The UK economy is losing an estimated £23 billion each year because the workforce lacks essential digital skills. That figure comes from a report by FutureDotNow and the Centre for Economics and Business Research, and it puts a hard number on something many business owners have felt for years. Your team might be productive, but if they can’t complete basic digital tasks, your bottom line is taking a hit.
Disclosure: Some links on this page are affiliate links. If you make a purchase through them, Britwealth may earn a commission at no extra cost to you. We only include products and services that are relevant to the topic.
This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
This isn’t a problem that only affects older workers or specific industries. The same research found that one in two young people and one in two people with a degree cannot complete all 20 essential digital tasks. Even 20% of the tech sector itself lacks these basic skills. The gap runs across every age group, education level, and salary bracket. If you run a business in the UK, your workforce almost certainly has this problem whether you’ve noticed it or not. Here’s what you actually need to know.
The term you’ll hear most often in this conversation is essential digital skills. These aren’t advanced coding abilities or IT certifications. They are the 20 basic tasks that the report defines as necessary for modern work: sending emails, using online forms, managing passwords, working with documents and spreadsheets, and staying safe online. The fact that half the workforce can’t do all of them tells you how deep the problem runs.
What I tend to notice when I talk to business owners is that they assume their teams are fine because they use computers every day. But using a computer and being able to complete all 20 essential tasks are two different things. The data shows that even people earning over £75,000 a year — one in three of them — cannot do everything on that list. That’s a gap that costs real money.
What the digital skills gap costs your business in real terms
The £23 billion figure is the headline, but the breakdown matters more for a business owner. The report estimates that if every worker in the UK could complete all 20 essential digital tasks, the income potential of the workforce would grow by over £10 billion per year. Business profitability, measured as Gross Operating Surplus, could increase by nearly £9 billion. That’s not theoretical growth. That’s money that stays in your company because work gets done faster, with fewer errors, and with less time spent fixing problems caused by low digital skills.
Take a concrete example from the research. A construction company in the North-West with 100 full-time workers who have low digital skills could increase its annual output by £300,000 and its annual profits by £100,000 if every worker learned those 20 tasks. That’s a single firm in one region. Multiply that across your sector and the numbers get serious fast.
There’s also a hiring angle. The research found that enhanced digital skills raise the likelihood of employment by 0.21 percentage points per additional skill point. In a scenario where all under-skilled workers are upskilled, an estimated 12,336 unemployed people could gain jobs, with combined earnings of £260 million per year. For your business, that means a larger pool of qualified candidates and less time spent training new hires on basics they should already know.
Where most businesses get digital upskilling wrong
Assuming younger workers already have the skills
This is the most common mistake I see. One in two young people cannot complete all 20 essential digital tasks. They might be fast on social media, but that doesn’t mean they know how to organise files, use spreadsheet formulas, or spot a phishing email. The assumption that digital natives are digitally skilled costs businesses time and money. If you’re not testing for these skills during hiring, you’re guessing.
Focusing on advanced training before the basics are covered
Many companies invest in expensive software training or coding courses when their staff still struggle with basic tasks. That’s like teaching someone to drive a race car before they know how to use the indicators. The report makes clear that the 20 essential tasks are the foundation. Until your team can do all of them consistently, advanced training is wasted. Start with the basics and build up.
Treating digital skills as an IT problem
Digital upskilling is not something you hand off to the IT department. It’s a business-wide issue that affects productivity, profitability, and hiring. The report was developed in partnership with the Centre for Economics and Business Research and sponsored by the office of the National Technology Adviser. That tells you it’s an economic issue, not a technical one. Your HR team, operations managers, and leadership all need to be involved.
Not measuring the gap before trying to fix it
Most businesses have no idea how many of their employees can actually complete the 20 essential tasks. They assume everyone is fine until something goes wrong. The first step is to assess your workforce against that list. Without a baseline, you can’t measure progress or calculate ROI. The report’s authors specifically noted the lack of hard data on digital skills ROI, which is why they commissioned this research. Don’t make the same mistake in your own business.
How to build a digital upskilling plan that actually works
Map your workforce against the 20 essential tasks
Start by identifying which of the 20 essential digital tasks your employees can and cannot do. This doesn’t need to be a formal exam. A simple self-assessment combined with manager observation will give you a clear picture. The tasks include things like sending emails with attachments, using online forms, managing passwords, working with spreadsheets, and staying safe online. Once you know where the gaps are, you can target your training budget where it will have the most impact. For businesses that need to handle sensitive data securely, a business VPN can also help protect remote workers while they build their digital confidence.
Build training into the workday, not outside it
The most effective upskilling happens in short, regular sessions during work hours, not in day-long courses that people forget within a week. The report’s scenario modelling shows that even modest improvements across a workforce produce significant economic gains. A construction firm with 100 low-skilled workers could see a £300,000 increase in output just by getting everyone up to the essential level. That kind of return justifies dedicating an hour a week to training. Make it part of the routine, not an add-on.
Use the Workforce Digital Skills Charter as a framework
FutureDotNow has convened a cross-sector coalition of employers committed to action around the Workforce Digital Skills Charter. This gives you a ready-made structure for your upskilling efforts. You don’t need to invent a programme from scratch. The charter provides benchmarks, resources, and a community of businesses working on the same problem. Joining a coalition like this also signals to employees and customers that you take digital skills seriously.
Track the financial impact of your upskilling
The report gives you clear metrics to measure against. For every worker who gains essential digital skills, you can expect an average pay uplift of £897 per year. For your business, that translates into higher output and profitability. Track your training costs against improvements in productivity, error rates, and employee retention. If you can show that a £5,000 training investment returned £20,000 in productivity gains, you’ll have no trouble getting budget approval for the next round.
Prepare for the regulatory shift coming in digital skills
Technology Minister Baroness Jones has stated that essential digital skills are no longer optional — they are the foundation for productivity, growth, and inclusion. That language signals a likely regulatory push. The government is already investing in digital skills initiatives, and businesses that wait for mandates will be playing catch-up. The report’s finding that it would take over 25 years to close the gap at the current pace suggests that government intervention is coming. Start now, and you’ll be ahead of any compliance requirements.
Frequently asked questions about digital skills in the UK workforce
What are the 20 essential digital tasks? ▾
How do I assess my workforce without causing offence? ▾
Can small businesses afford digital upskilling? ▾
What if my employees resist training? ▾
How long does it take to upskill a workforce? ▾
Does this apply to remote workers? ▾
The cost of waiting is higher than the cost of training
The £23 billion annual loss is not a fixed number. It grows every year that the gap remains open. Meanwhile, the businesses that invest in digital upskilling now will see higher profitability, better hiring outcomes, and stronger resilience when the next wave of digital change hits. The report’s authors made clear that the lack of hard data on digital skills ROI was a problem — they created this research to solve it. The data is now available. The question is whether you act on it.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read The Great Resignation Revisited: Why Are UK Workers Still Leaving?
Sources and Further Reading
Diversity and Inclusion: Are UK Businesses Truly Embracing Change? — Explores how workforce development and inclusion strategies overlap with digital upskilling efforts.
Navigating UK Supply Chain Disruptions: Resilience Strategies for Growth — Looks at how digital skills improve operational resilience across supply chains.
FutureDotNow / Centre for Economics and Business Research (2024). The Economic Impact of Closing the Workforce Essential Digital Skills Gap. 🔗
