Employers investing in apprenticeships amid loss in confidence of Labour’s skills initiatives

At the start of the new university academic year, O’Reilly, the premier source for insight-driven learning on technology and business, has unveiled its latest research showing that UK employers believe higher education is only ‘somewhat’ (39%) or ‘not at all’ (12%) adequately preparing new talent to enter the digital workforce.

O’Reilly’s research, conducted by Censuswide in September 2024, surveyed 500 employers in large UK companies with more than 250 employees. It set out to identify how UK employers are acquiring new talent amid a widening skills gap and economic flatlining.

This latest research follows the introduction of ‘Skills England’ earlier this year to bring together the country’s fractured skills landscape and create a shared ambition to boost the nation’s skills.

UK businesses are struggling to fill hundreds of thousands of digital roles due to a scarcity of skilled candidates, and this digital skills gap is estimated to cost the UK economy £63 billion per year. However, O’Reilly found that nearly half (46%) of UK employers are only ‘somewhat’ confident the Skills England initiative will help to close the UK’s skills gap over the next few years. Indeed, almost two in five (16%) are not confident it will make an impact at all.

UK employers turn to apprenticeships and L&D to close technical skills gaps 

Meanwhile, with UK Prime Minister Keir Starmer calling the country’s current skills system a ‘mess’, employers appear to have taken matters into their own hands. More than a quarter (26%) of UK employers have increased spend on apprenticeship schemes by 21–40%, while a further 24% have increased spend by 41–60%. Furthermore, almost one in five (16%) have increased spend by 61–80%.

When questioned on the digital skills most lacking, UK employers revealed to O’Reilly that they are looking to enhance skills in AI and machine learning (61%), cybersecurity (48%), data analysis (48%), cloud (43%), and programming (32%) across their workforce over the next twelve months.

While investment in apprenticeship schemes has increased, employers still appear to be investing more in recruitment to acquire new talent than in L&D for existing staff, despite 79% of existing employees proactively seeking new digital reskilling opportunities over the past twelve months.

In fact, more than a third (35%) of UK employers will spend between £35,000 and £50,000 on recruitment for skills in AI and machine learning, cybersecurity, data analysis, cloud, and programming over the next twelve months. By comparison, only 31% will invest that amount on L&D to enhance these skills within their workforce.

However, UK employers do believe that on-the-job digital learning is ‘more important’ (49%) or ‘just as important’ (47%) than higher education when it comes to acquiring new talent, particularly for nontechnical staff.

Alexia Pedersen, SVP International at O’Reilly, said, “UK employers have a responsibility to prepare every individual within their workforce for the digital tech of the future.

“To bridge the gap between learning and day-to-day responsibilities, employers can harness the ‘in the flow of work’ approach to provide staff with real-time access to quality learning content. This is particularly important not only for young talent who are new to the workforce but also for existing employees who are proactively seeking opportunities to develop their skills and advance their careers.

“In turn, this approach to workplace learning will increase employee engagement and productivity, fostering innovation and growth that improves the bottom line.”