Sarah Willis details some practical ways to close the UK's skills gap.

In recent years there have been consistent complaints from employers that young people don't possess the skills they need. Amidst a Europe-wide crisis in youth unemployment, a McKinsey report found 27% of entry-level jobs vacant because employers in eight major European economies couldn't find anyone with the necessary skills.

In the UK specifically, a CBI study found 58% of businesses “not confident they would have enough highly skilled staff available for their future needs.” If employers are willing to hire young people but can't find the skills they need, that is a disaster for both Britain's school-leavers and its economy.

What form does the skills gap take? Why does it exist? And what can we do to close it?

Entry level skills gap

There are three broad areas in which employers are dissatisfied with the nation's youth, namely:

• General workplace skills

• Literacy and numeracy

• Subject-specific skills

The CBI study quoted above also found that more than half of the employers surveyed weren't happy with school leavers' resilience and self-management, with a third concerned about their attitude to work. Another third were unsatisfied with literacy and numeracy skills of school leavers. These factors all conspire to leave entry-level positions vacant, and youngsters unemployed.

Degree level skills gap

Perhaps even more glaring is the mismatch between the needs of the job market and the subjects studied at degree level by Britain's students. The Association of Graduate Recruiters say that although graduate vacancies are up 17.1% this year, almost a quarter of employers have open vacancies because they couldn't find the right skills in the most recent graduate cohort.

Certain sectors have had long-standing shortages – notably engineering – but this is spilling out into other 'boring' areas such as physics and even IT. We have a booming IT sector, estimated to require 750,000 skilled digital workers by 2017, but in 2011 there were only 56,025 computer science graduates, a drop of 23.3% over 10 years.

Meanwhile, there is a need for 87,000 new engineers per year in the UK, but a noted lack of interest from students; perceiving science, technology, engineering and maths as both difficult and boring.

Closing the entry level gap

There are, then, two distinct areas that need attention. The first being that too many people are leaving school with an insufficient basic skillset for even entry-level work. The second being that although we keep cramming ever more students into university, they aren't studying the right things. What can we do? And who needs to take the lead?

A CIPD study found that 40% of employers offer work experience and 37% have increased their provision in the past 12 months. This needs to expand. If pupils are leaving school without basic workplace skills, what's the best way to teach them these skills? Experience, surely. How can you teach a good working attitude in the classroom?

This is, to an extent, the responsibility of business to commit to offering more work experience. But government can play its part in expanding existing work experience programmes, and rallying businesses to take part. Similarly, the Department for Education would do well to work closely with business leaders to identify what skills are lacking and shape the curriculum around filling in the gaps. If literacy and numeracy skills are top of the agenda, that's a basic failure in the education system. And that's entirely on the Government.

Closing the specialist gap

The specialist gap requires direct, practical, policy-level intervention. The CBI has suggested establishing a UCAS-style system for vocational further education in order to raise awareness of what's available and simplify the procedure for enrolling in such a programme. It would also be a big step towards establishing equal credibility for vocational FE and degrees – helping fill gaps in engineering and construction in particular, although more 'white collar' apprenticeships are beginning to appear as well.

There is also a need to encourage students to choose more subjects at university that tally with the shortages in the workforce. The Institution of Engineering and Technology (IET) is doing exactly that, with a £30m fund from the government to change perceptions around STEM (Science Technology Engineering and Maths) subjects. It is essentially a PR exercise, but a necessary one.

These are both good examples of collaboration between business and Government to direct students towards opportunities that businesses must provide. It's Government's role to institutionalise projects and programmes, and provide incentives to participate. It's the role of business to provide real-world opportunities.

But business can also use existing resources by expanding internal L&D programmes, educating current staff – who can then go on to teach others. Education is not the exclusive preserve of schools, colleges and universities.

Aside from plugging skills gaps, L&D is a sound investment. Actively providing learning opportunities is a key plank in retaining employees, and retaining employees both saves on the high cost of recruitment – estimated to cost around £30,000 per new hire – and retains the cumulative added value long-tenure staff provide. The incentive is there. The will to front the cost is harder to find.

The long-term economic health of the UK depends on closing the skills gap. If we want our nation's youth in work both Government and business need to take responsibility and take positive action.

Sarah Willis is an online editor and writer. She has been a journalist for seven years, on business titles and online publications including The Huffington Post, Business Reporter and Open Democracy. She tweets as @SarahQWillis