Skills shortage increase sends an important message to us all

New data from the Employer skills survey published September 2023 shows persistent skills challenges that businesses are facing. Over 72,000 employers in multiple sectors were surveyed to provide insight into the evolving labour market, focusing on skill-shortage vacancies, training and skill gaps across all regions in the UK.

Skills shortage is still persistent  

UK employers have seen an increase in skills shortage; more than 36% of vacancies across the board were short on skilled applicants in 2022, an increase from 22% in 2017.  

Furthermore, the data also shows that one in ten employers had a skills shortage vacancy at the time of being interviewed. This suggests that the gap between employer expectations and the available skills in the local workforce is widening.

This gap is markedly more than in previous years, which could be linked to the impact of COVID-19 and the preparedness of young people entering the workplace for the first time. 

Findings from organisations like the Prince’s Trust and Youth Employment UK (YEUK) can help to gain a deeper understanding of the skills gap from a youth perspective. YEUK’s Youth Voice Census 2023 established that a lack of work experience is the biggest barrier young people not in work face. Currently, most are navigating the journey to the world of work, unsure about the skills valued by employers and the route to gaining those skills.

However, despite the barriers they face, Prince’s Trust research finds that more than two-thirds (70%) of young people feel determined to achieve their goals in life, with sixty-four agreeing they can overcome challenges but need help to build their confidence and skills.

While skills shortages are a concern across various sectors, some industries face more significant challenges   

Interestingly, even employers that did not face skills shortages in their sector indicated that their workforce needed higher skills proficiency. Some of the most significant skills gaps were found in what is seen as typically attractive job markets. Over the last five years, the Skills Gap density (the proportion of employees judged not fully proficient ) has increased the most in three industries: Financial Services, Business Services, and the Hotels and Restaurants sector. 

As AI, digitalisation and the Net Zero economy continue to grow, the skills needed to work in these industries will continue to evolve, thus exacerbating the current skills gap if it is not addressed. 

Contrary to a simple North-South divide narrative, this report reveals that the situation is more intricate. The South East, North East, and East Midlands have seen the highest proportion of employees judged as not fully proficient when compared to 2011. In contrast, London, the South West, and West Midlands boast the lowest reported proportions of employees not fully proficient.

Employers with an eye for future talent should start early engagement with education.   

The percentage of establishments grappling with at least one skill gap has surged to 15%. Paradoxically, even as employers wrestle with this skills deficit, they seem to be less inclined to invest in staff training, with the percentage of establishments that have funded or arranged any training for their employees over the past year decreasing to 60%, down from 66% in 2017. This shift raises important questions about the reasons behind this decline and the potential solutions to reversing it. 

The increasing prevalence of skill gaps across all nations in the UK poses a complex challenge for employers but one that we think can be overcome with early engagement with talent while they are still in education.. We have seen great practices in the past few years, but we need to turbocharge this via employer investment in talent pipeline development. Recognising the value of work placements and other experiences of the workplace in addressing the skills gap at root is the first step towards creating a competitive and resilient workforce pipeline in today’s ever-evolving job market. 

We at Speakers for Schools know the health and construction sectors are some of the sectors most engaged to offer work experience. They know too well the costs of the growing skills gap.  

The message is clear: We need more sectors and businesses to take action to close the growing skills gap by building early talent pipelines through inspirational talks and meaningful work experience. The sheer size of this growing challenge means we can’t overlook this any longer, or we risk losing our competitiveness as an economy. 

Funbi Akande is the Policy Officer at Speakers for Schools. The latest Employee Skills data can be found here.   

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Footnotes:

¹https://www.youthemployment.org.uk/dev/wp-content/themes/yeuk/files/youth-voice-census-2023-report.pdf

²https://www.princes-trust.org.uk/about-us/news-views/princestrustnatwestyouthindex2023

³https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1143825/The_Skills_Imperative_2035_labour_market_projections_-_general_guidelines.pdf 

What role does work experience play in the success of young people? 

The results of Youth Employment UK’s annual Youth Voice Census launched in September 2023, and the full report speaks to the experiences young people aged 11 – 30 are having where they live, in education, employment and looking for work. Set across a complicated and challenging economic, political and environmental landscape, it fully explores the good, bad and ugly that young people are experiencing in 2023. 

The key findings tell a story of young people feeling disconnected from their communities and of their fear that opportunities are so scarce that they are constantly in competition with each other. Young people feel left behind, particularly after hearing narratives of ‘catching up’ to pre-Covid levels but not having received the support or resources they need. The future feels uncertain and something that they feel wholly unprepared for.   

For young people currently in secondary school, we see shoots of positivity. Young people are receiving more careers and employability activities in the classroom than in previous years, and they are more likely to agree this year that they feel that they are being prepared for their next steps. We see, too, the closest parity we ever have in young people hearing about apprenticeships and university as valued options. 

We cannot ignore the disruption that the education system continues to face. 55.1% of young people in secondary school told us that their learning was disrupted ‘a lot’ or ‘a great deal’ in the last 12 months. Mental and physical health of young people and their teachers has played the biggest part in this disruption, alongside teaching and travel strikes.  

Who is getting work experience?  

The pandemic has changed many factors for how we live, work and study, but it has drastically altered access to work experience for young people and employers. Just 29.2% of young people in secondary school had access to work experience in the last 12 months, a worryingly low number and, despite an increase in all other careers and employability experiences in schools, an opportunity that continues to decrease year on year. What is worrying still is the proportion of young people who were offered work experience that then did not undertake it, only 52.3% of young people offered work experience were able to complete it. For most, being able to find a placement post-Covid was an issue, but young people also told us that they did not feel ready to look for or go on work experience.  

Of those that had work experience, only 65% had one placement, with 20% of young people having had two experiences. Male respondents were most likely to have received work experience over other genders, with the continuing disparity seen in previous years in access for Black respondents and transgender respondents who were 10% less likely to have had work experience than their peers.  

This unfairness manifests in other aspects of work experience, too. 51.6% of young people had someone support them to find their work experience placement. Those who had no support to find placements were most likely to have protected characteristics and disproportionately more likely to be Black, transgender or have been eligible for free school meals.  We know too, that those with protected characteristics are worried most about their lack of networks and its impact on being able to find a good job in the future. The lack of additional support around these groups continues to compound issues in equity and equality of access. It is perhaps unsurprising then that these groups either miss out on work experience or end up in a placement that is not interesting to them.  

What happens after secondary school?  

The older you get and the closer you are to working age, the less work experience you receive, with just 17% of those in university having had any access to work experience. Coincidentally, young people’s confidence in their future and that they will be able to access quality work decreases as they age, too, from age 19 onwards, young people are less likely than their peers to think they will find a good job.  

Why is it so important?  

A lack of work experience has been featured in the top three barriers young people have to access work for the past six years. For those in education it was the biggest factor, 54.6% thought it would be the thing that holds them back from being successful when looking for work. Those looking for work feel constantly unsuccessful in their job hunt because work experience requirements are too high, and it is one of the biggest factors young people in work currently feel could have supported them to find better-suited employment faster.  

Young people are quick to tell us that with support to find opportunities and to know how to make the most of them, work experience is not just a good thing for their CV and skill development but for their motivation and confidence too. They recognise that we have to think differently about work experience and gaining experiences of work, they want to see shorter, varied placements. Traditional week-long placements feel hard to acquire for young people and are difficult for employers to manage too. Young people see the value in having a number of opportunities to experience different types of jobs, working environments and departments across different years in education. We must support young people to find quality opportunities for work experience that are accessible to them, or we will continue to perpetuate cycles of inequality.  

Lauren Mistry is Deputy CEO of Youth Employment UK and references the latest report using data collected from over 4,000 young people. You can read the full report here.