how do we modernise our workforce strategy to tackle this looming skills gap?
It's not just about filling empty seats anymore; it's about future-proofing our organisations for a world of rapid technological change and constantly shifting business demands. Let me share some of my thoughts on this, based on recent discussions and what we’re seeing at LACE.
The numbers really paint a picture. The World Economic Forum's Future of Jobs Report for 2025 highlights a massive transformation in the global job market. We're looking at an estimated 170 million new jobs emerging in the next decade, alongside the displacement of around 92 million roles. That's a net increase, sure, but it underscores the sheer scale of the skills evolution we're facing. And it's not a distant problem; the Open University Business Barometer from last year already showed that a significant chunk of UK organisations – over 60% – are grappling with skills shortages right now.
The first step in tackling this isn't just about reacting to the headlines about digital and AI (admittedly these are skills high on many organisations’ list, but the Future of Jobs Report also has analytical thinking, resilience, leadership and social influence as other skills identified as most ‘in demand’). It's about getting really clear on your organisation's specific skills gaps – within your industry, your different functions, even your geographical locations. What might be a critical shortage in one sector could be less pressing in another.
Before we even talk about specific skills, I always emphasise the importance of having a robust workforce strategy in place. Too often, we see organisations with a people strategy or an HR strategy, but not a clear articulation of how they're going to get the right people, with the right skills, in the right place, at the right time to achieve their business goals. Think of your workforce strategy as the blueprint that underpins everything else. Ideally, it should align with your business strategy, looking out over the next two to three years. Without this foundation, any skills initiatives risk being piecemeal and ineffective. It's a bit concerning that only a small percentage of businesses seem to have a formal skills plan in place; it suggests we need to be more strategic and less reactive.
One of the key shifts I advocate for is moving away from a traditional obsession with "critical jobs" and focusing instead on "critical skills." The reality is, in today's dynamic environment, job descriptions can become outdated quickly. The skills needed for a role can evolve dramatically based on technological advancements and automation. I've seen this firsthand in industries like pharmaceuticals, where the skillset of an R&D specialist in one company can be vastly different from a seemingly identical role in a competitor due to varying levels of tech adoption.
By concentrating on the fundamental skills required for specific tasks and business outcomes, we gain a much more agile and accurate understanding of our talent needs. This skills-first approach allows for more targeted development and a better ability to deploy talent across different roles as needed.
Traditional workforce planning often defaults to headcount projections – if we're growing by X%, we need Y more people. But skills planning requires a much deeper dive. It's about understanding the actual work that needs to be done and the specific skills required to do it effectively.
When you're planning for growth, ask yourself: where can we leverage automation or AI? Just because your business is expanding by 30% doesn't automatically mean you need a 30% increase in headcount across the board. We need to critically evaluate roles and identify opportunities to augment human capabilities with technology.
Everyone's talking about digital and AI skills, and rightly so. They're clearly shaping the future of work. But I urge you not to have a singular focus. While these are crucial areas, they're really just tangible examples of broader technological shifts impacting all sorts of roles.
Think about it – geographical expansions, changes in your supply chain, new ways of sourcing talent – all of these have implications for the skills you need within your organisation. So, while digital and AI are important, make sure you're looking at the full spectrum of evolving skill requirements across all your functions. And let's not fall into the trap of thinking that cost-cutting through job losses is the only answer to efficiency pressures. Strategic upskilling and the smart application of technology are far more sustainable solutions.
This is an area I feel particularly strongly about. There's often a significant disconnect between what educational institutions are producing and what businesses actually need. Graduates and school leavers sometimes enter the workforce lacking fundamental skills, both technical and soft (you can find out some additional interesting reading from the National Foundation for Educational Research (NFER) and their The Skills Imperative 2035 report).
I believe we need much stronger collaboration between businesses and educational institutions – universities and schools. We need to clearly communicate our current and future skills demands. Initiatives that foster this dialogue are vital. Governments also have a role to play in guiding education towards the critical skills needed for national economic success, driven by input from the business community. Ultimately, it's about speaking the same language – the language of skills – so that we can better align what's being taught with what's required in the workplace.
The idea of becoming a truly skills-based organisation can feel overwhelming. For companies with long-established structures, unpicking traditional job-based frameworks seems like a massive undertaking. But I see it as an evolution, not a sudden revolution. Organisations are constantly changing. The core principles of a skills-based approach – things like internal mobility and diverse career experiences – aren't entirely new. They've often existed for a select few. The shift is about democratising these opportunities, making them accessible to everyone. It's about focusing on the skills people possess and enabling them to contribute in different ways across the organisation.
Modernising your workforce strategy to tackle the skills gap is a complex but absolutely essential undertaking. It requires a shift in mindset, a focus on skills rather than just jobs, a commitment to continuous learning and collaboration. By taking a strategic approach, understanding your specific needs, and fostering a culture that values growth and adaptability, you can equip your organisation and your people to not just survive, but thrive, in the future of work. It's about building a resilient and skilled workforce that's ready for whatever comes next.
If you’d like further resources on this, we’ve recently recorded a podcast with Pavan, which you can access here.
