Member Article

Skills shortages continue to hinder North East businesses, new report shows

The 2015CBI/Pearson Education and Skills Survey has revealed that over half of businesses in the North East fear they will not be able to recruit enough high-skilled workers to succeed in the future .

This year’s UK-wide survey, which included 90 firms which employ people in the North East - found that 73% of firms in the region need more highly skilled staff, particularly in key sectors such as science and engineering, construction and manufacturing.

But 60% are not confident that they will be able to find the high-level skills needed to meet demand and grow. Businesses are already reporting real problems in recruiting people with science, technology, engineering and maths (STEM) skills – with 23% currently struggling to employ graduates with sufficient STEM skills.

Sarah Glendinning, CBI Interim Regional Director North East, said: “While the North East economy continues to make headway we must be on our guard as local growth risks being undermined by a shortage of the higher-level skills businesses need to get on, and the situation is only set to get worse.

“High-growth, high-value sectors, with the most potential are under the most pressure, like science, engineering, digital and manufacturing. We must make sure that our education and skills system is truly responsive to the needs of business and that young people receive much better careers advice, if we are to propel the North East economy forward in the years ahead.”

More, and better quality apprenticeships are part of the answer - and employers are stepping up to the skills challenge. 63% of firms responding to the survey intend to expand their apprenticeship programme or start one in the next three years - the best result since the survey began in 2008.

Across England 78% of businesses are not satisfied with the current performance of careers advice in schools and colleges.

Business also wants to see universities doing more to improve the business relevance of undergraduate courses (56%) and help students become job-ready (44%) if the challenge is to be met.

Rod Bristow, President of Pearson’s UK business, said: “Building a world-class school and qualifications system is the best long-term solution for securing sustainable, skilled workers and economic growth.

“We must prepare young people for the world of work through closer engagement and collaboration between the business community, universities, schools and further education colleges.”

Sarah Glendenning, CBI Assistant Regional Director North East, added: “Apprenticeships are part of the answer and plenty of firms are getting involved. But the risk with the government’s new apprenticeship levy is that it focuses on quantity not improving quality or delivering the skills that the economy requires.

“As the levy applies to all large employers in the North East, it is essential that businesses across the region are consulted on the proposed rate before it goes ahead.”

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