This oft-repeated motivational business quote may be somewhat clichéd, but its underlying message – that a business needs to ensure its staff are equipped with the necessary skills for the organisation to succeed – is nonetheless one that rings true.
We are living in times of massive uncertainty and disruption. Political turmoil and the disruption faced by Brexit – which two-thirds of Scottish business leaders questioned in the Open University’s annual Business Barometer report thought would worsen existing skills shortages – are having an impact.
How do businesses – faced with increasingly uncertain times, cost pressures and demands on resources – best determine how, when and indeed if it should train its workforce? Another cliché is that when times are tough it’s the training budget that’s the first thing to go. But at what cost?
£360 million a year. That’s the cost. Or to put it another way, skills shortages are costing each Scottish business on average £17,000. These are findings from the Business Barometer for 2019, which surveyed 150 business leaders across Scotland.
The report found that almost two-thirds of those questioned had struggled in the past year to find staff with the right qualifications and experience for the jobs that they needed to fill. This resulted in money being spent on temporary staff costs, having to pay increased salary costs to fill roles, and a whopping 85 per cent increase in recruitment costs over the last 12 months.
Good news for recruitment companies, you could say, but less positive for the businesses paying out £129m in fees, which could have been retained in the business to upskill and reskill staff and help increase productivity.
The fourth industrial revolution – bringing digital disruption, new technologies, cyber threats and role automation, combined with an ageing population who could be working well into their seventies – means that the upskilling and reskilling of our workforces is no longer an optional extra. It is vital if we are to prosper. Vital if we are even to keep up with today’s pace of change. Vital that we embrace lifelong learning if we are to meet the next set of challenges head on.
It is perhaps unsurprising that digital skills are in great demand and attracting a premium. Yes, businesses require people skilled in cyber security, coding and app development, financial technologies and artificial intelligence – but there’s also a reported gap in leadership and management skills too. The key skills that are required to make vital decisions and drive business forward.
These are skills gaps seen across the length and breadth of Scotland. Other gaps – in vital sectors to the Scottish economy such as agriculture, fisheries, green technology, energy and tourism – are more pronounced in different regions of the country and have a disproportionate impact on rural communities where the ‘brain drain’ to cities continues.
That’s one of the reasons the OU in Scotland is going ‘on the road’. We are travelling the length and breadth of the country, asking employers to engage in a national conversation about skills, to tell us what they need and help them to access the training that they need to develop their workforce and develop their businesses.
The OU in Scotland has students in every parliamentary constituency in Scotland, three-quarters of whom are in work, earning while they learn. So from Shetland to Dumfries, and in towns and cities in between, we’re asking business leaders, skills agencies and organisations large and small, public, private and third sector, to join us and get involved in the discussion.
It’s not all doom and gloom, The Business Barometer found 66 per cent of Scottish businesses think that developing skills in the workplace is a more sustainable approach to narrowing the skills gap. Nearly half of Scottish businesses have increased their training budgets to achieve those required skills from within.
Here at the OU we agree with this approach, and we are calling on more employers to do the same: to develop a sustainable talent pipeline and invest in their existing workforces rather than looking to short-term fixes such as temporary staff.
We’re seeing growing demand both for our technology-enhanced learning, delivered online, and our work-based learning programmes such as Graduate Apprenticeships, where employees can apply their knowledge and skills straight away.
If we all focus on skills then “increased staff loyalty and productivity, a technologically proficient workforce, and business growth” could be the answer to a new question: “What if we train them and they stay?”
The OU Roadshow starts with a launch event on 29 August in Dundee, followed by events in Shetland, Orkney, Oban, Dumfries, Inverness, Irvine and Stirling. More info at www.open.ac.uk/scotland/roadshow.
Marie Hendry is Depute Director (External Engagements and Partnerships) at The Open University in Scotland