Conclusions drawn from UK employment and apprenticeship statistics for August 2019 - is there a skills shortage and what should employers do about it?

1. UK SKILLS CRISIS?
A FEW ‘SCARY’ FACTS

2. UK EMPLOYMENT
•76.1% IN EMPLOYMENT (LOWEST ON RECORD SINCE 1971)
•3.9% UNEMPLOYED (1/2 OVER LAST 5 YEARS)
•84%+ IN EMPLOYMENT IN THE AGE RANGE 25 TO 49
OF UK RESIDENT ADULTS AGED 16 TO 64
SOURCE: ONS LABOUR FORCE REPORT 13 AUGUST 2019
CONCLUSION:
UK LABOUR MARKET IS THE ‘TIGHTEST’
IT HAS BEEN FOR A VERY LONG TIME!

3. MANUFACTURING EMPLOYMENT
•3.019m EMPLOYMENT (HIGHEST IN Q2 SINCE 2008)
•133,000 MORE PEOPLE IN EMPLOYMENT (ON Q2 2018)
•68,000 ABOVE THE 5 YEAR AVERAGE
OF UK RESIDENT ADULTS AGED 16 TO 64
SOURCE: ONS EMPLOYMENT BY INDUSTRY STATISTICS 13 AUGUST 2019
CONCLUSION:
CONTRARY TO ANECDOTAL EVIDENCE, EMPLOYMENT
LEVELS IN MANUFACTURING ARE FAIRLY STABLE & EVEN
INCREASING SLIGHTLY

4. SKILLS IN MANUFACTURING
•272,000MANUFACTURING JOBS ARE CLASSIFIED AS ‘HARD TO FILL’
•97% OF EMPLOYERS HAVE RECRUITMENT AS THEIR STRATEGY TO FILL SKILLS GAPS
SOURCE: THE EDGE FOUNDATION – BULLETIN 4 APRIL 2019
•12% OF EMPLOYEES FEEL THEY LACK THE SKILLS FOR THEIR CURRENT ROLE
•39% OF EMPLOYEES HAVE SKILLS UNDER UTILISED IN THEIR CURRENT ROLE
SOURCE: CIPD – OVERSKILLED & UNDERUSED - 2018
CONCLUSION:
SKILLS ARE SCARCE BUT EMPLOYERS RELY ON RECRUITING
FROM THOSE TYPICALLY ALREADY EMPLOYED ELSEWHERE

5. SALARY INFLATION
•3.9% HEADLINE SALARY GROWTH
•1.9% INFLATION ADJUSTED SALARY GROWTH
•2.4% HEADLINE MANUFACTURING SALARY GROWTH
•0.5%INFLATION ADJUSTED MANUFACTURING SALARY GROWTH
SOURCE: ONS AVERAGE WEEKLY EARNINGS (EXCLUDING BONUSES) IN GREAT BRITAIN 13 AUGUST 2019
CONCLUSION:
EVEN FOR MANUFACTURING THE COMPETITION FOR
SKILLED AND UNSKILLED RESOURCE IS STARTING TO
ACCELERATE SALARY GROWTH

6. APPRENTICESHIP LEVY
•£37m UNUSED LEVY FUNDS ‘CLAWED BACK’ IN MAY & JUNE 2019
•DROUGHT FOR NON-LEVY BUSINESSES TO ACCESS FUNDING
SOURCE: FE WEEKLY
•0.8% PRO-RATA INCREASE IN ALL LEVEL APPRENTICESHIP STARTS IN
MANUFACTURING 2017/18 TO 2018/19
SOURCE: DEPARTMENT FOR EDUCATION APPRENTICESHIPS STARTS MAY 2019
CONCLUSION:
INSUFFICIENT USE OF THE LEVY TO TACKLE SKILLS
SHORTAGES BY LEVY PAYERS YET NON-LEVY PAYERS
‘LOCKED OUT’ DUE TO FUNDING DROUGHT

7. HEADLINES
• UK LABOUR MARKET IS ‘TIGHT’
• MANUFACTURING SECTOR EMPLOYMENT IS INCREASING
• EMPLOYERS STILL RELY ON RECRUITING TO PLUG SKILLS GAPS
• COMPETITION FOR SKILLS FUELING SALARY GROWTH
• 8% OF LEVY FUNDS RETURNING TO HMRC
• NON-LEVY PAYERS ‘LOCKED OUT’ DUE TO CO-FUNDING DROUGHT

8. WHAT YOUN SHOULD CONSIDER
• HOW IMPROVEMENT APPRENTICESHIPS, INCLUDING THE NEW
LEAN MANUFACTURING OPERATIVE, CAN DEVELOP YOUR
TEAM’S CAPABILITIES
• AVOID RECRUITING YOUR WAY OUT OF SKILLS SHORTAGES
• BOOST EMPLOYEE RETENTION
• BOOST MANUFACTURING PRODUCTIVITY
• CONSIDER A LEVY TRANSFER TO ENSURE AVAILABLE LEVY
FUNDS CAN BE UTILISED TO ACCESS SKILLS DEVELOPMENT
• LEVY PAYER WITH UNUSED FUNDS - FIND A NON-LEVY PAYER TO HELP
• NON-LEVY PAYERS - FIND A LEVY PAYER THAT WILL TRANSFER TO YOU

9. “IT COSTS NOTHING TO TALK”
07484 102799
barry.moss@gosixsigma.co.uk
www.gosixsigma.co.uk
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