Over half of employers don't think they can fill skills gaps

The 'CBI/Edexcel Education & Skills Survey 2008' of 735 firms, employing 1.7 million people between them, identifies skills gaps in the workplace, reveals the skills employers value the most and spotlights how employers are managing to source highly skilled people with the right qualifications.

It is striking that over half of employers (53%) lack confidence in their ability to find enough people with the right skills for their business. And basic skills - the ability to read, write and do simple arithmetic - are still a major cause for business concern.

Basic skills

Two-fifths of employers had serious concerns about employees' basic literacy and numeracy skills. On the literacy side, the main problems are not being able to write in sentences, spell correctly or use accurate grammar. On the numeracy side, the key issue is the inability to spot simple errors or rogue numbers.

While most employers (63%) described staff in high skilled roles as 'good', fewer did so for those in intermediate level jobs (43%) and even fewer for lower skilled staff (35%).

Poor basic skills have a serious impact on customer service according to two-fifths (40%) of employers, and lower productivity according to a third (34%). Both issues have damaging implications for business performance and around a quarter of employers are investing in remedial literacy and numeracy training.

IT skills are also seen as weak, with over half of employers (56%) concerned about the ability of existing employees to use computers. The skills of people already in the workplace are not keeping pace with the rapid development of technology. Again, many firms (69%) are investing in training to raise IT skills of existing staff.

The CBI's Deputy Director-General, John Cridland, said "A worrying number of employers have little confidence that they will be able to plug their skills gaps. In our new stock take of the nation's skills, too many firms also say poor basic skills are hampering customer service and acting as a drag on their business's performance.

"Being skilled is all the more important in an increasingly global economy, and our message to students is that your hard work to attain the right skills and good qualifications is essential to securing quality, well-paid jobs after school, college or university.

"This survey is also an alarm call to students and universities, who may be surprised by just how much employers also value the 'softer' skills that make people more employable. This means being a good team-worker, communicator and problem-solver is vital and getting work experience goes a long way with a future employer."

Graduate skills

The 32% of jobs currently requiring degree-level education is likely to grow , as the UK continues to move towards an economy built on value-added services, high-tech and knowledge-based firms.

This survey shows that employers want graduates who can communicate well and work as part of a team. Graduates' positive attitude to work and good communication skills are seen as more important than the degree subject or result. The majority (86%) of employers ranked positive attitude and 'employability' in their top three demands. These skills include team-working, communication, business awareness, self-management and problem-solving. Having relevant work experience, such as a placement during a degree course, was also ranked as vitally important, by 62% of bosses. However, while 56% of employers said degree subject was a top factor, degree result was named by just 32%.

Firms employing people with skills in science, technology, engineering and mathematics ('STEM skills') are considerably more likely to demand a specific degree subject - 77% of construction companies, 65% of manufacturers and 61% of energy and water firms, compared an average of 30% across all sectors. There is high demand for STEM graduates in all sectors - 92% of firms want people with these skills.

By 2014, it is expected that the UK will need to fill over three-quarters of a million (730,000) extra jobs requiring highly numerate, analytical people with STEM skills, making a net total of 2.4 million of these jobs in six years' time.

Yet currently, six out of ten (59%) firms employing STEM-skilled staff say they are having difficulty recruiting, and the low take-up of STEM subjects at university is a large part of the problem. There has been a 15% fall in engineering and technology graduates (23,300 to 19,700) over the past decade.

Employers are acting rationally by looking abroad to hire STEM graduates. A third (36%) of larger firms are recruiting from India and 24% from China. Larger firms are twice as likely as smaller ones to be looking at the expanded EU, which includes states such as Poland, to hire people with STEM degrees. Overall, a third of firms (35%) say they will look to Europe in the next three years.

Edexcel's Managing Director, Jerry Jarvis, said: "The Leitch review of skills, published well over one year ago, provided a wake-up call for us all. It showed that a third of UK adults do not hold a basic school-leaving qualification - that's double the proportion in Germany. It also drew into focus that whilst the UK is producing 250,000 graduates every year, China and India are producing four million. The implications for our global economic competitiveness are clear.

"All of us involved in the UK's education and skills must work ever closer in partnership to address this major challenge by breaking down the institutional barriers between education and the workplace to create a new culture of learning."

It is also clear that employers do not believe that going to university at 18 is the only route to success for young people. Around half of the employers surveyed offer apprenticeships, giving young people a chance to develop valuable vocational skills and have a strong start to a rewarding career. Many companies make sure their apprentices are able to go on to higher-level studies if they have the right attitude and ability.

But there is evidence that bureaucracy, cost, and a lack of suitable candidates are holding back greater business involvement, which the Government must tackle. Eighty one percent of the largest employers report being bogged down by red tape, 57% have difficulty finding suitable applicants and 22% of all firms find the scheme too costly.