How to close the digital skills gap: Steps for UK businesses 

It isn’t about elite tech skills, but rather the core digital capabilities needed for almost every job in today’s economy. 

At the recent FutureDotNow Digital Skills Summit, business leaders and changemakers gathered to confront this issue head-on and consider solutions, including Mercer’s UK Transformation Leader, Maura Jarvis. Her key message: it’s time for businesses to act.

As digitalisation accelerates, the digital skills gap has widened to become a national economic vulnerability. Rapid technological advancement and a challenging labour market mean companies are finding it increasingly difficult to match the pace of change with an agile workforce that’s equipped for today’s environment. Without targeted action, the gap will widen further as AI and automation gather pace.

As Jarvis told the audience: “There’s not a boardroom in the country right now where productivity, efficiency and agility aren’t key topics of conversation.” 

And yet, 21 million working-age adults in the UK still lack at least one of the 20 essential digital skills for work. That’s more than half of the UK’s workforce. These include tasks as simple and critical as accessing salary information online, following IT security measures and using digital messaging platforms such as email. What’s more, the gap crosses the UK’s workforce: one in two young people, one in two academics, one in three people earning £75,000+ and even one in five people working in tech lack at least one essential digital skill. 

The digital skills gap means businesses miss out on scale and innovation, workers miss out on career progression and job satisfaction, and the UK itself misses out on economic growth.

New research conducted for FutureDotNow shows that the lack of all 20 essential digital skills is costing UK businesses nearly £9 billion in profits. For individuals, gaining all 20 skills is linked to a salary boost of nearly £900 per year. And, if every unemployed person who lacks an essential digital skill closed that knowledge gap, more than 12,300 people could enter employment. 

The business case is clearly strong. So, what solutions are out there for businesses looking for support? 

We help organisations take a strategic, evidence-based approach to developing the workforce they need now and into the future. This involves understanding which skills are currently in demand in their business and creating a robust talent pipeline at every age and education level.

Two standout tools support this approach: 

To build skills-based organisations, leaders must rethink how they define roles and talent. The pandemic sparked a massive shift in flexibility and digitalisation that forces businesses to investigate how work can be done most effectively. 

Mercer supports organisations to: 

• Reframe their understanding of work from static roles to dynamic tasks and flexible talent models.
• Identify who (or what – think automation) is best suited to perform each skill.
• Recognise the talent that already exists or can be developed within their workforce.

As Jarvis noted at the Digital Skills Summit, reskilling existing staff can deliver better outcomes than hiring externally – and today’s challenging talent market makes this even more pronounced. Mercer’s insights back this up: it can cost up to £49,000 less to retrain someone than to make their role redundant or bring in a new hire.

In a quickly digitalising world, education can’t stop after formal schooling. Mercer is working closely with policymakers and educators to champion access to practical, industry-relevant training that supports development in the skillsets businesses need most.

This means:

• Helping people across all ages and backgrounds gain relevant, digital-first skills.
• Encouraging employers to support continuous learning as part of everyday work.
• Equipping people with the confidence and tools to progress at work.

This will become all the more important as AI moves into the mainstream. Mercer has identified five human skills we believe are most resilient in the face of automation and AI: critical and analytical thinking, creativity and innovation, emotional intelligence, digital literacy, and agility and flexibility.

Closing the digital skills gap isn’t just about staying relevant and competitive – though that is part of the equation. It’s about unlocking potential in your people, your organisation, and the UK business environment as a whole.