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How a Digital Skills Gap Could Be Harmful to Your Business

digital skills gap

A lack of digital literacy in any business could lead to higher costs, poor customer experience and low employee satisfaction. Dr Antonio Weiss, Senior Partner at The PSC and author of The Practical Guide to Digital Transformation, outlines what these threats could look like and how to combat them in an increasingly digitised world.

For businesses large and small, digital skills are a desirable premium in their workforce today. 73% of workers globally feel unprepared for our digital future, which is creating a stiff barrier to the future of UK businesses – 65% of whom feel a lack of digital skills is impacting their costs and growth at this time.

It may sound lofty in the grand scheme of things going on in the world economy today, but UK businesses are statistically behind other commercially developed countries when it comes to digital literacy. And when it comes to small to medium sized enterprises, the UK economy is experiencing a £85 billion productivity gap due to a shortage of the right digital skills.

Defined as the ability of an individual to use technology to “find, evaluate, communicate and create information”, digital literacy encompasses so many elements of how a business functions, it can be difficult to know where to start. There are, however, three critical ways we can group these issues to better understand how they might be impacting your business and how to fix them. Namely, they are the organisation and its economic health, your customers, and your staff.

Firstly, digital literacy is not limited to any particular level of your organisation: it can impact any one from new joiners to senior executives. In particular, senior executives who feel unsure or uncomfortable about digital technologies (and this could be many) are likely to be tempted to exclusively consider big suppliers with multi-year contracts for their IT needs.

Although it might seem like a one-fits-all-solution, this can lead to a variety of issues down the line including a vendor lock-in, difficult contract negotiations, or a lack of internal capabilities when the contract eventually expires.

As organisations seek to take ownership of more and more of their own digital capabilities, a hybrid approach is starting to look like one of the most sustainable and productive ways of managing digital capabilities internally.

A hybrid approach is where internally strong digital capabilities are developed with a view to managing suppliers in small chunks for specific needs across the business. This ensures your suppliers are competitive and as effective as possible internally, but requires good digital know how from your team.

It’s also important to remember that your customers can also be affected by the digital literacy gap too. 4.2 million people in the UK use the internet less than once every 3 months, with many of these people having never used it at all.

The pandemic has only highlighted how dramatically the UK’s digital divide impacts people’s options and everyday access to tools like information, transport, and ultimately their economic mobility. For your business, this means many of your customers who are uncomfortable with using or have  limited access to internet services, will struggle with any online services you provide, and risk being disenfranchised if you seek to move services further online.

As an SME, your first step should be to understand the existing digital literacy levels of your customer bases. If many of your services are primarily digital, you should ensure you have fall-back options to catch customers if they struggle with your online service. Telephone helplines are costly, but may be net beneficial if the alternative is losing customers. Other initiatives should include easy to follow websites and screens, using plain English at all times, and repeatedly getting feedback from your customers on how easy-to-use your services are, and improving them accordingly.

Lastly, with nearly a fifth of the UK workforce lacking basic digital skills, any business seeking to leverage the benefits of remote working, new technologies such as cloud computing or advanced predictive analytics are likely to struggle. You can’t just give people new digital tools and expect them to use them effectively if they don’t already have basic digital skills.

It’s important to make digital tools as simple as possible for all of your workforce – regardless of what their level of digital literacy might be.  Even designing for a technically literate workforce requires a mindful approach, such as when The PSC created new software for the UK Space Agency to track debris. Key to our approach was ensuring the software interface was designed with accessibility and user needs in mind. Using pre-tested design patterns for websites can help minimise basic digital skills being an impediment to customers using digital services.

Luckily, there’s much you can do to help bridge the digital literacy divide: education, training and support, as well as well-designed content and assisted digital services will all help your customers and teams. But first, you need to be aware of how the challenge of a digital skills shortage could be impacting your business.



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