Season 4, Episode 6: Britain’s workforce renaissance – digital skills, policy, and progress

Transcript

Stella Tsantekidou 

Hello, this is Stella Tsantekidou, Head of Policy at Catch22, and this is the Catch22Minutes podcast.  

Digital skills have been a fashionable policy area for over a decade now, with political party conferences being furnished with round tables and events focused on digital skills year after year, lavishly sponsored by tech firms who have been urging politicians to think about filling the digital skills gap in the UK.  

The government’s ambitions to make the UK a technology superpower are being undermined by high levels of digital exclusion. House of Lords report last year found that digital skills shortages cost the economy up to £63 billion a year, while tech vacancies are finally starting to fall, for a long time the industry has been hampered by a skills shortage that only a national strategy of digital upskilling and reskilling will solve. Some policy analysts believe the skills and talent aspect of the government’s UK digital strategy is lacking the breadth and depth needed to equip the UK workforce for the future.  

To discuss this massive policy challenge, I have with me Carolina Saludes from PwC. Carolina, would you like to give us a short intro on who you are and what you do. 

Carolina Saludes 

Sure. Hello and thank you for having me. I’m Carolina Saludes, I am a Global Campaign Strategist at PwC. That is a very grand title for someone that works in corporate affairs and policy, looking after various campaigns. In this, kind of, wide breadth of things, I look after Brussels, but also the AI campaign. So, within those I end up looking at skills quite a lot because they end up forming quite a big part of our work at PwC, both internally, but also with clients. 

Stella Tsantekidou 

Amazing, thank you, Carolina. So, you are the right person for us to be talking to. The first question I have for you is, what would you say are the current challenges and opportunities in the UK job market? Especially when we’re considering the pandemic period that we just came out of. 

Carolina Saludes 

Yeah absolutely. So, as you explained, there are some structural challenges the UK is facing, which I think are important in this context, a lot of which you have highlighted. Some challenges are unique to the UK, like Brexit, and then some challenges are shared among mature economies; so, ageing populations, falling birth rates, these get talked about a lot, but they are very real issues once you start digging into the workforce.  

So, if you have people having fewer children, not only does it mean that you have got fewer kids going into the workforce, but also that you’ve got this elongating kind of workforce all co-inhabiting with each other at work, right. So, we’re now in a very unique situation with, for example you can have up to five generations working in the same office. That’s very unique and it’s only really happening in very mature economies.  

Now, the UK, you know, it’s more similar to Japan than it wants to think, but it doesn’t really behave that way. We still behave as if most of our population was younger when actually, you know, people who are above 45 and are going to be working are going to be, you know, become the majority of the population in not that short a period of time. So I think these things are all very important and worth coming into when we talk about upskilling.  

I suppose to narrow the conversation because it’s so wide, it is worth talking about the study that PwC does every year. It kind of complements some of our other work, which I might also mention. But I think it’s important to focus on this one, because it talks about employees. It’s called Hopes and Fears, it is a global survey of almost 54,000 employees across the world, we look at 46 markets including the UK, and it tells us a lot about what people think about their job, what they think about skills, about their managers, about their prospects, and it’s an incredibly valuable tool. It is by far the biggest in the industry, and because it’s so big, it allows us to kind of cut in all sorts of different ways.  

So, when we look at the UK, what I think is really interesting is that, it’s not that people hate their job, or even hate their managers, like it’s quite interesting to see people broadly enjoy what they do, they’re seeking to improve and so on. But – and I was thinking about this – this is slightly a personal take, but I think there’s perhaps a little bit of a lack of ambition. Maybe we’re just sort of like not doing ourselves like the favours that we could. There is, on the one hand a lower recognition of how important skills are. Like it’s very noticeable that if you ask a worker in the UK whether they think that digital skills are important, they’re so much less likely to think they’re important. 

Stella Tsantekidou 

So, lack of ambition on the side of the workers? 

Carolina Saludes 

Of the worker, yeah. Just so, for example, stating that green skills are… we don’t just find that people say that, for example, green skills are not like, you know, they’re less likely to say that they are important, but also they’re more likely to say that they’re not important, right? Like we’ve got like a much higher percentage of people saying like, no, I don’t think green skills are important for the future. Which is really interesting in, again, an economy that’s very comparable to the US, to the rest of Europe. So, there is something that’s worth investigating.  

But I would preface all of our conversation with, this isn’t about workers being lazy by any means, and it isn’t about them, like, you know, kind of being, I don’t know, like sort of unimaginative in some ways, I think they need, like, people need help. And I think we should talk about the employer side of things. But the data is telling us something, right, because although we have 1/4 of people telling us, like, oh, yeah, I want to change job within the say, you know, within the next year. Like the percentage of people who are seeking a promotion and asking for a pay rise is much lower than we find globally. So, it’s quite interesting really. We have people that maybe don’t realise that they can upskill, that they can ask for more, that they can get that pay rise. So I think, yeah, in those gaps is where you can start finding a lot of, like really interesting conversations that maybe policymakers and employers are just not really looking at. 

Stella Tsantekidou 

This is a very, it sounds like a complex problem, and in terms of policy making lately, I have been obsessed with the question of, you have a complex problem, do you solve it with a complex solution or with a simple solution? Because, very often what you see in policy making is you have a complex problem and people try to come up with the most complex solution. And in some of the employment groups that Catch22 is a part of, what we will often say is… it is having a career that’s sustainable and fulfilling, can be a complex process, but the solution is very often very simple and sometimes all it takes is a strong mentorship relationship with a career coach who’s going to take the time to listen to you, and also, who knows the industry that you’re trying to enter and will be able to pinpoint you to the right place.  

So, from your work, from PwC’s research and also from your personal opinion as someone who very closely follows politics and the narrative around digital skills, and obviously I know that like myself, you go to party conferences every year, you’ve seen the constant barrage of events at party conference about digital skills. We hear digital skills in every other speech. What can politicians do to tackle this issue? What can they, what can the Labour Party and the Conservative Party and the Lib Dems have in their manifesto for the next general elections to make sure that they cover this policy area? 

Carolina Saludes 

I’m going to say something that is absolutely almost non-PwC related which is look at women. They are 52% of the population right. They carry the burden of caring responsibilities both for children and for ageing adults. There’s almost no policy that looks at them and we know a lot of productivity could be unlocked by looking after women. And also like while they work things like menopause, things like, you know, kind of period issues at work, right, things that are relatively small interventions but that could really work.  

I hear endless conversations about, for example, trying to get, you know, consultants, doctors who are almost on retirement to encourage them to stay a few more years. Right, I was talking to a colleague who does policymaking, and he was saying like, oh, yeah, you know, they’d much rather spend time on the golf course, you really have to encourage them back to work. And I’m like, I don’t care about the male –they’re almost always male consultants who wants to play golf, like I care about his wife, who will probably be looking after both the teenage children and like, you know, the ageing parent, who physically cannot do everything and cannot even think about their career. So, I think there’s a problem with audience that just does not get talked about because frankly, policymaking is full of men who just do not look at the population, population as a whole.  

Those are full of younger people, right? Again, if we focus on an ageing population, we know, for example, that long term unemployment is much more persistent on people over 45. If you expect like in the UK, your population to live until they’re about 90. Right, if you’re a woman born now, or if you’re a baby born now, you can expect to live until you’re 93. You know, like that means that you could reasonably have 50 years of working. And like I just, I don’t see the conversation being geared towards those who are over 40 over 50 over 60 and how to train them.  

We also know, by the way, that if you’re an employer, you’re much less likely, one, to employ older people. There’s like there’s a real, like, ageism when it comes to recruitment. But also, you know, you’re less likely to hire people who are not retraining constantly, so the moment you don’t have some kind of credentialisation that it, you know, the last three to five years, you’re a lot less likely to get employed, right? So, see how that vicious circle kind of feeds itself. So, I think there’s those two problems I would highlight in terms of audience; talk to older people, talk to women. They are such a huge part of your workforce. I don’t understand why we’re not talking to them. 

Stella Tsantekidou 

Low hanging fruit basically, there’s low hanging fruit in this area. 

Carolina Saludes 

There is a lot of low hanging fruit. Like, now the government has correctly identified that childcare costs are, you know, second highest in the world after the US. That’s unacceptable. That most of the times women are having to make really impossible decisions between their own work and, you know, childcare costs. And there’s some help coming, but there’s no real kind of commitment there. 

 The second thing that I would say, and I love your idea about simplicity of solutions and complexity of problems, look, if you are the government and you’re trying to figure out good jobs, bad jobs, you know, digital skills and so on, you’re always going to get second hand information, right? Employers are, at the end of the day, they’re the ones that know the jobs that they need and the ones that they will be willing to pay for. So, I would invite policymakers to think of their role as creators of ecosystems, and I know this sounds really grand, but it is true. Like, how do you set up the incentives to one, raise the standards. One of the problems that the UK has, is it has huge inequalities, right? I went to a very good conference the other day and somebody was saying, you know, when you look at like a really good English manager, they are the best in the world. Like a really good, like you know, CEO, company manager are the best in the world. But the worst are like, the difference is huge and it’s much higher that you than you would see in other places, right? So, I would say – 

Stella Tsantekidou 

Why is that? 

Carolina Saludes 

I suppose looser regulation. I think we have a huge cultural problem. Although we have really good universities, we sort of rely on the idea that university is where the learning is done and then that’s it. Something that I have seen personally, and I sort of know intuitively to be true, is that UK companies really don’t value their employees getting retrained.  

You go to uni, you get your training and then you spend the rest of your career, which as we have seen like will now last some 50 years, with the skills that you learned when you were 18 to 21, like that’s really not good enough. But there’s also no incentive from the government or from companies in the perception of, you know, how upskilling is worth their while, in letting you retrain and encouraging and paying you to retrain. I think that’s, I think that’s a real cultural problem, but also just like a fundamental, yeah, gap in, in our conversation about it. 

Stella Tsantekidou 

One of the things we see at Catch22 and which we try to encourage other people in the employment sector, other organisations in the employment sector to think about is, don’t just think about finding a job for people who don’t have a job and training people who don’t, who are unemployed, also look at people who are underemployed. So with the report a couple of years ago on underemployment: The Hidden Face of Unemployment, which is when people are in careers that are not sustainable, they’re not satisfying, they don’t lead anywhere and these people could well eventually become completely unemployed. Their jobs could become redundant and and also not just looking at young people as you said, because there are a lot of people who now have to change careers later on in life and how are we incentivising them.  

But in terms of younger people as well, when we are looking at younger people very often you have this problem where people will have a job which is a low paid job in an unsustainable career. If these people want to live in an expensive city like London, let’s say, and we’re talking about birth rates that are falling, and you have young people who are saying, how am I going to have a family on this kind of salary? But then very often they will come against this problem of do I go part-time on this job to study or gain extra skills and lose the income that I already have for the hope and the promise that my income will multiply 5 years down the line, 10 years down the line. And this is something that we have found that can only be taught to young people through mentors. You can only do that through a close relationship with someone who will guide them through that, they’re not going to read a blog online and be convinced.  

I believe you have an opinion on this that how that applies to digital skills in particular, and particularly if we can bring in AI here, because into this discussion we haven’t touched on this yet and there are a lot of people whose job will become redundant and politicians have started to very, very slyly talk about this issue, but it doesn’t feel like we are prepared. 

Carolina Saludes 

It doesn’t. It’s really interesting, I’m also doing some work that will be released in April, hopefully, watch out for it, on exactly that, on AI and workforce issues, how AI jobs are affecting the wider labour market and then how the labour market is being affected by these AI jobs coming into them right? So the two things interact quite a lot. So it’s not that like everyone’s suddenly going to become a prompt engineer, but almost all of us will start using AI in the way that almost all of us use spreadsheets in one way or another. Like, I would argue, genuinely, even if you’re just stacking shelves at Tesco, you will come across a spreadsheet at some point. And I think that’s quite a useful way to think about it.  

I think of two things and I know this is slightly random, but follow me on this. The government tried to do this thing of like oh, you know, you could be from a ballet dancer to a data analyst, and everyone really scoffed. And I thought, okay, the application was very poor, but I thought there was something laudable in trying to get people to a slightly different mindset, right? Again, if we think of ourselves as people who will be in the workplace for about 50 years, about half a century, it is impossible to conceive of ourselves as people who will just do the one thing.

Now we found in the PwC report, and and this is true in the UK but also true in Europe, for example, that people who already have some skills are really likely to be aware that they need to improve their skills. People who don’t have skills are just so much less likely to think that they need to change things. So, I think awareness is key. Like I cannot stress this enough. There’s a whole section of the population that doesn’t even know that they need to change something, and they need to improve, right? As you say, like that underemployment, unemployment, people who have got sort of sort of a job that sort of pays and they can sort of survive, but they don’t, they can’t really conceptualise how to get out of that, I think, you know, I think campaigns that are slightly better aimed and a slightly longer term about allowing people to imagine their lives a little bit better, it’s actually incredibly valuable because it really does start, as you say it does with mentorship. But it also starts with a very public conversation about how people can just do different things.  

Skills is one of those wrappers, they’re like concepts that doesn’t really mean anything to people unless you put it into practise, right. An example that I like to use because it’s quite counterintuitive is one on actors. So, I used to work in the film industry. I was surrounded by actors all the time. It is a very risky, insecure profession and you have a lot of people who are, you know, 21 to 25 who are trying to make this thing work. And then it doesn’t. And then you’re like I’m 26 and then 27 and then and then what do I do? To them I would say you know, an actor is incredibly good at reacting. They’re incredibly good with people. I have seen actors that have gone into, for example, business development and sales and make a tonne of money. And if you say that to an actor who’s 21, they’ll be like, I’m sorry, sales like tech sales. What? What are we talking about here? And it’s like, no, you’re really good at memorising scripts, you’re very good with people, you’re very good at persuasion and you’re very good at, like, understanding, like, what’s around you? It’s like those things that I’ve just mentioned are skills. You could apply them to a theatre audience, or you could apply them to a, you know, B2B like tech sales business. Not that you have to do that, but if you start conceptualising of the things that you can do and the things that you’re good at and start looking at how you can apply those two things that you might like a bit more and that pay you a little bit more, it’s that’s really great.  

One of the red herrings that really annoys me is that when we talk about salary increases, salary growth in the UK, it grew about 7% last year. Great, still not as good as inflation, so everyone’s getting a pay cut, but when you dig a little bit into that, the people that got pay rises were people in financial services and in tech, people who are already on a good salary. That is, people that are already on a good salary are like, no, hell, no. I’m going to ask for more. The problem is people who are not in a good salary and how do you, I hate this word, but how do you empower them to ask for more. I think that’s the trick. And frankly, I think that takes a concerted effort because everyone wins, right.  

The third part of this, we’ve not talked about as much is employers. When employers ignore the fact that they need to train workforces, they lose out on money. The vacancy rate in the UK is way higher than it was before COVID. The vacancy rate is quite an interesting one. Economists really like them because it shows you the potential for growth in in an economy, right? Open vacancies need for workers versus how many people are actually taking those up. It’s kind of fascinating to see that this like widening set of jobs that are very much needed that are left unoccupied. Some of that is migration issues. Some of that is caring responsibilities. Some of that is infrastructure, right, like both caring infrastructure but also physical infrastructure. People need to get to work and we’re really bad at that in the UK.  

Yeah, it it’s sort of like, you know, if you’re an employer, you have to fill some roles and you’re not currently filling them. So, what do you do? And one of the things that we’ve sort of been toying about at PwC is how do you demonstrate that ROI? How do you demonstrate the return on investment, of training your workforce? And that could be, by the way, if you’re at Tesco, there might be like a management training programme that you could do so that yes, if you’re stacking shelves in three years’ time you might find yourself like managing, supervising and then so on and so forth. But that thought process and those programmes need to come from the top. It can’t just be, HR being like oh, you know, be quite good if you like, put some training programmes. Like the CEO needs to realise they lose money if they don’t do this. 

Stella Tsantekidou 

These are all some very good lessons, not just for firms and employers who take on board but also for organisations like ours at Catch22 where we advise people, and we have contracts with corporate partners to help people find employment and improve their skills.  

Carolina, thank you so much for joining us. This has been truly enlightening and best of luck with your work at PwC. I will be looking out for your next report with great great interest and hopefully we can get you back on the podcast once you release that it. 

Carolina Saludes 

It would be a pleasure. Thank you for having me.