Survey highlights recruitment difficulties and skill gaps

Only one in 20 employers in England struggle to fill vacancies because of skill shortages, according to a national survey published in July 2005.

The National Employers Skills Survey 2004 (1.4Mb pdf) (NESS 2004), commissioned by the Learning and Skills Council (LSC), together with the Department for Education and Skills (DfES) and the Sector Skills Development Agency (SSDA), is the largest survey of skills issues faced by employers in England. Based on over 27,000 telephone interviews with companies of varying sizes, across different sectors and regions, it also draws comparisons with previous employer skill surveys, including NESS 2003.

Recruitment difficulties

According to NESS 2004, the proportion of establishments spontaneously reporting ‘hard-to-fill vacancies’ and ‘hard-to-fill vacancies caused by skill shortages’ has remained unchanged since 2001, at 8% and 4% respectively.

When prompted, 6% reported ‘skill-shortage vacancies’. The density of such vacancies as a proportion of employment has declined from eight per 1,000 employees in 2001 to five per 1,000 employees in 2004.

The majority of vacancies are found among establishments with fewer than 25 employees. Such establishments represent one third of all employment but account for half of all vacancies and 56% of skill-shortage vacancies. Recruitment difficulties and skill shortages were reported to be less acute in London, while the South East accounted for the highest number and concentration of skill-shortage vacancies. Sectors with a higher than average demand for skilled trades, such as the construction and automotive industries, were among those reporting the greatest difficulties in obtaining suitably skilled recruits.

Skill shortages tended to be more marked among certain occupations. Skilled trades constitute 9% of employment yet represent 20% of skill-shortage vacancies. Personal service occupations, which account for 5% of employment, were also found to have a higher share of all skill-shortage vacancies (12%). However, it should be emphasised that this is an occupational area with high levels of staff turnover and a higher than average proportion of hard-to-fill vacancies.

It is interesting to observe the reasons employers give for finding vacancies hard to fill (see table). While 32% of employers in 2004 reported that this was because applicants lacked the necessary skills, other reasons included ‘not enough interest in the job’ (23%), ‘poor terms and conditions’ (17%), ‘shift work’ (11%) and ‘poor career progression’ (3%). This might indicate that, in a period of low unemployment, a significant proportion of employers’ recruitment problems may relate to people’s reluctance to take low paid, ‘dead-end’ jobs.

Source: Adapted from the National Employers Skills Survey 2004: Main Report (1.9Mb pdf), July 2005, p. 20

Skill gaps

Another interesting finding is that the proportion of staff described by employers as having ‘skill gaps’ has fallen. In 2004, 20% of establishments reported skill gaps in their workforce and 7% of those in employment were said to be not fully proficient. This compares with figures of 23% and 9% respectively in 2001. Skill gaps were more commonly reported among staff in lower skilled occupations (e.g. sales and customer service, and elementary tasks) as opposed to higher grade occupations (e.g. managers and professional groups).

Nevertheless, around three quarters of skill gaps were seen as being relatively transient in that they applied to new recruits or recently promoted staff. Employers perceived that 27% of staff with skill gaps lacked the motivation to improve their skills and 24% were unable to cope with change. However, employers admitted that 27% of employees with skill gaps were not fully proficient, partly because of their own failure to train and develop their skills.

Training and development

NESS 2004 indicates that 64% of establishments had provided training to staff in the previous 12 months and that 61% of the workforce had received training through their employer. This means that 36% of employers do not provide training. Around three quarters (73%) of the establishments that offer training provide it to the majority of staff. Establishments with skill gaps or skills shortage vacancies are also more likely to provide training than employers in general. It would appear that training is often job-specific or related to health and safety; 80% of employers that train their employees offer courses in these areas. Compared with NESS 2003, there has been an increase in the percentage of employers with a formal business plan (58%, up from 56%), a training plan (44%, compared with 39%), and/or a budget for training (34%, compared with 31%).

Jonathan Payne, University of Warwick