It’s a long paper, and quite technical, and much of it deals with the vexed question of how to identify skills mismatches and shortages in the first place, which is something of great interest to me, but a trifle niche. But there are some important findings in here for policy, practise and employers, and I’m going to look at it from the perspective of graduate recruitment.
The report combines analysis of data from surveys such as the 2013 Employer Skills Survey (the 2015 survey has subsequently been published) and interviews and case studies of employers who are experiencing skills mismatches and shortages to explore why they’re happening and what the response is, and it’s this part that is particularly interesting.
The basics of the report are that the authors believe that there are not many absolute skills shortages – where there are just not enough people with certain skills and training to fill demand – in the economy and where they are tend to be in management, in graduate roles in IT, in engineering and in business services (the latter in roles such as procurement and marketing/PR), and in skilled trades. It also, interestingly, finds that there’s little evidence that we have too many graduates either, but does counsel that
graduates who were mismatched (over-qualified and over-skilled) in their first job had a higher likelihood of still being mismatched to their job five years later
which has implications for the way we advise graduates on their early stages of their career.
There is also a mixed view of the apprenticeship agenda – there is a clear potential role for apprenticeships in meeting certain skills shortages, but some employers still need convincing.
It is at an intermediate level where skills supply is not meeting demand. Apprenticeships are well placed to meet this demand but there is prima facie evidence that employers are unwilling to make what often amounts to a substantial investment in this type of training because of concerns about it meeting their specific, unique skill needs and being able to retain the services of the apprentices once they have completed their training…. Accordingly there needs to be some means of reducing the risk that employers face when investing in programmes such as Apprenticeships
But the part that interests me is where the researchers delve into why employers struggle to fill vacancies. The Employer Skills Survey gives the most common reason as ‘low number of applicants with the required skills’, which can give the impression that there’s nobody out there, or that applicants are not good enough. In actual fact, eight main overlapping reasons emerge from the work – I’ve condensed them to seven as I think two of them can be combined.
- Not enough people. The economy has grown relatively quickly since economic recovery began and so some employers who want to expand have found that there are not enough qualified employees in some fields to meet demand. Engineering, IT and business services are all affected here.
- Disadvantageous location. Anywhere that is off the beaten track and, in particular, does not have good public transport links, is often perceived as a less desirable job and those locations will need to be sold to potential employees. Graduates tend to be more concentrated in larger cities and areas outside those cities may find a smaller talent pool to draw upon. And not everyone wants to work in London, either.
- Narrow job specifications. The narrower you make your specification, the fewer people will have the skills you want and if the role is especially niche, the less likely training providers will run the specific courses you need people to have attended. This can often go hand-in-hand with other issues on the list. In these cases, employers may need to be a little more flexible with their requirements and readier to accept the need to train new graduates.
- Wanting cutting edge skills. Rapid technical change means employers seek skills mixes that may not really have come to the employment market yet in order to exploit new business opportunities. Obviously, this is particularly pronounced in the tech sector. We need to think about how universities can address issues of rapidly moving skills demand in the context of degrees that typically take three years to deliver, but also employer training may have to play a central role.
- Wanting skills that are on the way out. Skills supply can be falling faster than demand. This is best illustrated with an example – a lot of people have old gas boilers which need servicing, but the technology is obsolete and newly trained gas engineers are obviously trained in new tech. As experienced engineers retire, their skills are still needed at the moment, but new engineers are understandably reluctant to train in outdated skills. This is less of an issue in the graduate market, but it’s not one that’s readily soluble at the moment unless there’s a way to be very creative with training.
- Unattractive terms and conditions. Never assume that a company – particularly a smaller business – really knows what the current going rate for new employees in their industry and in their area actually is. They will pay what they think they can afford and when that happens to be below the local wages for the people they need, that’s a problem. This seems to be a particular issue for graduate roles in tech, where starting salaries can be quite high. Employers in this position may need to learn to sell their positions effectively, to write better job ads, and we need to help them fully understand local labour market conditions.
- Unwillingness to compromise. ‘I want the perfect employee’. The employer has written a job spec, and if they don’t get exactly that graduate, why, they won’t recruit at all. This specification often asks for a specific mix of technical skills, soft skills, the right qualification (employers here are wary of what they see as overqualification as they see that as a signal that the employee will not wish to stay) and the right kind of employment history (such as not having moved jobs very often). There’s a lot going on here, to do with managing employer expectations, and with ensuring that graduates – particularly technical graduates – supplement good technical skills with soft skills to ensure they can get good jobs.
Employers who struggle to recruit find increased pressure on existing staff, lose business, and struggle to innovate and adapt to change, so it’s in everyone’s interest that we support them to understand the labour market, to make sure they write good job adverts and have realistic expectations of the talent that is out there so that business can find it easier to get – or train – the people it needs to grow.
There is a finite supply of talent out there and every time you specify a skill or an attribute, you exclude a few more people who feel they don’t match that specification. It’s not hard to get your potential employee pool down very quickly, and so we all have to work to make sure that pool has the best talent mix we can.