What will digital skills strategies in government look like in 2024?

Toby Barnard, MD for government at digital training provider QA, looks at the landscape for public sector training in digital skills for the coming year, analysing external pressures likely to impact upskilling strategies as well as the likely trends.

Whatever happens over the next 12 months, it’s unlikely that we will be welcoming in 2025 without looking back over a year of significant changes in skills training. We have already been witness to the ever growing digitalisation of the workplace over recent years, and the increasing need for digital skills in nearly all roles. And yet the digital skills gap remains, and indeed is expected to continue to grow over the year, as emerging technologies gain a greater grasp on the workplace.

Reports, like the 2023 study by OnePoll for Forbes, found that “93% of UK
businesses say there is an IT skills gap.” In addition, the survey of 500 businesses identified that a significant “42% of these businesses say the problem is due to the fast pace of technological advancements.” They also found that “training and development issues are cited as an issue, with 41% of businesses pointing to a lack of training opportunities.” With that in
mind, businesses in 2024 will need to put more focus on digital skills strategies in order to meet the need that is there.

What can we expect this to look like though? In order to predict what the
training landscape will look like though, we must first look at the macro factors driving the UK digital skills:

Global geopolitics

EY analysis suggests that multipolarity and de-risking are the two greatest trends of 2024. Multipolarity, due to the uncertain relationships between the superpowers of the US, EU and China and de-risking to reduce global dependencies and prioritise national security over economic considerations.
In their report on Global Strategic Trends, it’s mentioned that they believe these trends have built up over previous years. In part, this is assumed due to the ongoing global impacts from the Ukraine war. EY states that collectively, they will have the net effect of “a hardening of the trend…toward a more fragmented global economy.”

Thomson Reuters has focused on 2024 as being the year of elections. They state that the “impact of these elections on geopolitics, global business, and society will be enormous, potentially shaping the policies and priorities of some of the world’s largest and most influential economies.”

Financially, they report that the “inflation dynamic in 2024 will have important implications for the global economy, as it will affect exchange rates, interest rates, asset prices, income distribution, and the debt sustainability of many countries and regions.” It will also be interesting to see whether the digital skills gap could become a hot topic during the elections.

UK inflation

Following this theme, the UK Government has predicted that “annual inflation rate is expected to continue falling in 2024, though more gradually than in 2023, due to lower energy prices and reduced inflation in consumer goods and food.” This is supported by the Bank of England who has published that they “expect inflation to continue to slow, and be back to normal levels by the end of 2025.”

The net effect of these trends, combined with a common strengthening around security and economic policies due to pasty events, means that public spending in the UK is unlikely to significantly increase and large scale major programmes will not be approved, as interest rates will have a continued effect on the ability for Government to take on additional debt. This will
then not result in an increase in jobs and as such we are likely to see a continuation of the current job market.

UK employment market

A report by Indeed shows that “while the labour market has been showing clear signs of softening, with intentions to hire additional workers muted, employer intentions to shed their existing staff have remained limited.” This is assumed to be due to the longtail concerns of applicants demanding higher wages, changes to contracts for increased remote working and the costs associated with recruitment.

What is fortunate is that we appear to have passed the ‘year of resignation’ and wages have peaked in most markets. This doesn’t help the ongoing shortage of digitally skilled employees, but it does mean that more businesses are focused on strategies for upskilling existing employees, as opposed to hiring staff with the skills they require.

Critical and strategic technologies

The UK government has classified 5 critical technologies as AI, engineering biology, future telecommunications, semiconductors, and quantum. The outcome of this investment in tech is positive for the UK and it should result in an increase in the need for skilled employees, although there will be limits to this. This is due to the technologies only impacting mainly early
adopters, elements of the research communities and possibly FinTech.

Training in focus 

Organisations will be looking to retain skills, but not necessarily roles, as they flex to accommodate a change in demand and spending from their clients. This should drive a higher requirement for training; however, this demand will be tempered by a UK wide reduction in spending.

To reinforce this view and help learn lessons from the past, analysis of 2007/8 - when the UK was last in a major recession - suggests there was a mixed response to employees and training strategies. Many organisations made staff redundant and cut back on training budgets, however there were some that saw this as an opportunity to make sure they were prepared and well positioned for the upturn.

A PWC report written in 2009, stated that cutting investment in training
budgets “would mean the company lacks the right skills to compete when the upturn comes, incurring the higher cost and delays of hiring in people.”

Skills to prioritise

In terms of skills, the evidence points to a continued need for data analytics. Research from DSIT, for example, predicts that data analysis will become the fastest growing digital skills cluster, increasing by an estimated 33% in the next five years.

The critical technologies of AI, telecoms and semiconductors, will influence how we do business, but the others, including quantum, are considered to be a longer-term requirement beyond 2024.

QA’s own analysis indicates consistent investment by clients in Data, P3M, Agile, Lean and Dev Ops, IT Service Management, Cyber Security and IT infrastructure and Networking, and so we can expect these areas to lead the way when it comes to trends this year for digital upskilling.

To conclude, organisations should carefully consider their digital skills strategy, as preparation is everything. To protect against the changes in 2024, consider identifying the skills needed rather than focussing on traditional job roles, weigh up the short term versus the upturn needs and think about what you’ll need to exploit the opportunities that will appear when the economy
improves.