Research Identifies the Skills needs of businesses in the Heart of the South West Transitional region
A research report has been published for the Heart of the South West Transitional region setting out the recommendations for delivering training that meets the needs of local employers.
The research has been commissioned as part of the Skills Support for the Workforce Programme which Serco’s Employment, Skills & Enterprise business manage in the Heart of the South West Transitional region and which is co-financed by the Education and Skills Funding Agency (ESFA) and the European Social Fund. The ESFA commissioned Serco to conduct research to understand employers’ skills needs created by automation and barriers to training in the Heart of the South West Transitional region.
The findings of the research provided recommendations for training providers and others working in the skills environment to consider as part of their future planning for skills delivery in the Heart of the South West Transitional region in order that it meet current employer needs.
The key findings are:
- The rapid pace of digitalisation of many aspects of the economy and the skills challenges this brings are a key context to the research, alongside policy on energy and sustainability born of the climate change crisis. The economic context, prior to the Covid-19 pandemic and subsequent recession, for which data is available, showed productivity challenges in the UK, but broad strengths in the Heart of the South West with high levels of economic activity (82.4 per cent) and low unemployment leading to skills shortages and hard to fill vacancies. Within the Transition area of the Heart of the South West, many employees are underutilised and four per cent of the workforce are not proficient in their role. A lower proportion of the working age population with higher level qualifications than in the UK may be a contributing factor to both skills shortages and hard to fill vacancies, which is especially true in Plymouth and Torbay.
- While national data is not yet available for these indicators, other metrics suggest that the socio-economic impacts of the post Covid-19 pandemic recession are going to be rises in unemployment, and some sectors having to adapt as the economy undergoes structural shifts. In this quickly changing context the need for reskilling parts of the labour market is going to be highly important.
- The findings of this research show 83 per cent of businesses had a vacancy in the last 12 months, an increase on comparable figures of 68 per cent in 2017. Of these, nearly half reported that they had hard to fill vacancies, with an incidence rate of 39 per cent of all businesses in the Transition area. A low number of applicants with the required skills was the most cited reason for hard to fill vacancies (by 52 per cent of respondents) along with a low number of applicants generally (by 41 per cent of respondents). A higher proportion of hard to fill roles were in the higher value occupations such as skilled trades and professional occupations.
- For 52 per cent of the respondents, technical skills specific to the sector or role were lacking among the applicants. General employability and work readiness were cited by 34 per cent of the businesses and a lack of digital skills by 11 per cent. Almost a quarter reported a lack of technical qualifications with examples including NVQ2 Carers, Construction apprenticeships and NVQ3 Healthcare.
- Seventy-four per cent of the respondents in the Transition area reported that the impact of hard to fill vacancies was to increase the workload of other staff. This was lower than comparable figures for the Heart of the South West (87 per cent) and Devon (84 per cent) in 2017. Some 14 per cent reported that hard to fill vacancies were leading to difficulties introducing new technology and 19 per cent that it was causing difficulties in introducing new working practices, both reflecting potential barriers to innovation and productivity.
- In the Transition area, 42 per cent of business respondents stated that they were prepared to offer training to less qualified recruits to overcome the challenge of hard to fill vacancies. Thirty-five per cent also reported they would increase training to the existing workforce which was much higher than the comparator figure of six per cent in 2017.
- Just over half the respondents reported having a training budget on average, with a greater proportion of larger businesses reporting training budgets, than micro organisations. Eighty four per cent of businesses had staff who had undergone some form of training in the last 12 months, a higher proportion than comparable figures in 2017. This training was generally job specific and 66 per cent of businesses reporting training was provided internally. Of the businesses who used external private training providers (52 per cent), universities (seven per cent) or colleges (14 per cent) over 150 were cited in the Transition area. These were therefore mainly unique to the businesses and their sector, though Plymouth University, SSG, Petroc and the University of Exeter were all mentioned by at least eight separate firms each. The training they received was highly regarded and scored at 4.52 out of 5.
- Barriers to training were mostly cost of training (cited by 31 per cent of respondents) and not being able to spare staff time (31 per cent). These results were slightly above those found in comparable studies in 2017. In the Transition area 39 per cent of respondents had some link to academic institutions, and nearly half of these was through offering internships and placements. Half of respondent businesses had links to schools or colleges and for the majority (82 per cent) this was through offering work experience, and 49 per cent offered apprenticeships and traineeships. Of the 18 per cent who did not engage with any academic or other skills providers this was mostly because there was no business need.
- Thirty-seven per cent of businesses surveyed in the Transition area took on apprentices, with over half of these (55 per cent) doing so to support young people and recruit new staff (59 per cent). Where businesses did not take on apprentices 34 per cent stated this was because they did not consider apprentices suitable to their business model, though 18 per cent reported they did not know enough about it. One third of the businesses in the Heart of the South West said they would consider taking on apprentices in the future if there was additional support.
- General digital skills were most in need by over one third of businesses in the Transition area over the next three years much of this driven by digitalisation and introduction of digital technology. To improve their organisation in the next three years, 69 per cent of businesses sought basic IT and computer skills training, though there were other needs including digital marketing (35 per cent), computer networking (26 per cent), programming (29 per cent) and digital design (23 per cent) were all cited.
- Over half of the businesses in the Transition area were looking to train their existing staff to become proficient in the digital skills needs and almost a quarter were going to recruit skilled staff members. Eleven per cent of the businesses felt that to no extent did they have the existing digital skills capabilities to prepare for increasing digitalisation. Broadly there was a confidence among these businesses however, that they could meet their future digital skills needs.
- While 90 per cent of the respondents reported they promoted or delivered clean growth and sustainability, the remaining 10 per cent did not. Of those who did, most examples were standard practice of recycling, using energy efficient appliances and eco-friendly materials and products. Nearly half of businesses reported that they offered some training on sustainability and clean growth and there was little link between a lack of skills and sustainability.
- Despite the challenges brought about by the Covid-19 pandemic, the research shows that training is highly important to overcome challenges such as low productivity and improving revenue and service offering. It is important that businesses are supported to help overcome the challenges they face in accessing training for their staff and that any such training is specific enough to be useful to the business. Digital skills training is an opportunity for wide sectoral impact and with the increasing pace of digitalisation there remain a high proportion of businesses in the Developed area of the Heart of the South West LEP which may struggle to fulfil these skills needs internally. Finally, encouraging closer integration between businesses and the range of training providers available, including universities and colleges is important, and likely to grow with economic restructuring during the recovery from the pandemic induced economic shock.
Rob Matts, Head of Skills Support for the Workforce said:
“This is a very important piece of research that we are pleased to have been able to deliver on behalf of the ESFA. The findings provide first-hand insights from employers that can guide the skills sector in order it meet the training needs of the diverse business community in the Heart of the South West Transitional region. I would like to personally thank the businesses, training providers and stakeholders that have taken time to contribute to this important piece of work."
The full report for the Heart of the South West region can be downloaded here