How tech employers can hone their competitive edge through professional apprenticeships

The UK technology sector is, by many measures, world-leading. At the end of 2022, the Department for Digital, Culture, Media & Sport estimated that the level of investment in UK tech companies outstrips tech investment in France and Germany combined, while the UK is only the third country to hit a trillion-dollar tech industry value, after the US and China.

The UK tech sector is also in the throes of a serious talent shortage. Almost 95 per cent of employers looking for tech talent say they have have encountered a skills shortage during the past year. In 2022, according to labour market analytics platform Lightcast there were 569,000 job postings for software developers, while the Office for National Statistics' Nomis service reported that there were only 553,800 software development professionals in the UK. Demand clearly outstrips supply.

Many tech businesses seem to be trying to 'buy' talent – hiring skilled individuals – rather than 'building' talent – investing in training for new or existing employees. Trying to buy your way out of a talent crisis only exacerbates the existing skills shortage, creating a competitive environment that drives up salaries, making it even harder to hire and retain the talent companies need.

With such high levels of demand for digital and data skills, business leaders in the UK tech sector should therefore focus on 'building' rather than 'buying' talent. Professional apprenticeships are suited to building talent in a way that could help the sector maintain a competitive edge.

Professional apprenticeships are part of the solution. Rather than waiting for fully formed experts, who may not exist in such a tight labour market, tech employers can take on apprentices. Through the learning-while-doing philosophy that is created through apprenticeships, they can train employees with skillsets perfectly in line with their business requirements.

Apprenticeships are structured in such a way that it is easy to create progression pathways, where employees can develop and grow as they move from Level 3 all the way up to Level 7 – MSc level. Take the data programmes as an example: these go from Level 3 Data Technician to Level 4 Data Analyst, Level 6 BSc Data Scientist, onto Level 7 Applied Data Analytics or the Level 7 Artificial Intelligence Specialist.

Apprenticeship programmes structured like this help create a steady flow of talent perfectly tailored to a firm's needs and culture, who have learned how to do the job in-house. Thinking about the suitable combination of these programmes and the way employees might want to progress through the levels, is key to building an effective apprenticeship-based team.

A fortunate by-product of this approach is that apprenticeships promote employee loyalty and reduce turnover. 76 per cent of employers who train existing employees as apprentices reported improved staff retention [PDF], for example.

Professional apprenticeships also come with skills benefits. They provide the opportunity to develop broader competencies that are increasingly valued in the tech world. Soft skills like problem-solving, communication, teamwork, and adaptability are all nurtured within the apprenticeship model. These are the skills that enable tech professionals to collaborate effectively, adapt to new challenges, and drive innovation.

So, what skills are UK tech employers looking for? Data from Lightcast shows demand for data skills is on the rise, as seen in the chart below. This is not unusual – all industries in the UK are searching for more people with data capability than ever before – but this is, of course, a problem for the UK's talent shortage.

The next chart quantifies the 'common' skills – by which we tend to mean 'soft' skills – that tech employers are looking for in their postings. Communication, problem-solving, leadership, and influencing skills are very often built into the 'knowledge, skills and behaviours' that apprenticeships are designed to teach.

With various software skills demanded by tech employers, we can draw some conclusions about the technical requirements of these roles. We can see, for example, that Azure is currently beating AWS, SQL is – unsurprisingly – towards the top of the list, and nothing is likely to topple the dominance of Python any time soon.

Skills data like this gives us the information we need to build training programmes and apprenticeships that meet this skills demand – and equip tech businesses with the technology and data professionals they'll need for the future.

With demand for tech skills increasing and outstripping supply, this skills shortage is likely to continue. This shortage can't be solved through hiring; we need to create people with these skills. Apprenticeships are a great way to train new hires and upskill current staff, helping UK tech employers to bridge this skills gap.

David Palmer is market intelligence partner at BPP.