Skills in Scotland 2003

Futureskills Scotland undertook a large-scale survey of Scottish employers in 2003. The survey covered over 3,000 workplaces. Results have been produced which are representative of the economy as a whole.

Employers were asked to identify the main challenges they faced and to provide information on training and recruitment activity :

• ‘Attracting appropriately skilled staff’ was a middle-ranking challenge for employers, behind challenges such as increased competition, business regulation and changes in market structure
• There were 2.2 million employees in Scotland at the time of the survey and 69,000 vacancies, a vacancy rate of three per cent
Employers considered that 30,500 vacancies were hard-to-fill, some 44 per cent of all vacancies

Hard-to-fill vacancies had consequences for employers including:

• Difficulties meeting customer service objectives (cited by 41 per cent of employers with hard-to-fill vacancies)
• Increased operating costs (cited by 39 per cent)
• Difficulties meeting quality standards (cited by 35 per cent)
• Loss of business or orders to competitors (cited by 29 per cent)
• Delays developing new products or services (cited by 29 per cent)

Vacancies can be hard-to-fill for a number of reasons other than applicants’ skills – such as the limited number of applicants or the perceived attitude, personality or motivation of applicants. However, where a vacancy is hard-to-fill because applicants lack the necessary skills, qualifications or experience, then this is known as a skills shortage vacancy.

Of the 30,500 hard-to-fill vacancies identified, 12,100 were skills shortage vacancies. Skills shortages therefore accounted for 39 per cent of all hard-to-fill vacancies. Skills shortage vacancies were more likely to arise in establishments with a high proportion of part-time and/or seasonal jobs. Hard-to-fill vacancies, including skills shortage vacancies, may therefore be caused to some extent by the nature and characteristics of the job on offer.

Where skills shortage vacancies occurred, employers felt that applicants were most commonly lacking ‘softer’ skills, such as:

• Customer handling
• Oral communication
• Team-working
• Problem solving

Employers responded to hard-to-fill vacancies and skills shortages by:

• Changing the job specification by allocating some tasks to other staff or by offering increased financial incentives
• Changing recruitment practices by using a more extensive range of recruitment channels
• Considering a wider range of applicants
• Offering training to less well-qualified recruits

A skills gap occurs when an employer deems an employee not to be fully proficient at their job – a very high standard. Skills gaps therefore relate to those in work, whereas skills shortages relate to a specific type of hard-to-fill vacancy.

Skills gaps were more prevalent than skills shortages, affecting one in four Scottish workplaces and affecting nine per cent of employees. Skills gap occurred most often among employees in jobs that typically require lower levels of skills and qualifications.

Most skills gaps are transitory occurring because employees are new to the job and haven’t completed their induction or ‘haven’t learned the ropes yet’. Such transitory factors were important in three in every five employees with a skills gap.
The skills that employees with a skills gap were considered to lack were predominantly ‘softer’ skills, such as:

• Planning and organising (cited by 63 per cent of employers)
• Problem solving (61 per cent)
• Customer handling (61 per cent)
• Team working skills (53 per cent)
• Oral communication skills (51 per cent)

Over one-third of employers with skills gaps said that the gaps had caused no particular difficulties. This is consistent with the notion of a high proportion of skills gaps being transitory.

The most frequently cited difficulties arising from skills gaps were:

• Difficulties meeting customer service objectives (affecting 36 per cent of employers with skills gaps)
• Difficulties meeting quality standards (35 per cent)
• Increased operating costs (32 per cent)
• Difficulties introducing new work practices (31 per cent)
Difficulties introducing new technology (20 per cent)

Skills gaps therefore impacted on businesses’ customer service, quality, innovation and operating costs. Almost all employers with a skills gap had taken action to overcome these gaps. The most common approaches were:

• Provide further training for staff (78 per cent)
• Increase or expand trainee programmes (49 per cent)
• Changing work practices (45 per cent)
• Relocating work within the company (37 per cent)
• Increasing recruitment (20 per cent)
• Expanding recruitment channels (19 per cent)

Two-thirds of employers had funded or arranged staff training in the year prior to the survey. Over two in every five employees had received off-the-job training in the year prior to the survey.

Employees in jobs which required higher levels of skills and qualifications were also more likely to have received training than those in lower-skilled occupations. Among employers who did not provide training, one-third said training was not necessary in their business and a similar proportion said that staff were already fully proficient. Relatively few employers said that lack of funds or lack of available training was the reason for not training staff.

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