FTSE 100 report: Tech prioritised over workforce skills

A recent analysis of FTSE 100 annual reports has revealed that while investment in technology is a strategic priority for many boardrooms, the same cannot be said for skills and training.

The analysis conducted by Multiverse, in collaboration with data analyst David Abelman, reviewed over 700 annual reports across the past decade and found a significant disparity in strategic prioritisation. Although 69% of FTSE 100 companies acknowledge technology as a strategic priority, only 7% assign the same importance to investing in their workforce. This has raised concerns about the preparedness of these companies to harness technological advancements effectively.

"Annual reports are a weathervane for the issues that are capturing the boardroom's attention. What we can see in the data is that investment in technology is skyrocketing, but skills and training have stagnated. It's telling that at the same time, so has UK productivity," said Euan Blair, CEO of Multiverse.

While companies have increased references to reskilling and technical upskilling in recent years, actual financial commitment remains limited. The analysis shows that only 10% of companies disclosed the financial allocation towards training, with an average investment of £600 per employee and a median of just 0.16% of company revenue.

There is also a notable preference for focusing on compliance and Diversity, Equity and Inclusion (DEI) training, mentioned by 97% of companies, compared to 34% that reference training related to Artificial Intelligence (AI). This highlights a gap in preparing the workforce for future technological challenges.

David Abelman commented on the usage of technological tools for the analysis, stating, "When implemented carefully, LLMs provide a fantastic way to extract quantitative information from textual documents at scale. We were able to craft a workflow to make sense of over 100,000 pages of annual reports, giving us a unique understanding of how companies discuss their people development in relation to their increasingly strategic prioritisation of technology."

The data indicates an increasing focus on apprenticeship schemes, referenced by 59% of companies, surpassing the 48% of companies that mention graduate schemes. Internships also saw an increase, rising from 19% to 32% over the past decade.

The analysis reveals that while technological advancements are acknowledged, strategic skills development does not receive the same attention. This disparity poses a risk to the efficient utilisation of technology, as Euan Blair noted, "Technology tools are only as powerful as the people who use them. Without prioritising people, companies will be left with tech strategies that are missing a key piece of the puzzle. The tech revolution will not arrive until companies connect the dots between tools and talent."

The findings come amid reports from the Institute for Fiscal Studies that observe a downward trend in the average number of training days and employer spending on training, contributing further to the decline in workforce skill development.

With increasing global investment in AI predicted to reach $200bn, the absence of a data-led focus on skills development in major UK companies sparks concern. The research highlights the need for strategic alignment between technological investments and workforce skill development to ensure that companies can fully leverage the potential of new technologies.