This summer LCCI launched a new survey that is designed to map out the skills needs of London businesses. The Quarterly Skills Survey asks firms about the gaps they have in their workforce, and what steps they are taking (if any) to meet those needs.
The COVID-19 pandemic – coupled with the introduction of a new immigration system – has put immense pressure on the labour market in the capital, with London’s unemployment rate remaining well above the UK average. Businesses have had to adapt to new ways of working, which is leading to rising demand for different sets of skills.
This government has rightly put a great focus on the need for a robust further education sector to complement higher education and provide alternative pathways for people to enter the workforce. The Skills and Post-16 Education Bill, along with the new Local Skills Improvement Plans, will hopefully lead to greater business engagement in the skills planning system, but will need to be supported by evidence.
This survey should help to inform policymakers, businesses and education providers of the areas which need the greatest attention.
Running theme
The first results show what has been a running theme in LCCI skills research – government training schemes such as apprenticeships and traineeships are not being utilised by micro companies (those with 0-9 employees), the firms who make up the vast majority of London’s business demographics. According to the polling, only 5% of micro businesses employ apprentices, compared to 31% of larger companies (those with 10 or more employees). Larger businesses were significantly more likely to use one of the public training schemes (apprenticeships, traineeships or the new
Kickstart scheme).
There was a near-even split between the share of London businesses who do and do not face barriers when it comes to meeting their skills needs. For those that do, the chief barrier was school/education leavers lacking the necessary skills that their business needed. The aforementioned education provision reforms that are already under way – particularly in further education – should see greater collaboration between businesses and providers, which may help to tackle this issue.
Costs of training being too high, a lack of budget for investment in their workforce, and a lack of skilled candidates in the labour market were the other most cited barriers. Of course, the current financial constraints for many of London businesses have led to fewer resources for training. However, the issue of micro firms not having the capacity to train their workers or engage with training schemes has been seen elsewhere in LCCI
skills research.
Soft and hard skills
In terms of the types of skills that businesses needed, the results show demand for both soft and hard skills. For micro businesses, sales or business development skills were the biggest gap, followed by time management. Sales or businesses development skills were also sought after by larger companies, alongside project management.
What was clear was that for businesses of all sizes, there is a strong need for digital skills: data handling and analysis, and advanced digital skills (such as programming or web design), were both in the top five most cited gaps for both micro and larger companies.
This need for digital skills is only expected to grow too, with 25% of firms expecting to need advanced digital skills over the coming three years. Sales or business development will also be highly sought after. Demand for time management skills is expected to grow over the coming three years, which may reflect the sudden shift in companies’ ways of working with more people likely to embrace some form of hybrid working pattern
going forward.
A need for retraining
Mapping out skills needs in London has arguably never been more important given the current headwinds the labour market faces. The latest vacancies data from the Office for National Statistics suggest there are nearly one million vacancies across the UK. There is no question that the COVID-19 pandemic has seen people leave industries such as hospitality and retail, to find work elsewhere whilst lockdown restrictions were imposed. Similarly, the UK’s exit from the European Union has seen large numbers of non-UK born workers leave
the country.
There will be a significant need for retraining people who have left their industry, and businesses – particularly the smallest companies – will need support from education providers and the government in helping to fill their skills gaps and support the economic recovery.
The findings from the survey should help to inform decision-makers. Going forward, new questions will be put to London firms to hone in on different areas, such as digital skills, with the aim of continuing to provide an up-to-date view of skills gaps in the capital.
This article first appeared in the September-October issue of LCCI’s London Business Matters publication, which is available at www.londonbusinessmatters.co.uk
Stephen Jones
Policy Research Manager LCCI
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See the full report at www.londonchamber.co.uk