Majority of employers fear lack of sufficiently skilled people to meet tech challenges ⁰

Three quarters (75 percent) of businesses expect to increase the number of high-skilled roles over the coming years, but 61 percent fear that there will be a lack of sufficiently skilled people to fill them. This is according to the 2017 CBI/Pearson Education and Skills Survey which highlighted that 62 percent see strong competition for candidates with appropriate qualifications as the most widespread cause of skills shortage, followed by a lack of candidates with appropriate qualifications (55 percent). According to the report, while the Brexit debate generates plenty of heat, ‘it’s the white heat of technological change that will mean huge change to the jobs of 2030’. Add that to the obvious question about what skills we’ll need to ‘home grow’ in the absence of free labour movement, and the skills gap is brought into sharper relief argues the report.

Josh Hardie, CBI Deputy Director-General, said: “Skills have to be the beating heart of the UK’s Industrial Strategy – it’s the best growth strategy a country can have. More high-skilled opportunities are good news for our future – and a sign we can make progress on productivity – but this is tempered by the growing urgency around skills shortages. Growing our skills base needs a greater focus on what skills provision actually achieves for an individual or business, instead of just the existence of training or apprenticeships being judged a success. At the beginning of the major technical education reforms, and with the survey showing challenges for the apprenticeship levy system, that shift in mindset by the Government is vital to UK growth.

Added Geoffrey Taylor, Head of Academic Programmes at SAS UK & Ireland: “The statistics released by the CBI reiterate the resounding and continued importance of STEM skills for the future of UK business. As the UK starts to negotiate on the way forward with Brexit, we must pay closer attention to the UK’s investment in these areas or risk falling behind on the global stage. To remain globally competitive and thrive in a modern and tech-centric economy, it’s important to make the next generation aware of the real-world opportunities available to them and how critical these skills are to businesses nationwide. Our research shows that big data and the internet of things (IoT) could add £322 billion to the UK economy over 2015-2020 and there is high demand for those with the skills to work in these fields. The emergence of artificial intelligence, robotics and smart technologies means more data is being created and analysed than ever before. Yet there remains a dearth of talent to extract relevant insights from all this information, leading to better, evidence-based business decisions.“

When asked in the survey about the impact of the introduction of the £2 billion apprenticeship levy, 58 percent of firms plan to increase apprentice programmes – but it is not clear how much of this is genuinely new provision. Many firms indicated they will use the levy to upskill their current workforce and replace other existing training, with 63 percent planning to reconfigure existing training into apprenticeships and 27 percent expecting to cut back on non-apprenticeship training activity to meet levy costs.In terms of the apprentice levy, survey responses show:

• Businesses are adapting their training approach to meet apprenticeship levy cost recovery rules, with two-thirds (63 percent) planning to reconfigure their existing training into apprenticeships
• Over half (58 percent) of respondents plan to create new apprenticeship programmes and close to half (46 percent) expect to increase apprenticeship places
• Some of this provision will be existing training reconfigured or in place of other schemes being cut, as around a quarter of companies expect to cut back on non-apprentice training (27 percent) or curb their graduate intake (23 percent)
• A third of businesses (33 percent) cited lack of clear guidance as the biggest challenge they face in the first year of the levy’s operation, while nearly as many (29 percent) highlight the inflexibility of the funding rules hampering their ability to take on more apprentices – supporting the CBI’s longstanding call for greater flexibility in the system
• Many businesses are struggling to fill apprenticeship places: almost half (49 percent) of respondents have experienced difficulty in recruiting apprentices or expect to do so in the next three years.

Said Hardie: “Given the speed and scale of the introduction of the apprenticeship levy, companies have worked very hard to get ready against a tight timescale. The survey results give an early indication of employer behaviour, reinforcing business’ long-standing frustration that the levy’s narrow design pushes their focus onto cost recovery rather than good training that will drive staff progression and wider economic benefits. Increased flexibility will be vital so businesses can fund a wider range of training that better reflects employer and individual’s skills needs. Looking ahead to the introduction of the new technical education routes, we need to ensure we don’t employ the same rushed and politically-driven approach to system design. Business is looking to progress the positive partnership with the Department for Education, in particular helping to improve the levy’s impact and evolve the system so it works for everyone.”

See more in Helping the UK thrive, the 2017 CBI/Pearson Education and Skills survey