A skills-centric model – redefining the role of skills in tech

The UK technology sector continues to be a cornerstone of economic growth, with Tech Nation's latest analysis showing the industry contributing £149 billion to the UK economy in 2023. Despite global economic headwinds, the UK maintains its position as Europe's leading tech hub, hosting 37% of Europe's total tech unicorns and attracting £24 billion in tech investment in the past year.

But this success brings its own challenges. The Digital Economy Council reports that tech job vacancies now make up 15% of all available roles in the UK, with particular demand in emerging fields like AI, Cloud computing, and cybersecurity. The skills gap in these areas is especially acute, with the UK Digital Strategy estimating that 80% of all jobs now require some level of digital skills, while nearly 25% of the workforce lacks basic digital capabilities.

This skills disparity is further complicated by the rapid pace of technological change. According to the CBI's latest Technology Tracker, 91% of UK businesses identify digital transformation as a top priority, yet 76% report significant difficulties in recruiting staff with the right technical skills. This context makes the following discussion of skills-based organisational transformation particularly relevant for the UK's tech ecosystem.

Looking ahead, the current economic landscape for both businesses and the workforce is challenging, an issue that is outlined in the recent WEF Future of Jobs report. The report identifies five key drivers reshaping the global labour market. Each one presents its own challenges and opportunities, with varying impacts across regions and industries and the interplay between these drivers creating complex patterns of job creation and displacement.

The rate of change that the workplace is experiencing, and will continue to experience, is staggering. In January 2025, the Labour government published the AI Opportunities Action Plan, outlining the steps needed for the UK to position itself as a global AI leader, with a goal to train 'tens of thousands' of AI professionals by 2030.

Recent data from Skills England's 'Occupations in Demand' index provides evidence of the immediate skills challenges facing the UK economy, revealing that 7.8% of the UK's working age population are in critically demanded occupations, with a further 38.5% in elevated demand positions.

This, combined with the reality that many powerhouse industries such as finance, technology and sustainability are struggling to fill their roles, makes it clear that something needs to change.

When it comes to recruitment, reskilling, and upskilling, the value of skills cannot be understated and businesses are starting to become more aware of the skills they need to progress and be successful. This is why the role of skills within a business must change and an emphasis on key competencies and abilities must be brought to the fore. 

A trend that we are starting to see grow is businesses becoming more skills-aware, moving away from traditional job-based planning to a more fluid, capability-focused approach, with some organisations going beyond and becoming 'skills-based organisations' (SBO).

Simply put, becoming an SBO means emphasising skills over roles; aligning workforce planning, attraction, recruitment, professional development, performance management and talent and succession planning processes around skills needs.  

It moves beyond rigid job descriptions to focusing on actual skills, so organisations can respond faster to market changes, deploy talent more flexibly, and create clearer growth pathways for employees. Why? Because it leads to be better resource and skills utilisation, it enhances internal mobility and makes organisations more adaptable to meet emerging business challenges.

By shifting their focus to a skills-centric business model, organisations can ensure that employees can shift roles based on their skills more easily, leverage diverse skillsets and employers can encourage continuous learning.

By taking this structured approach based on a clear understanding of required skills, organisations can better target their development investments while providing employees with clear paths for growth. The result is improved operational performance, reduced skill gaps, and a workforce that continuously evolves with business needs through optimised skill solutions, precisely aligned with organisational requirements.

This National Apprenticeship Week presents an opportunity to reimagine how organisations can bridge the skills gap through structured development programmes. As organisations transition toward skills-based models, apprenticeships can serve as the foundation of their talent strategy. Apprenticeships represent a natural extension of the skills-based organisation model, offering a framework for both acquiring new talent and transforming existing workforce capabilities.

By viewing apprenticeships this way, businesses can maximise their return on development investments while contributing to the broader economic transformation outlined in national and global skills initiatives.