Stuart Gentle Publisher at Onrec

Scottish employers struggle with skills and labour shortages, but nearly two fifths are unaware of key Scottish Government skills policy initiatives

A series of lessons for employers and policy-makers highlighted in new CIPD report

Labour and skills shortages continue to be a real challenge in Scotland, with 41% of businesses reporting hard-to-fill vacancies. But there are serious gaps in employer responses as well as their awareness of key Scottish Government policy initiatives. That are just some of the findings of CIPD’s major new report – Gaps and opportunities: employer views on skills policy in Scotland.

The report shines a light on some of the experiences and perceptions of employers in Scotland in relation to skills development and training, and offer a series of conclusions and recommendations. Among others, it finds low levels of awareness of key Scottish skills initiatives, with 39% of all businesses unaware of any of the nine initiatives asked about – rising to 52% for small businesses (with 2 to 49 employees). 

In addition, the survey finds employers who recruit directly from school, college or university raising concerns over young people’s poor preparedness for work. A third (33%) of those who hired directly from university or another Higher Education institution say those young people were poorly prepared for work, rising to over half of employers who hired 16 to 18 year olds directly from school.  

Concerningly to the CIPD, a third (34%) of those who feel young people are poorly prepared cite lack of literacy/numeracy skills as an issue. 70% report poor attitude or lack of motivation (e.g. poor work ethic, punctuality, appearance, manners). 

The CIPD, the professional body for HR and people development, has commissioned YouGov to run a survey of over 2,000 employers across the UK, with 509 of them from Scotland. It provides insight across six key areas: 

  • labour and skills shortages 
  • employer approaches to training 
  • relationships with training providers 
  • young people and work 
  • apprenticeships 
  • Scottish skills initiatives.

In addition to improving the pay and benefits package, Scottish employers are responding to hard-to-fill vacancies by upskilling existing staff and hiring apprentices, offering an opportunity for policy-makers in this area. However, we find evidence that the Apprenticeship Levy has not had the desired impact, with just over a quarter (28%) of levy payers saying they increased their spending on training as a result of its introduction. 

With financial barriers a key reason for SMEs who don’t offer apprenticeships, the report finds direct financial incentives would make 35% of small businesses likely to consider hiring apprentices.  

Lee Ann Panglea, Head of the CIPD in Scotland and Northern Ireland, the professional body for HR and people development, said:

“Our new report provides a useful analysis of employer attitudes and views in relation to skills in their organisations as well as outwith. It identifies serious gaps in their engagement with the skills system, but it also highlights opportunities that can be taken. 

“We show clearly that employers who implement strategic skills interventions – e.g. conduct a workforce planning exercise, put a training plan in place, or have a training budget – report a better understanding of skills in their organisations and feel better prepared for the future. We also see the importance of good people management to skills demand. 

“There are lesson here for organisations about how to respond to skills and labour shortages, but also lessons for Scottish Government and its agencies. The fact that over half of all small businesses are unaware of some key skills policy interventions should be a wake-up call.” 

Marek Zemanik, Senior Public Policy Adviser at the CIPD in Scotland and Northern Ireland and the report’s author, said:

“Our findings serve both as a warning and a call to action. We identify some clear gaps in what employers do and in how our education system prepares young people for work, and some remarkably low levels of awareness of key Scottish skills initiatives.” 

“However, as with all challenging findings, there are also opportunities to focus on closing the gaps, to reach those that are disengaged and to build on the willingness to improve.”