There’s an elephant in the boardroom. According to a survey of the finance directors of many of the UK’s largest companies, it casts a greater shadow than China or Brexit or the hacking horrors of cyber attacks.
It’s the new number one at the top of Britain's risk registers – the difficulty of recruiting the right people with the right skills to grow our economy.The skills gap has been a frequent complaint from the boardroom for years. But the evidence from the nation's financial directors is that it has now become critical.
It is not just a problem in construction and manufacturing and technology but a red flag across every sector.
What lies behind this worrying and rapid development?
First and foremost, the speed of change in business is faster than ever. Quite simply, our education system is struggling to keep pace. In only 18 months the smartphone leapfrogged the laptop as the most popular device for consumers. In 18 hours volatility, the Chinese stock market rocked the global economy.
Yet our schools, colleges and universities adapt at a pace that looks increasingly glacial. Many young people are still learning French when business wants Mandarin. They are being taught to pen essays when business craves the craft of digital writing. They are all taught to read and write, but they are not all taught to write software code.
Globalisation and changing technologies are driving the need for the quickest corporate transformations since the industrial revolution.
Against this backdrop, Britain is sending more young people to university than at anytime in our history, yet experiencing our greatest shortage of the right skilled labour. The skills gap is a global phenomenon. Ask any board director in Asia, any recruitment consultant in Sydney or any C-suite executive in the States.
Whoever solves this fastest will gain a global competitive advantage. So, what should Britain do ?
First, we require our education leaders to have an abrupt change of pace and mindset. The conservatism of course designers needs to be firmly challenged.
But this must be supported by business better articulating what we need and want. The traditional model of three or four-year university degrees needs to be adapted. A more agile approach is required to ensure that courses, content and degrees don't become outdated in such a time-frame.
Business needs to partner far more with education so that young people experience the workplace earlier rather than being asked to adapt to an alien world once they have graduated.
The boardroom needs a shake up too. If lack of skills is the greatest barrier to growth, boards must recognise that and invest significantly more in learning while innovating to solve the problem.
We need to add a new C to every C suite – the chief talent officer. This may become the most critical role in any ambitious company. It means breaking from a traditional HR approach and focusing on people transformation.
Careers should become about how many new skills and how much new expertise can be acquired in our working lives rather than how many different jobs we do. The businesses that do this well will become magnets for the most talented.
Our political leadership needs to play its part in driving this realignment. The government’s target of three million apprentices is an excellent aspiration but only part of the change that’s needed.
The chancellor and prime minister are currently in a political period of golden opportunities. After their election victory they now have a window to create real, dynamic change for Britain – even if that means ruffling the feathers of education leaders, business bosses and anyone else caught in the crossfire.
We mustn’t forget another group who must shoulder their responsibility – the workforce themselves. The employees who will win in the workplace of 2020 are those who own their personal development – the people who hunt out the new skills they need to succeed.
Britain's so called ‘entitlement generation’ must not become a burden on our businesses but instead become the new talent that will drive our economic future.
For years we have talked much and acted little on solving the skills gap. Now education, business, government and the workforce must come together as never before to create a new momentum for the benefit of all those who prosper from the wealth of our nation.