Do We Really Have Skill Shortages?

Do we really have major skill shortages? Are they a myth? Or do we have a problem with recruitment? No recruiter would ever get fired because there’s a skill shortage, so do the individual circumstances around each shortage go unscrutinised?

OECD research finds that the UK has comparatively light skill shortages:

I’ve recently written up some research on the STEM skill shortage for recruitment group Serocor, who specialise in technical recruitment. The STEM sectors are often used as the poster boy for the UK’s skill shortage problem, so seem a good place to start.

2011 data from the ONS showed that of new STEM graduates that year only 16% were working in core STEM jobs in core STEM sectors. A surprisingly large 66% were working in a non-core STEM job in a non-core STEM sector. Whilst not anything new, it was a worsening situation – in 2001 the proportion working outside STEM was 52% so the pool of grads working in STEM jobs and sectors was decreasing. As UKCES concluded in their November 2013 report:

“Mismatches between supply and demand for Core STEM appear to be more about lack of suitably qualified candidates rather than a numerical shortage of STEM degree holders”

This situation starts from graduation, with only 1 in 6 gaining suitable experience, and seems to be increasing. Do we really need more STEM graduates then? Possibly not. The subject of ‘leakage’ was looked at in 2015 SKOPE research on engineering graduates. The training given in technical and scientific areas, allied to a broad understanding of mathematics, makes STEM graduates attractive to a wide range of employers – many in sectors that are thought to be more attractive to work in than core STEM sectors. Increasing the number of graduates is likely to increase this leakage:

“The evidence produced on these initial flows confirms that public policy would be ill-advised to proceed assuming that the response to reported shortages of supply of engineering graduates in a particular subsector, where substantiated, must be to try to increase the numbers on the relevant engineering higher education courses. It should rather be to find ways of helping any sectors genuinely concerned about shortages to take much more seriously the need to significantly increase the attractiveness of their work to engineering students, and in particular to those in the last and penultimate years of their courses.”

In other words increasing the number of graduates won’t necessarily increase the future talent pool. Some more 2015 research, conducted for the European Commission, on STEM graduate shortages in the EU, also found UK employers being a bit choosy:

“In particular in the UK, there is evidence that the expansion of higher education has resulted in a growing employer differentiation between different ‘types’ of graduates, and with employers’ putting a higher premium on graduates from the traditional prestigious universities. This could explain why so many UK STEM graduates end up in relatively low paid service sector jobs with limited opportunities to deploy their STEM knowledge and skills. There is some evidence that the notion of ‘employability’ has a much wider meaning, and therefore cannot be reduced to a list of skills that can be ticked off in curricula if covered. A UK study concludes (Hinchcliffe 2011) that employers place value on a wider range of dispositions and abilities, including graduates’ values, social awareness and generic intellectuality — dispositions that can be nurtured within HE and further developed in the workplace”

Amongst their conclusions they noted a drop in investment in training “acute reported shortages are likely caused by under-investments in training of the existing STEM professionals, as there has been a general drop in investments in continuing education and training since the (financial) crisis” but also that shortages were partly caused through:

• Growing employer expectations regarding the quality of the match
• Entry barriers for STEM graduates who do not have labour market experience
• Risk of under-employment of non-native STEM graduates
• Insufficient absorptive capacity in SMEs to make productive use of the skills of STEM graduates, making the SMEs a less attractive employment and career destination
• Career guidance oriented towards the public sector and large corporations.

The Serocor research I referenced earlier found an interesting mismatch in the way jobs were marketed. Hiring companies seemed to think that technical candidates looked for a good reward package and promotion potential, whereas the candidates themselves prioritised interesting projects to enhance skills, a good working culture and opportunities for flexible working. When I wrote about recruitment challenges for charities last year it became apparent that the problem was less about skills not existing and more about identifying and attracting the specific skills needed, moving away from a reactive approach.

So far I’ve written about STEM candidates, but believe that most of these findings apply to other sectors. The indication from the research quoted earlier was that graduates in any discipline who aren’t seen as immediately ’employable’ end up in other sectors and in lower skilled work.  This leads to a much smaller pool of talent when employers want someone with 3 or 4 years relevant work experience.

Any business struggling with unfilled vacancies has to redefine the problem. Some of the things to think about are:

• What exact skills are we short of?
• Can we afford to hold out for someone who ticks every box?
• How about investing in training or apprenticeships?
• Have we got people already here who could move across and perform this role with some training or encouragement?
• Are we marketing the positions correctly?
• Do we know what target candidates actually look for when they change job and are we offering it?
• What collaborative ways are there to bring skills in?
• Is the job design right – can we re-design it to turn un-fillable roles in to smaller constituent parts that we can staff?
• How can we do workforce planning better to anticipate future shortages?