Purpose- The purpose of this paper is to examine UK higher level skills gaps. UK universities now have many students who were already learning at a higher level about, for, or through, their activities at work, and have decided to formalise this via a higher education (HE) programme; for these students learning mostly takes place away from the university and is sometimes categorised as “work‐based”. Due to the increasingly flexible and hybrid profile of all contemporary students it is more realistic to align those undertaking work‐based study with those choosing more traditional study routes, as all students need to enhance their workplace and life skills in order to better fit them for employment and life after university. There are blurred, not solid, boundaries between the differing kinds of students and between working and studying, and it is useful and productive to acknowledge this continuum. Design/methodology/approach- A researched overview of relevant policy, data and literature including a research project into higher level skills gaps. Practical implications- Employers cite the crucial nature of employability and subject‐based skills and the need for employees who understand how to learn, and furthermore how to build upon and maximise the usefulness of what they learn by making connections and solving problems. Originality/value- The paper shows how HE is shifting, due to demographics, an evolving world picture and a tough economic climate. Technological advances intensify globalisation causing rapid changes and greater competition for jobs and resources. The pressure on HE graduates is greater than ever before. The Government states that individuals require skills with a high economic value and to be prepared to undertake jobs in industries which do not exist yet; they must be changeable and adaptable to meet the challenges of the jobs market and willing to continuously develop themselves.