Yesterday, the UKCES published its Employer Skills Survey 2013. As the Chair of the launch event Faisal Islam said, the report is a goldmine of information. Moreover, the report includes one of our Route to Growth benchmarks – for the proportion of hard-to-fill vacancies to remain under 20%
Last year, we published our Route to Growth – One Year On report, to determine the progress towards our benchmark. We raised concerns in our report that since setting our benchmark, four in five of our member companies had told us they were experiencing recruitment problems, and over half of our manufacturers said that access to the right skills was their main business concern.
Outside of EEF, the Migration Advisory Committee added additional engineering jobs to the shortage occupation list. We therefore weren't filled with much hope.
Opening the report, it is clear – we have not maintained our target. In fact the percentage of vacancies which are skills shortages vacancies has risen to 22%. In England alone this is the first rise since 2005.
It is clear then that more action needs to be taken. Whilst Government has made efforts to reform the skills and training landscape in the past 12 months, it now needs to pick up the pace to ensure that skills provision and supply meets the needs of industry.
But for now, let's look at how manufacturing fares against other industries. With such vast amounts of information available, today we will look particularly at these hard-to-fill vacancies, and how they stem from skills deficiencies.
By industry the proportion of vacancies reported as hard-to-fill as a result of a lack of skills, qualifications or experiences ranged from 10% in Financial Services but disappointingly up to 30% in Manufacturing.
This figure shows that manufacturing now has more hard-to-fill vacancies than in 2011, and the highest amongst all industries. Such findings align to our surveys and evidence we hear form our members on a daily basis.
Understanding how occupations play a role, the chart below shows the pattern of skill-shortage vacancy density by occupation, sector and occupation within industries. It highlights in orange those occupations, sectors and occupations within sectors where skill shortage vacancy density is at least 30%
Chart 1: Density of skills-shortage vacancies - occupation, occupation with sector and by sector
Source: UKCES Employer Skills Survey 2013 (2014) g
As the Chart shows there is a much higher than average e density skill-shortage vacancies for Skilled Trades occupations, and this is prominent in industries including manufacturing. This, UKCES finds, has been consistent for many years. In additional recruitment problems have persisted for professional roles in manufacturing. EEF's 2012 Skills Survey showed that recruitment problems existed across all areas of the business (See Chart 2).
Chart 2: Manufacturers struggle to recruit for vacancies across the entire business, % companies reporting recruitment difficulties by job role
Source: EEF Skills Survey 2012
The UKCES Skills Survey also delves into why hard-to-fill vacancies exist, this year's report finds that two-thirds of all skill-shortage vacancies were due to a lack of technical, practical or job specific skills. (See Chart 3)
Chart 3: Skills lacking among applications
Source: UKCES Skills Survey 2013 (2014)
Again, this very much mirrors our own findings, with two-thirds of manufacturers saying recruitment problems were due to candidate's lacking technical skills.
Chart 3: Recruitment problems due to lack of technical skills
Source: EEF Skills Survey 2012
So have skills shortages impacted recruitment? We have previously found that whilst skills deficiencies continue, manufacturers expected numbers of employees to stay rthe same or even rise (we even found that during the recession manufacturers prioritised holding onto skilled employees as opposed to other areas of investment), UKCES finds that a move towards economic recovery has led to increased recruitment activity compared to 2011, with more employers reporting vacancies. However open vacancies may simply reflect that vacancies remain unfilled due to skills shortages.
In spite of this positive mildly positive trend, skills shortages are continuing to hamper companies' ability to grow and fulfil their growth ambitions. As the number of hard-to-fill vacancies increase, manufacturers are now facing more competition to access the skills they need, not only from companies within their own industry, but from other industry also, in particular for employees with transferable technical skills.
That's the highlights on skills-shortages for now, but come back for another Sector Skills Friday where we will look into other others including training and the recruitment of young people.