South West Regional Skills Enterprise and Employment Analysis 2007/2008

Final Report

4.2 Current Demand for Skills

4.2.1 Skills Shortages

Skill shortages affect particular sectors and particular occupations within those sectors disproportionately. When they occur, they can have an impact, often a major impact, on the employers who experience them. This may lead to loss of business, difficulty in maintaining quality of output, and holding back business development.

In the South West, the sectors with most SSVs, in terms of volumes, are:

• Construction (Construction Skills)
• Hospitality (People 1st)
• Retail (Skillsmart)
• Care (Skills for Care and Development), and
• Engineering (SEMTA), in that order.

However, if we look at the intensity of the problem at sector level, we find that SSVs in the region comprise a higher proportion of vacancies in:

• Process manufacturing (Proskills)
• Public transport (Goskills)
• Building services engineering (Summitskills)
• The garage industry (Automotive Skills)
• Construction (ConstructionSkills)
• Land-based industries (Lantra) and engineering (SEMTA)

These are sectors where Level 2 and Level 3 skills are increasingly at a premium.

Figure 2: Volume and intensity of skills shortages by SSC, South West, 2005 (Click image to open in new window)

When SSVs are considered in terms of the occupations (see Figure 3 below) in which they occur, NESS 2005 concludes that skill shortages most strongly affect technical, craft and operative recruitment. Over a quarter of the South West’s SSVs (26%) concern skilled trades compared with only 17% in England as a whole. The ’personal services’ occupational group (including care assistants, lower grade nurses, and bar and restaurant staff) is also significantly affected by recruitment difficulty and skill shortage.

Figure 3: Employment, hard-to-fill and skills shortage vacancies by occupation, South West, 2005, percentages of total (Click image to open in new window)

Source: NESS 05

It might be argued that recruitment difficulty and skill shortage are not actually that important. Only one-in-110 jobs was the subject of recruitment difficulty of any kind at the time of NESS 2005 and only one-in-190 was the subject of skill shortage.

Conclusions

Skills shortages and gaps are diminishing and lower than the national average. However, where they occur, they are highly focused in certain occupations and industries within the region. Many of these are persistent and long standing, particularly in relation to skilled trades. The sectors in which shortages are identified already map to a large extent onto the existing LSC priority sectors. The persistence of skills shortages in the craft and skilled trades points to the need for concerted action here (see Section 4.4 below).

The RSP's Sectors Operations Group is already contributing to this by establishing a dialogue between individual sector groups and partner agencies to develop solutions for the short and the medium term and should be tasked with taking forward this issue.

The Leitch Interim Report supports this view suggesting that fluctuation in SSVs suggests that, for most occupations, the market will adjust to fill skill-shortage vacancies. For example, migrant workers can bring skills into the economy to fill short-term SSVs, and there is evidence to suggest that migrant labour has a positive impact on the UK’s productivity. Evidence suggests that migrants are increasingly important in filling recent skill shortages.