Key messages - Skill shortages
Introduction
In our Key Messages series we try to keep things simple and concentrate on the main messages. We’ve used evidence from official sources to back up those messages but have tried not to overburden the reader with information. More information on the issues presented in the series can be found throughout the reports written by Futureskills Scotland and available from their website.
This note presents some key messages from employers in relation to skill shortages.
Key Messages
- Skill shortages are uncommon - they are equivalent to around one percent of employees.
- Employers tell us that skill shortages are most commonly caused by a lack of ‘softer’ core skills such as oral communication, customer handling and problem solving.
- Skill shortages can have a significant impact on the day-to-day running of a business as well as preventing businesses from innovating or growing.
- Employers most commonly tackle skill shortages by changing their recruitment methods.
What is a skill shortage?
A skill shortage is a vacancy which an employer finds hard to fill because applicants for the post do not have the right skills, qualifications or experience. Figure 1 shows how we get from the number of vacancies that exist at any one time to a measure of how many of those are skill shortages.
- First we ask employers how many of their vacancies are hard to fill. A little less than half of vacancies are hard-to-fill.
- Vacancies can be hard-to-fill because not enough people apply for the job, because those that do apply don’t have the qualities the employer is looking for or because of a combination of these reasons.
- Where vacancies are hard-to-fill because there are a low number of applicants this may be because there are features of the job which make it unattractive to potential applicants. For example, location, wages, terms and conditions, unsociable hours and a perceived lack of career prospects may result in low levels of interest in some vacancies.
- Where vacancies are hard-to-fill because applicants lack the qualities an employer is looking for we try to find out exactly what qualities are missing from applicants. A skill shortage occurs only where applicants lack the desired skills, qualifications or experience for the job. For a number of reasons we do not normally consider that attitude, personality and motivation are skills although they are clearly important considerations for employers when making recruitment decisions.
- There were 23,200 skill shortages at the time of the 2006 Employers Skill Survey - equivalent to around one per cent of employees at the time.
Figure 1 Skill shortage vacancies route map
What skills do applicants most commonly lack?
Figure 2
Skills lacking in skill shortage vacancies
Employers tell us that it is most commonly ‘softer’ core skills which are lacking in applicants.
Specifically applicants are most commonly lacking in:
- Oral communications skills
- Customer handling skills
- Problem solving skills
This does not mean that other skills, like literacy and numeracy or IT skills, are not valued by employers. It’s just that a lack of these types of skills are not mentioned by employers as the reasons for skill shortages - that is, these types of skill are available in the labour market when employers require them.
What problems are caused by skill shortages?
Figure 3 Problems caused by skill shortages
The most common problems indicate that skill shortages can have a negative impact not only on the day-to-day running of a business but can also prevent businesses from improving their performance.
The most common problems include:
- Difficulties meeting customer service objectives.
- Delays developing new products or services.
- Difficulties meeting quality standards.
- Difficulties introducing new working practices.
- Delays developing new products or services.
- Loss of business or orders to competitors.
- Increased operating/running costs.
What do employers do when they have a skill shortage?
Figure 4 Employer's responses to skill shortages
Because skill shortages only appear during recruitment the most common response by employers to skill shortages is to change their recruitment practices in order to find a candidate. This might include using a wider range of recruitment channels than usual in order to find a suitable candidate.
Other responses include changing the job specification or recruiting a less well qualified or less skilled recruit than might normally be the case and offer them training.
