in the survey (setting up software to update automatically where possible, choosing secure settings for devices or software, restricting what software can run on the organisation’s devices, storing or transferring personal data securely, using encryption where appropriate). Employers reported the least confidence in: setting up firewalls with appropriate configurations and detecting and removing malware on the organisation’s devices.
• Amongst survey respondents, the smallest businesses tended to be least confident in their ability to perform cyber security tasks. National evidence shows that cyber security skills gaps are greatest amongst construction, retail and wholesale businesses.
• The majority of employers had not undertaken any analysis of cyber security training needs or any actual cyber security training in the past twelve months.

Digital skills gaps

• The research suggests there may be a fundamental issue whereby some employers may not actually have a good understanding of their digital skills gaps. Stakeholders highlighted the need for better understanding of the opportunities of digitalisation for businesses at the leadership level in many businesses. This would then support understanding of digital skills needs. A CBI report found that digital skills are needed across organisations i.e. at senior level, not just in specialist roles.
• A third of employers had reviewed their digital skills needs as a result of the pandemic.
• Only a quarter of employers reported having no current nor expected digital skills gaps. About half of employers had - or expected to have within the next five years - four or more distinct digital skills gaps.
• In terms of the nature of digital skills gaps, cyber security was the most commonly reported digital skills gap amongst Worcestershire employers. There was also a widespread skills gap in digital marketing and sales. However, there were skills gaps for at least three in ten employers in all the areas explored by the survey, including: ICT operations and user support; software and applications development; advanced technology maintenance; and data analytics. The evidence review identified a large and growing demand for data analytics and software development.
• There was variation in the incidence of digital skills gaps by size and sector. In the employer survey, the smallest employers were more likely than others to report at least one digital skills gap. More manufacturers reported a skills gap in software and applications development than other employers. Employers in the professional, scientific and technical activities sector were also more likely to report at least one digital skills gap than those in other sectors, particularly in cyber security and advanced technology maintenance. There was some stakeholder concern at the potentially limited pool of recruits for the ICT sector in the local area. More widely, the evidence review identified a higher incidence of digital skills gaps in: agriculture, accommodation, catering and food services, social and personal services, arts, entertainment and recreation, construction, and professional, scientific and technical services.
• Evidence from stakeholder interviews and the secondary research indicates that it is important that digital skills are developed alongside good soft skills. This is required in leadership positions and sales and marketing. Soft skills are also required to support the effective use of digital technology.  
• Not unexpectedly, the research suggests that older workers are likely to have greater digital skills gaps than younger employees.

Digital skills training

• Recruitment difficulties were identified by about three in ten Worcestershire employers as the reason for digital skills gaps. Secondary evidence indicates that recruitment alone is unlikely to be sufficient to secure digital skills due to the limited existing pool of digital talent in the UK. Stakeholders also reflected this view in relation to Worcestershire.
• The evidence review noted that UK businesses were undertaking a variety of actions to meet digital skills needs. About three in ten businesses were taking on apprentices and a similar proportion of businesses were organising external short courses. About a third were collaborating with small business, suppliers or contractors to bring in skills through on the job training or placements. About a quarter of businesses were engaging with education providers to develop courses that suit their digital skills needs.
• Responses to the employer survey suggest that the most common reason for digital skills gaps is the low priority some organisations attach to it. Beyond – or perhaps linked to - this, about a fifth of employers reported facing time and cost barriers to upskilling. However, stakeholders felt that employers could take greater advantage of digital opportunities with greater investment in digital skills, for example, social media analytics.
• Employers in the ICT sector were the most likely to cite insufficient availability of suitable training as a barrier, and to rate local digital skills training provision as poor, suggesting better quality skills provision at higher levels is needed.
• Stakeholders identified various sources of local digital skills provision, highlighting sessions available on social media/digital marketing from multiple providers, and more digital courses being made available at further and higher education institutions. There are some local opportunities for informal peer learning and networking. Some local initiatives to support interest in IT in schools were also mentioned.
• However, there were some general stakeholder comments that there is insufficient digital skills training provision. Stakeholders said they would like to see training specifically in online sales development, particularly for retail and hospitality. They also suggested digital skills training provision for employers in professional services. There was also a proposal for the use of digital technology to support access to new export markets.

Rob Matts, Head of Skills Support for the Workforce said:

“This is a very important piece of research that we are pleased to have been able to deliver on behalf of the ESFA. The findings provide first-hand insights from employers that can guide the skills sector in order it meet the training needs of the diverse business community in Worcestershire. I would like to personally thank the businesses, training providers and stakeholders that have taken time to contribute to this important piece of work."

The full report for Worcestershire can be downloaded here