THAMES VALLEY BERKSHIRE 2018 SKILLS PRIORITY STATEMENT EVIDENCE BASE

Transcription

1 THAMES VALLEY BERKSHIRE 2018 SKILLS PRIORITY STATEMENT EVIDENCE BASE March

2 Contents 1 Executive Summary Background and purpose Key findings and recommendations Key messages for stakeholders Policy context Labour Market Context The Berkshire Economy Berkshire s workforce Who does what? Migrant workers Berkshire s residents Demand for skills Overview Employer demand for skills Skill needs of the self-employed Skills needs of managers Valuable skills for individuals Future demand for skills Priority job families Berkshire s education and skills landscape Skills pipeline Employer talent pipeline strategies Community learning provision Developing responses to address mismatch between demand for and supply of skills Overview Government funding to improve skills Closing the tech skills gap Use of local learning provision Gaps in local learning provision Institute of Technology Key Findings and Recommendations Annex 1. T-level Routes Annex 2 Qualification Levels Annex 3: Priority job families Standard Occupational Classification code definitions Annex 4: Methodology

3 1 Executive Summary 1.1 Background and purpose The talent challenge The world of work is changing. As we enter the Fourth Industrial Revolution, developments in fields such as robotics, artificial intelligence, nanotechnology, the Internet of Things, and autonomous vehicles, look set to change the way we live and work. Across all sectors of the economy, different skills will be needed. Some roles will disappear and many more will evolve. Change will be significant in some sectors and around the edges of many others. Some organisations will need fewer people, others will need more. Some change will occur at pace, whilst some will take time. What is clear is that we know enough about the direction of travel to start preparing the workforce of tomorrow (both new entrants and those already in the labour market) to take advantage of the opportunities the new world will present. What is also clear is that the human skills at the core of many jobs will remain, and in some cases will become increasingly important. Berkshire has one of the most successful labour markets in the UK. With a knowledge-based economy, high employment levels, low unemployment, a highly qualified workforce and a wide range of opportunities for new entrants and those looking to move up the career ladder, the area has much to offer employers and individuals alike. Boasting 22 Ofsted-rated outstanding secondary schools, higher than average exam performance, five Further Education and Specialist Colleges, a number of high performing Independent Training Providers (ITPs) and an anchor higher education institution in the University of Reading, the pipeline of next generation talent is strong. However, below the surface, we face significant challenges in meeting the economy s need for skills and labour, both now, and in the future. Skills shortages are acute, particularly in Science, Technology, Engineering, Arts and Maths (STEAM) roles; there is more that can be done to close the gap between the worlds of education and employment; and there is a growing recognition of the need for individuals to be in good work. As we develop Berkshire s Local Industrial Strategy to 2030, we need to futureproof the supply of skills to mitigate the risks to the economy associated with an ageing population, and to capitalise on the opportunities presented by technological change and Brexit Purpose of this report Our 2018 Skills Priority Statement identifies key areas in which we believe investment should be prioritised in order to grow the economy, raise productivity and improve the wellbeing of residents. It draws on a wide range of published and new evidence and is set in the context of a rapidly evolving national skills system. 3

4 With Apprenticeship reforms taking effect, T-levels in development and a new national re-training scheme on the horizon, it is critical that we maximise the opportunities provided by national policy changes for the benefit of the local economy. We envisage that the 2018 Skills Priority Statement will inform the strategic and operational decisions of a wide range of stakeholders, to help us secure long-term local economic success and wellbeing for all. As with previous iterations, Thames Valley Berkshire Local Enterprise Partnership (LEP) will use the 2018 Skills Priority Statement to: direct discretionary funding for employment and skills projects; influence the curriculum of local education and training providers and inform those providing career guidance of the opportunities in the local labour market Contributions The 2018 Skills Priority Statement has been informed by the views of around 1,300 Berkshire employers, via the LEP s 2017 Berkshire Skills Survey, Berkshire STEAM Strategy consultation and the 2015 UK Employer Skills Survey 1. Thank you to the following organisations and individuals for promoting and sharing the Berkshire Skills Survey and for providing additional input: Adviza, Austin Fraser, Berkshire Business Growth Hub, Boyes Turner, Bracknell and Wokingham College, Bracknell Forest Council, Brighter Berkshire, ConnectTVT, East Berkshire College, ECIDB, Federation for Small Businesses, Field Seymore Parks, Finance South East, Get Reading, Green Park Business Park, ICAEW, John Morton (IoD), Maidenhead Chamber of Commerce, Phillip Lee MP, Reading CIC, Royal Borough of Windsor and Maidenhead Council, Skills for Care, Slough Aspire, Slough Borough Council, Thames Tap, Thames Valley Chamber of Commerce, The Tech Partnership, West Berkshire Training Consortium, Winnersh Triangle Business Park and Wokingham Borough Council. 1 UK Commission for Employment and Skills,

5 The Big Picture: Workforce and Skills Trends in Berkshire Trends The strong performance of the Berkshire economy is reflected in the latest workforce and skills statistics. Berkshire firms are employing more and more people, and selfemployment is rising. Unemployment is down and productivity continues to rise. In recent years, the tight labour market has put skills at a premium. With most people who want a job, in a job, attracting and retaining talent has become increasingly difficult for many employers. The most recent data, however, indicates a potential cooling of the job market. The number of job vacancies being advertised in Berkshire since the EU referendum has dropped (in contrast to the national picture), possibly reflecting uncertainty facing international firms (who are highly concentrated locally) and their supply chains. Unless otherwise stated, data is sourced from the Office for National Statistics, primarily from the Annual Population Survey October 2016 September GVA per hour worked (Productivity) % Employment rate (residents) /17 3.3% Unemployment rate (residents) / % Economic inactivity rate (residents) /17 515,000 Employees working in Berkshire 2016 (Business Register and Employment Survey, ONS) 69,700 Self-employed Berkshire residents /17 22% Firms reporting skills deficiencies - (UK Employer Skills Survey 2015) 10,550 Job postings - October 2017 (Labour Insight, Burning Glass Technologies) 6,900 Hard to fill job vacancies (UK Employer Skills Survey 2015) 70% Employers providing training (UK Employer Skills Survey 2015) Up 2.3% from 2014 Down 0.2% points from 2015/16 Down 0.4% points from 2015/16 Up 0.5% points from 2015/16 Up 4% from 2015 Up 11% from 2015/16 Up 4% points from 2013 Down 9% from October 2016 Up 94% from 2013 Down 2% points from

6 The Big Picture: Berkshire s comparative performance with UK or English average (Berkshire) v (England) GVA per hour worked (Productivity) 78.9% v 74.4% Employment rate (residents) /17 Comparative performance Berkshire outperforms the rest of the UK on most workforce and skills measures, particularly productivity and qualification levels. Skills deficiencies are more prevalent however, as they tend to be in tight, high performing labour markets. And Berkshire employees are amongst those least likely to be provided with training by their employer in the country. Both have the potential to be barriers to economic growth. In addition, Berkshire is more reliant on overseas workers than the national average, which could potentially make the area more vulnerable as the UK makes its exit from the EU. 3.3% v 4.6% Unemployment rate (residents) / % v 22.0% Economic inactivity rate (residents) / % v 63.1% Working age population /17 19% v 14% Overseas workforce Census 48.0% v 38.2% Qualified to degree level or higher /17 22% v 18% Firms reporting skills deficiencies - (UK Employer Skills Survey 2015) 6.3% v 5.1% Workforce not fully proficient - (UK Employer Skills Survey 2015) 56% v 63% Employees receiving training (UK Employer Skills Survey 2015) 6

7 1.2 Key findings and recommendations What the evidence tells us Recommendations for further focus Key partners Berkshire has a large STEAM workforce and acute skills shortages, particularly in the fields of digital tech and engineering There is a disconnect between employers, education providers and young people There is a need to retain and attract the brightest and best talent Apprenticeship take up is low and some young people struggle to find employment in their chosen field Ongoing skills shortages in low profile sectors could be exacerbated by Brexit Implement Berkshire s STEAM Strategy to continue to improve the supply of STEAM skills into the local economy and encourage more firms to diversify recruitment to address skills gaps Support Institutes of Technology that help address local STEAM skills shortages and develop skills needed for the future Promoting local and national initiatives designed to improve the supply of people with tech skills, including the new national Institute of Coding and the Digital Skills Partnership Continue to promote employer / education collaboration at all levels Encourage more firms to offer work experience / work inspiration Investigate the potential of developing a Berkshire-wide work experience / work inspiration scheme Strengthen links between the University of Reading and the local economy, particularly in relation to tech, managerial and entrepreneurial skills Promote activities that align with the recommendations of the Department for Education s 2017 Careers Strategy Promote the wealth of opportunities available in the Berkshire economy to young people within schools Seek solutions to ensure the availability of affordable housing for key workers (in both the public and private sector) Help young people make informed decisions, particularly in relation to Apprenticeships (including degree Apprenticeships) and the likelihood of finding employment in their chosen field Promote opportunities in sectors / occupations such as hospitality, logistics and social care to young people and career changers Promote the Prince s Trust development grant scheme for year-olds and explore the potential of developing a similar industry-funded scheme for those Thames Valley Berkshire LEP Education providers at all levels Career guidance professionals Business organisations Employers Department for Education Thames Valley Berkshire LEP Employers Education providers at all levels Career guidance professionals Business organisations Careers and Enterprise Company Elevate Berkshire Career guidance professionals Employers Thames Valley Berkshire LEP Local authorities Housing Associations Careers guidance professionals Thames Valley Berkshire LEP National Apprenticeship Service Careers and Enterprise Company Education providers at all levels Career guidance professionals Sector bodies 7

8 There is a potential undersupply of publicly funded training for engineers, electricians and IT technicians in Berkshire Major changes are underway to the skills system Entrepreneurialism and managerial skills are critical to the local economy Whilst unemployment is low, in-work poverty and insecure work is affecting some Berkshire residents There remains a group of young people who struggle to find or stay in education, employment or training over the age of 30; to assist unemployed and part-time workers with support for one-off initial financial outlays required to enter a career in sectors experiencing skills shortages Understand the potential of T-levels to raise supply and ensure appropriate T- level provision across and on the edges of Berkshire Understand how the Adult Education Budget could be most effectively used locally Scope what is required locally from the National Retraining Scheme (including financial barriers to retraining) Understand the potential benefits of devolving the Apprenticeship Levy to local areas Ensure that appropriate T-level provision is developed to benefit the local economy Monitor progress towards improving the availability and accessibility of learning provision for high needs learners Support and promote projects and schemes that develop entrepreneurial skills Promote the use of the Apprenticeship Levy to develop managerial skills Advocate good jobs and highlight best practice Explore the potential benefit of a living wage or extension of London wage weightings for skills shortage occupations Seek to provide a system that offers intensive long-term support Thames Valley Berkshire LEP Further Education providers Thames Valley Berkshire LEP Local authorities Learning providers Department for Education/Education and Skills Funding Agency National Apprenticeship Service Thames Valley Berkshire LEP Employers Business organisations National Apprenticeship Service Thames Valley Berkshire LEP Business organisations Local authorities Voluntary and Community Sector Job Centre Plus Elevate Berkshire 8

9 1.3 Key messages for stakeholders Secondary school head teachers and careers leads Engage with local and national initiatives designed to improve the supply of people with STEAM skills Encourage more firms to offer work experience / work inspiration Promote the wealth of opportunities available in the Berkshire economy to young people Help young people make informed decisions, particularly in relation to Apprenticeships (including degree Apprenticeships) Promote opportunities in low profile sectors / occupations such as hospitality, logistics and social care to young people and career changers Further Education and Higher Education leaders Continue to improve the supply of STEAM skills into the local economy Promote local and national initiatives designed to improve the supply of people with tech skills Provide first-class customer service to employers who wish to engage (whether in terms of work inspiration or course development) Develop T-level provision across and on the outskirts of Berkshire that meets the needs of the local economy (see box 1) Embed tech, entrepreneurial and managerial skills development within higher level provision Provide high quality employability training provision Business organisations and employers Promote good practice in terms of work inspiration, training and development and good workplace practices Support and promote projects and schemes that develop entrepreneurial skills Promote using the Apprenticeship levy to take on additional young people and to develop workforce skills (particularly managerial skills) Engage with education providers at all levels Provide more work inspiration and work experience placements Diversify recruitment to address skills gaps Thames Valley Berkshire LEP and Local Authorities Use the Skills Priority Statement to inform the people section of Berkshire s Local Industrial Strategy Implement Berkshire s STEAM Strategy Support Institutes of Technology that help address local STEAM skills shortages and develops skills needed for the future Seek solutions to ensure the availability of affordable housing for key workers Understand how the Adult Education Budget could be most effectively used locally Promote Tech Nation s Digital Business Academy and the Institute of Coding Scope what is required locally from the National Retraining Scheme 9

10 Promote the Prince s Trust development grant scheme for year-olds and explore the potential of developing a similar industry-funded scheme for those over the age of 30 to assist unemployed and part-time workers with support for one-off initial financial outlays required to enter careers in sectors experiencing skills shortages Understand the potential benefits of devolving the Apprenticeship Levy to local areas Explore the potential benefit of a living wage or extension of London wage weightings for skills shortage occupations Monitor progress towards improving the availability and accessibility of learning provision for high needs learners Seek to provide a service that offers intensive long-term support to young people who are Not in Employment, Education or Training (NEET) Box 1: Ensuring T-level provision meets the needs of the local economy T-level provision at Berkshire s Further Education colleges should meet the needs of the local economy. Consideration should therefore be given to providing T-levels that deliver the skills and knowledge required for the following technical-level jobs that are in high demand locally: Administration roles Customer service roles IT support Chefs Web developers Bookkeepers / accounting clerks Sales assistants Retail managers / supervisors Retail associates Construction labourers Electricians and electrical fitters Telephone salespersons Telecommunications engineers IT engineers Field service engineers Logistics and distribution roles In addition, the potential for providing T-level provision that delivers the skills and knowledge required of the following technical level jobs that, whilst fewer in number, employers report having difficulties sourcing, should be explored: Vehicle and parts salespersons Quantity surveyors Air conditioning and refrigeration engineers 10

11 2 Policy context Key recent national skills and employment policy developments (including initiatives cited in the Industrial Strategy White Paper) are set out in the table below. What Summary Detail Link Post-16 Skills Plan T-levels Local Area Reviews Devolution of adult skills funding Apprenticeship reforms The government s plan to support young people and adults to secure skilled employment and meet the needs of the economy. Introduction of a common framework of 15 routes into technical employment across all technical education at levels 2 to 5, encompassing both college-based and employment-based learning. Area reviews were reviews of the post-16 education and training sector which ran from 2015 to The government is seeking to transfer control of the Adult Education Budget (AEB) to local government areas through devolution agreements. Reforms designed to make apprenticeships more rigorous and Puts employers at the heart of the technical skills system through the introduction of a streamlined system (T-levels), a year of tailored support for those not ready to access a route at 16, support for young people who are NEET / Universal Credit claimants and a duty on the further education sector to use their best endeavours to meet the needs of young people with Special Educational Needs and Disability (SEND). It will be for local areas to decide which of the 15 routes (see Annex 1) they should focus on in order to meet the demands of the local economy. Decisions will be informed by the need to ensure individuals can access lower levels of education and training within reasonable travel-to-learn distances, while ensuring that at higher levels, where more specialist staff and equipment are needed, there is enough specialisation to ensure that they are able to deliver high-quality teaching and good results. The Thames Valley Area review recommended some local college mergers. These are still live. The review also recommended that Berkshire local authorities work collaboratively on the development and investment in more and accessible provision for high needs learners. Transferring the AEB will enable local areas to reshape their local adult education provision. This should align with other local arrangements and tackle the economic priorities and productivity challenges a high-performing skills system should meet. The first wave of AEB devolution deals has been delayed All new apprenticeships will be based on standards designed by employers 11

12 What Summary Detail Link responsive to employers requirements The apprenticeship levy came into force in May 2017, whereby large employers with a payroll of over 3 million were required to contribute 0.5% of their pay bill to a levy pot to be used for apprenticeship training. Apprenticeships are required to be at least one year in duration and apprentices are required to spend 20% of their time undertaking off-the-job training Apprenticeships can be at any level, up to degree and PhD level Universal Credit Universal Credit is a new benefit for working-age people, replacing six benefits (income support, incomebased jobseeker s allowance, income-related employment and support allowance, housing benefit, child tax credit and working tax credit). It is designed to ensure that no-one is better off claiming benefits than working. Universal Credit was rolled out in Berkshire in 2017/18 in the following phases. o December Reading JobCentre Plus (JCP) and Newbury JCP o February Bracknell JCP, Maidenhead JCP and Slough JCP The Youth Obligation is support for year-olds who make a claim to Universal Credit National Careers Strategy Part of the government s plan to improve social mobility and offer opportunity for everyone. Published by the Department for Education at the end of 2017, the Careers Strategy sets out actions in relation to use of the Gatsby Benchmarks in schools and colleges, the Careers and Enterprise Company engaging employers with schools, developing Careers Leaders within schools and colleges, evolving the National Careers Service and promoting Science, Technology, Engineering and Maths (STEM) careers Work experience Government has committed to improving access to work experience for students at school, college and university. In addition to work experience undertaken whilst young people are at school, all year-old student undertaking T-levels will be entitled to a quality work placement following completion of a two year college-based technical education programme. All young people with Education, Health and Care (EHC) plans should undertake a supported internship, which includes an extended work placement, unless there is a good reason not to do so. and 12

13 What Summary Detail Link Visas for tech staff Tech Nation Institute of Technology Government plans to increase the number of visas available for recruiting tech staff from overseas. Tech Nation has been given new funding to support 11 tech clusters across the UK. Plans to introduce Institutes of Technology (IoTs) to provide technical education in STEM subjects at levels 3, 4 and 5 (description of levels in Annex 2). Institute of Coding A consortium of more than 60 universities, businesses and industry experts tasked with tackling the UK s digital skills gap. National Retraining Scheme Skills Advisory Panels European Social Fund (ESF) Government plans to introduce a national retraining scheme to test innovative approaches to helping adults up-skill and re-skill. Identifying skills needs and employer demands at a local level. When the UK exits the EU, organisations will no longer be able Government is increasing to 2,000 the annual allowance of exceptional talent specialist technology visas for high-skilled workers entering the UK from outside of the EU. The M4 corridor / Reading has been identified as one of the tech clusters in which Tech Nation will focus funding. This will include expanding their Digital Business Academy which will support people to learn the skills to start or grow a digital business, and expanding other skills training programmes. IoTs will have a particular focus on teaching technical disciplines where industry demand is growing, driven by the pace of technological change and the loss of skills as older workers retire. IoTs will have employers at the heart of their leadership and governance, and in the design and delivery of curriculum. IoTs will strengthen and grow provision to fill gaps in the market. Government requires collaborative approaches between employers and the Further Education (FE) and Higher Education (HE) sectors, where the assets and resources of each are combined to maximise their relative strengths. The first IoTs are expected to open in The consortium includes a number of major tech employers based in Berkshire, including Microsoft and Cisco, along with Berkshire tech training provider QA Limited. Initially will target improving digital and construction skills through the use of emerging technology and the expansion of an innovative construction training programme. Thames Valley Berkshire LEP is one of seven LEP and Combined Authority areas selected to pilot Skills Advisory Panels. It is envisaged that this will build on analytical, engagement and policy work already undertaken by the LEP. The European Social Fund (ESF) is due to invest 2.4 billion in supporting two million people in England up to

14 What Summary Detail Link to access the European Social Fund to deliver skills projects. Local ESF projects support adults to improve their life skills and disabled people to find work. It is likely that funding for such projects in the future will be made available by the UK government via a Shared Prosperity Fund, but details are currently unknown. 14

15 3 Labour Market Context 3.1 The Berkshire Economy Berkshire s economy is extremely strong. It is the most successful economy outside of London (in terms of economic output and productivity) and is one of the top three areas of the country for inclusive and good growth 2. There are however pockets of deprivation (particularly in Slough and Reading), with two areas of Reading being amongst the 10% most deprived areas of the country 3. And there are high levels of inequality (be that in terms of income, health or wellbeing) within all six of Berkshire s local authority areas 4. Two factors make the local economy distinctive: the concentration of tech-based activity and the presence of international corporates. Both are related to the close proximity to London and Heathrow airport, and both are key drivers of Berkshire s high productivity levels. Berkshire has a larger private sector than most other areas of the UK, and conversely a relatively small public sector. It has the highest proportion of Foreign-Owned Companies (FOCs) in the UK, many of whom have located their UK or EMEA headquarters in the sub-region. Approximately a quarter of Berkshire s private sector workforce are employed by FOCs, and many more work in their supply chains. As is the case nationally, the majority of businesses 5 in Berkshire are micro in size (employing fewer than 10 people) and a large swathe of registered and unregistered businesses are sole traders / selfemployed individuals. Overall, Berkshire has a slightly higher proportion of medium and large businesses (employing more than 50 people) than the national average, but also a slightly higher proportion of micro firms (employing fewer than 10 people). The terms of sectors, the digital tech sector (defined by government as the information and communication sector) dominates the economy (figures 1, 2 and 3). It is responsible for nearly a quarter of Berkshire s economic output, compared to only seven percent nationally. The sector accounts for 13% of employment in the local economy (just ahead of the professional, scientific and technical sector which accounts for 12%) and 17% of businesses. Slightly hidden within the national industrial classification scheme is the life sciences sector. Particularly concentrated in Maidenhead, Slough and Reading, this is a growth sector within Berkshire. Other key sectors locally include energy and environment, professional services and logistics. Information about local key employers in these sectors can be found within Thames Valley Berkshire s Sector Proposition documents ( within a life science map produced by the Oxfordshire Academic Health Science Network ( and within the job family factsheets at the end of this report. 2 Inclusive Growth Monitor 2017: Local Enterprise Partnerships, Inclusive Growth Analysis Unit University of Manchester, for the Joseph Rowntree Foundation and Good Growth for Cities 2017, PwC and Demos 3 Index of Multiple Deprivation Thriving Places Index 2017, Happy City UK 5 Includes public sector and not for profit establishments 15

16 Figure 1: Businesses by sector Figure 2: Employment by sector Agriculture, forestry & fishing 1% Mining, quarrying & utilities 1% Manufacturing 4% 12% Construction 10% Motor trades 2% Wholesale 4% Retail 5% Transport & storage 4% Accommodation & food 3% 9% Information & communication 17% Financial & insurance 2% Property 3% 18% Professional, scientific & 23% Business administration & 9% Public administration & 0% Education 2% Health 4% Arts, entertainment, 6% 0% 5% 10% 15% 20% 25% Agriculture, forestry & fishing 0% Mining, quarrying & utilities 2% Manufacturing 5% 8% Construction 4% Motor trades 2% Wholesale 4% 7% Retail 8% 9% Transport & storage (inc 5% Accommodation & food 6% 4% Information & communication 13% Financial & insurance 2% Property 2% 9% Professional, scientific & 12% Business administration & 10% Public administration & 2% Education 8% Health 8% 13% Arts, entertainment, 5% 0% 5% 10% 15% England TVB England TVB Figure 3: Gross Value Added (GVA) by sector Agriculture 0% Energy Manufacturing Construction Distribution, transport, hotels and restuarants Information and communication Financial and insurance 4% 10% 7% 4% 7% 3% 19% 24% Real estate Professional and support services Government, health & education 10% 12% 11% 18% Other services 4% 0% 5% 10% 15% 20% 25% 30% Sources: UK Business Count 2016, Business Register and Employment Survey 2016 and Balanced GVA 2016, all ONS England 16 TVB

17 3.2 Berkshire s workforce There are around 515,000 employee jobs 6 in Berkshire and 69,700 self-employed residents. In total, 14% of Berkshire residents are self-employed, just below the national average. Across Berkshire, selfemployment is highest amongst residents of West Berkshire, and Windsor and Maidenhead. Geographically, just over a quarter of all employee jobs in Berkshire are in Reading (138,000) followed by Slough (78,000) and Bracknell (49,000). Employees are less likely to work on a part-time basis in Berkshire than the national average (28% versus 32% 7 ). Part-time employment is particularly low in Bracknell and Slough. The bulk of Berkshire s workforce (61%) are aged between 25 and 49, a third are over the age of 50 and around 10% under the age of Berkshire s workforce has a slightly older age profile than the national average, with 37% being aged 35-49, three percentage points higher than the national average. A smaller proportion are aged than the national average, indicating that Berkshire is a net exporter of people of university age. 19% of those working in Berkshire were born overseas, compared to 14% nationally. This is mainly driven by the large Asian population in Slough (40% of the population classify themselves as Asian / Asian British), and is also likely to be related to the high number of foreign-owned companies located in the sub-region. 6 Source: Business Register and Employment Survey Jobs will be filled by Berkshire residents, people commuting into Berkshire plus non-berkshire residents working remotely. Jobs do not equate to people as people could have more than one job. 7 Source: Annual Population Survey, October 2016 September Source: Annual Population Survey - Workplace Analysis, October 2016 September

18 3.3 Who does what? Occupational profile Berkshire s workforce is more top heavy than nationally (figure 4). 50% of the local workforce work in managerial, professional or associate professional occupations compared with 42% of the national workforce. A high proportion of those working in Berkshire are qualified to degree level or above (48% compared with the national average of 38%) 9, the fourth highest of all 38 LEP areas (topped only by London, Oxfordshire and Buckinghamshire). Figure 4: Employment by occupation Managers, Directors and Senior Officials Professional Occupations Associate Professional and Technical Occupations Administrative and Secretarial Occupations Skilled Trades Occupations Caring, Leisure and Other Service Occupations Sales and Customer Service Occupations Process, Plant and Machine Operatives Elementary Occupations 10% 11% 13% 16% 12% 12% 8% 7% 9% 7% 9% 9% 4% 6% 12% 13% 19% 23% 0% 5% 10% 15% 20% 25% England TVB Source: EMSI Analyst, 2016 (workplace-based data) Science, Technology, Engineering, Arts and Maths jobs The nature of the Berkshire economy means there is high demand for STEAM skills. In total, 118,800 people work in STEAM roles in Berkshire, nearly twice the national average. Over half of whom work in digital tech roles. In fact, nearly one in nine jobs in Berkshire are digital tech jobs, 2.5 times the national average. A detailed breakdown is provided in figure 5. For the purposes of this exercise, jobs have been placed into one category only

19 Figure 5: Breakdown of Berkshire s STEAM employment Self-employment and temporary employment Self-employment and temporary employment is more prevalent in some occupations than others. In Berkshire, self-employment is highest amongst process, plant and machine operatives (33% of all in employment) (likely to mainly be driving occupations) and skilled trades (32%). Fewer managers and senior directors are self-employed in Berkshire (17%) than the national average (24%). Temporary employment in Berkshire is highest in elementary occupations (13% of all employment) (potentially driven by seasonal jobs at the likes of Legoland) and administrative roles (9%) 10. Many of Berkshire s large corporates employ contractors, often in professional roles (such as IT) and in some cases these will be people who were previously employees at the firm. Some will be classified as temporary workers and others as being self-employed. 10 Source: Annual Population Survey Workplace Data, 2016/17 19

20 3.4 Migrant workers With Brexit negotiations on-going, the number of EU citizens leaving the UK is at its highest level for a decade 11. Although more EU nationals still moved to the UK than left in the year to September The medium and long-term implications of Brexit on future migration from the EU, and from elsewhere, remain unclear. At the time of the 2011 Census, there were around 27,300 people working in Berkshire who were born in the EU (excluding the UK), of whom around 16,000 were born in the EU8 and EU2 Accession countries 12. Overall, a higher proportion of the Berkshire workforce were born in the EU (in both Accession and Non-Accession State countries) than the national average, although, a greater number were born in the Middle East or Asia (figure 6). Figure 6: Country of birth of those born overseas in employment in Berkshire Source: Census 2011 Figure 7: National Insurance Registrations by nationality 2016/2017 Source: DWP, % 8% 7% 6% 5% 4% 3% 2% 1% 0% 4,708, 30% 11,113, 70% European Union Non EU TVB England National Insurance Registrations and Census data on short-term overseas workers provide more information about recent migrant workers. The data shows that 70% of National Insurance Registrations in Berkshire in 2016/17 were for EU migrants and 30% for other overseas migrants. A higher proportion of the short-term overseas workforce work in professional and caring roles in Berkshire than is the case nationally, and fewer work in elementary roles. Indicating that employers EU8 = Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, Slovenia, EU2 = Bulgaria and Romania 20

21 in Berkshire are more reliant on short-term immigration to fill high-value roles than elsewhere in the UK 13. The possible impact of Brexit on jobs and skills in Berkshire is discussed further in chapter Berkshire s residents Commuting The information presented so far has focused on those currently working in Berkshire. Berkshire has one of the least self-contained labour markets of all Local Enterprise Partnership (LEP) areas (with only 68% of those working in Berkshire also living in the area). Overall, 10,600 more people travel into Berkshire to work than travel out. Unsurprisingly, London is the main destination for those travelling out. The main areas from which people commute into Berkshire to work are: Hampshire; London; Buckinghamshire; Surrey and Oxfordshire. Generally speaking, those who commute in, work in higher level roles (managerial, professional and associate professional). Figure 8. Commuting into and out of Thames Valley Berkshire Source: 2011 Census At local authority level, Reading and Slough have the largest net gains in terms of workers, with Wokingham having the largest net loss (12,000 more people commuting out than in). In terms of commuting into London, we see (figure 9) that Slough has the largest proportion of residents commuting to London (with 40% of those commuting to London travelling to Hillingdon, most likely to the Heathrow Airport area), followed by Windsor and Maidenhead. Across all areas, year-olds who are commuting out of their local authority area are most likely to be commuting to London, with the figure ranging from 44% in Slough to 10% in Wokingham year olds who are commuting out of their local authority are least likely to be commuting to London. 13 Source: 2011 Census 21

22 Figure 9: Proportion of out-commuters by age who are commuting into London 50% 45% 44% 40% 35% 30% 25% 20% 15% 10% 10% 5% 0% Bracknell Forest Reading Slough West Berkshire RBWM Wokingham Source: Census 2011 Aged Aged Aged Aged Aged Berkshire residents by generation Much is written about the different attitudes to work and the workplace of different generations. Millennials (those born between 1982 and 2000), for example, tend to have a preference for working for a flat corporate culture, and place a high emphasis on work-life balance, collaboration and social consciousness. Generation X (those born between 1965 and 1981), according to literature, place greater value on individual advancement, stability and job satisfaction. Whilst baby boomers (born between 1946 and 1964) resonate primarily with loyalty, work ethic, a steady career path and compensation. At local authority level, Slough has the greatest proportion of residents categorised as being in Generation Z (born after 2000). The oldest in this group are just about to enter the labour market. Reading has the greatest proportion of millennials. There is a relatively even spread of Generation X-ers across Berkshire, whilst West Berkshire has the greatest proportion of Baby Boomer residents Residents in and out of work Berkshire residents enjoy high employment and low unemployment rates. However, there are localised pockets across the sub-region (mainly in Slough and Reading) where unemployment rates exceed the national average. 22

23 Figure 10: Economic activity, Thames Valley Berkshire and England Employment rate Unemployment rate Economicially inactive Employment rate Unemployment rate Economically inactive Thames Valley Berkshire Source: Annual Population Survey England Across Berkshire, there are approximately 33,100 residents (6% of the working age population) who are not working but would like to (those who are classified as unemployed because they are actively seeking work, and those who are economically inactive 14 and want a job but haven t actively sought work in recent weeks). Some of whom are likely to be unable to find flexible employment that fits with caring responsibilities (figure 11). 14 Not working and not actively looking for a job (includes students, those who have retired early, the long-term sick and those looking after family or a home) 23

24 Figure 11: Economic activity of Berkshire residents Source: Annual Population Survey Residents not in good work Whilst Berkshire s headline employment and unemployment statistics are very positive, they mask the fact that for some (both those in and out of work) it can be difficult to make ends meet. In-work poverty is on the rise with a record 60% of British people classified as being in poverty, living in household where at least one person is in work 15. Rising housing costs being key contributor. The rise of zero-hour contracts and the gig economy has led to fears that the labour market is creating an increasing number of low paying, poorly protected jobs. The Taylor Review of Modern Work Practices describes factors that determine what is good work 16. They include: wages; job security; permanency of job; working conditions; opportunities for development; work-life balance and participation in organisational decisions. Residents of Berkshire not in good work could include those who are: Not working but would like to (unemployed and economically inactive) In and out of work (often in a low pay / no pay cycle) In low paid work with few progression opportunities

25 Underemployed (employed in jobs below the level for which are skilled / qualified) Working fewer hours than they desire On temporary contracts but would prefer permanent work Working long hours (more than 50 hours week) Self-employed but would rather be an employee It is difficult to estimate the number of Berkshire residents who are not in good work using measures such as contract type and employment status, as what works for one person might not for another. For example, while some people in the gig economy may struggle to make ends meet as they go from job to job, others are satisfied with the hours they work and their degree of autonomy. Happy City UK s Thriving Places Index includes a measure on good jobs 17 which, whilst not providing a number, suggests that of Berkshire s six local authority areas, residents of Slough are least likely to be in good jobs. This tallies with broader data on deprivation. Within Berkshire, Slough scores most highly on the Indices of Multiple Deprivation (ranked the 79th most deprived local authority area in England - out of 326 areas) Research undertaken by Projects with Purpose for the Elevate Berkshire programme highlights the particular challenges facing young people who are not in education, employment or training (NEET), particularly those who are economically inactive (around 62% of the total), as they are often hidden in society. Nationally, 11% of year olds are NEET. Whilst we do not have figures for this age group for Berkshire, we know that 5.2% of year olds in Berkshire are NEET, which is in line with the national average. Time spent NEET can have a detrimental effect on physical and mental health, and increase the likelihood of unemployment, low wages, or low quality of work later on in life. Some of the main causes of young people becoming NEET are: Chaotic childhoods Growing up in care Looking after a family or home Disability Special Educational Needs (SEN) Poor health (physical and mental) Lack of qualifications Substance abuse Responsibilities as a carer One barrier facing some of those who are not working but would like a job is being able to afford oneoff initial financial outlays. For example, paying course fees, licence fees (e.g. the CSCS card in construction of the SIA licence in security), tools or equipment (e.g. hairdressing kit, chef whites), childcare costs, interview clothes or transport costs prior to receiving their first pay cheque. 17 Takes into account those on temporary contracts but seeking permanent contracts, those on low wages, those working long hours and those who would like to work more hours 25

26 4 Demand for skills 4.1 Overview Having set the scene by describing, in broad terms, Berkshire s economy, workforce and residents, now, in order to help identify where skills investment should be prioritised, we move to look at the demand for skills. We are particularly keen to identify: Skills that are most valuable for Berkshire s continued economic success (for example skills that drive industries that create the greatest wealth) Skills that are most valuable in terms of the wellbeing of Berkshire residents as a whole (for example education and health-related skills) Skills that are most valuable for individuals 18 In terms of the former two, we examine employer 19 demand for skills along with the skills required of senior leaders and those who are self-employed. Ultimately, we will identify: Priority job families (for interventions) Jobs that people entering the labour market or seeking to change careers might be most likely to gain employment in Skills that people entering the labour market and changing career might find most valuable in terms of securing employment 18 This will vary by individual, it could be skills that enable individuals to maximise their earning potential, or it could be skills that help individuals hold down steady employment 19 Private sector, public sector and voluntary sector employers 26

27 4.2 Employer demand for skills The local job market Whilst the employment levels are high across Berkshire, real-time job market data suggests a slowing of recruitment activity following the EU referendum vote. Figure 12 illustrates a general downward trend in the number of job postings in Berkshire following the referendum, which is at odds with the national trend (figure 13). This could be due to the higher proportion of Foreign Owned Companies (FOCs) in Berkshire who may be putting staffing plans on hold whilst the impact of the UK leaving the EU is unclear. Figure 12: Number of job postings in Berkshire ( ) Source: Labour Insight, Burning Glass Technologies 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Figure 13: Number of job postings in England ( ) 800, , , , , , , ,000 0 Source: Labour Insight, Burning Glass Technologies Jobs in high demand Online job postings provide a good indication of the current level of demand for different types of skills in Berkshire. Figure 14 shows that jobs in highest demand in Berkshire are IT roles, followed by sales roles. Note, this data gives a sense of the demand for skills from employers. 13% of the workforce are selfemployed. The data does not give an indication of opportunities for self-employment which tend to be concentrated in certain role jobs (e.g. construction, hairdressing, creative arts) In addition, the data underplays demand for jobs that are less likely to be advertised online, for example agriculture, independent retail and hospitality roles. 27

28 Figure 14: Number of job postings by job family, 2017 Information Technology Sales Business Management and Operations Finance Health Care including Nursing Education and Training Hospitality, Food, and Tourism Clerical and Administrative Engineering Planning and Analysis Human Resources Maintenance, Repair, and Installation Marketing and Public Relations Construction, Extraction, and Architecture Customer and Client Support Community and Social Services Law, Compliance, and Public Safety Manufacturing and Production Transportation Design, Media, and Writing Science and Research Personal Services Agriculture, Horticulture, & the Outdoors Performing Arts 0 5,000 10,000 15,000 20,000 25,000 30,000 Source: Labour Insight (BGOCCS), Burning Glass Technologies When we dig down further and examine the data at a more granular occupational level, we see that across Berkshire (as is the case nationally), the greatest number of job postings are for software developers / engineers (figure 15). The second highest number of postings in Berkshire are for account managers / representatives. The proportion of job postings for this occupation in Berkshire exceeds the national average. Other occupations that the data suggests are in much higher demand locally than nationally are: Computer Support Specialists, Recruiters, Systems Analysts and Marketing Managers (see dark blue bars in figure 15). Over the last 12 months, there has been an increase in the relative level of demand for: Software Programmers / Engineers; Registered General Nurses; Computer Support Specialists; Recruiters; Web Developers; Marketing Managers; Accountants; Accounting Clerks; Financial Managers; Retail Managers and Associates (table 1). Demand varies across Berkshire s local authority areas (table 2). The data suggests that demand for IT staff is highest in Bracknell Forest, Reading and West Berkshire. Demand for sales and customer service staff is relatively high across all areas (slightly less so in Windsor and Maidenhead), demand for nurses is highest in Slough and Reading, and demand for teachers / teaching assistants highest in Slough. The skills required of jobs that are in high demand across Berkshire are set out in table 3. 28

29 Figure 15: Job postings by occupation, 2017 (TVB and England) Software Developer / Engineer Account Manager / Representative Project Manager Office / Administrative Assistant Sales Manager Customer Service Representative Registered General Nurse (RGN) Computer Support Specialist Recruiter Systems Analyst Chef Web Developer Sales Representative Marketing Manager Accountant Data / Data Mining Analyst Bookkeeper / Accounting Clerk Sales Assistant Financial Manager Retail Store Manager / Supervisor Retail Sales Associate England TVB Source: Labour Insight, Burning Glass Technologies Table 1: Job postings trends Occupation Change Software Developer / Engineer 5.0% 5.2% 0.2% Account Manager / Representative 3.5% 3.3% -0.2% Project Manager 2.6% 2.6% 0.0% Office / Administrative Assistant 2.7% 2.5% -0.2% Sales Manager 2.5% 2.2% -0.3% Customer Service Representative 2.1% 2.1% 0.0% Registered General Nurse (RGN) 2.0% 2.1% 0.0% Computer Support Specialist 1.9% 2.0% 0.1% Recruiter 1.5% 1.7% 0.2% Systems Analyst 1.7% 1.6% -0.1% Chef 1.7% 1.6% -0.2% Web Developer 1.4% 1.5% 0.1% Sales Representative 1.9% 1.5% -0.4% Marketing Manager 1.3% 1.4% 0.2% Accountant 1.2% 1.4% 0.2% Data / Data Mining Analyst 1.3% 1.3% 0.0% Bookkeeper / Accounting Clerk 1.0% 1.2% 0.2% Sales Assistant 1.2% 1.1% -0.1% Financial Manager 0.8% 1.1% 0.3% Retail Store Manager / Supervisor 0.9% 1.0% 0.1% Retail Sales Associate 0.9% 1.0% 0.1% Source: Labour Insight, Burning Glass Technologies 29

30 Table 2: Jobs postings by local authority area, 2017 READING SLOUGH WINDSOR AND MAIDENHEAD Occupation Job Postings Occupation Job Postings Occupation Job Postings Software Developer / Engineer 4.4% Sales Representative 3.6% Chef 3.1% Sales Representative 4.1% Secondary School Teacher 3.5% Software Developer / Engineer 2.9% Computer Support Specialist 3.3% Software Developer / Engineer 2.7% Office / Administrative Assistant 2.6% Recruiter 2.9% Computer Support Specialist 2.2% Sales Representative 2.5% Web Developer 2.5% Customer Service Representative 2.1% Computer Support Specialist 2.5% Project Manager 2.0% Teaching Assistant 2.0% Secondary School Teacher 2.4% Account Manager / Representative 1.9% Office / Administrative Assistant 1.9% Customer Service Representative 2.2% Office / Administrative Assistant 1.9% Registered General Nurse (RGN) 1.9% Web Developer 2.2% Registered General Nurse (RGN) 1.7% Web Developer 1.9% Marketing Manager 2.0% Network Engineer / Architect 1.6% Bookkeeper / Accounting Clerk 1.8% Retail Store Manager / Supervisor 2.0% WEST BERKSHIRE BRACKNELL FOREST WOKINGHAM Occupation Job Postings Occupation Job Postings Occupation Job Postings Software Developer / Engineer 5.2% Software Developer / Engineer 5.1% Software Developer / Engineer 4.0% Sales Representative 4.0% Computer Support Specialist 4.3% Customer Service Representative 3.2% Web Developer 3.7% Sales Representative 3.7% Computer Support Specialist 2.8% Computer Support Specialist 2.9% Office / Administrative Assistant 2.9% Sales Representative 2.8% Customer Service Representative 2.4% Customer Service Representative 2.5% Web Developer 2.8% Retail Store Manager / Supervisor 2.3% Web Developer 2.5% Family / School / General Social Worker 2.5% Office / Administrative Assistant 2.1% Network Engineer / Architect 2.4% Office / Administrative Assistant 2.3% Chef 2.1% Project Manager 2.2% Secondary School Teacher 2.2% Accountant 2.1% Retail Store Manager / Supervisor 2.1% Accountant 2.1% Labourer / Material Handler 1.9% Account Manager / Representative 1.9% Network Engineer / Architect 1.9% Source: Labour Insight, Burning Glass Technologies (% of all online job posting for specific job role) 30

31 Table 3: Jobs in high demand and the skills they require Software developer / engineer Account manager / representative Job family Baseline skills (mentioned in over 10% of job ads in Berkshire) Specialist Skills (mentioned in over 20% of job ads in Berkshire) Digital tech Communication, problem solving Java, software development, SQL, Javascript, Microsoft C#, LINUX,.NET, software engineering Business and finance Communication, building effective relationships, organisational skills, Microsoft Excel, detail-oriented, presentation skills Sales, business development, account management, customer service Project manager Business and finance Communication, leadership, planning Project management, budgeting Degree Office / admin assistant Administrative Communication, organisation, Microsoft Excel, planning, computer literacy, English, Microsoft Word Sales manager Sales and customer service Communication, building effective relationships Customer Service Representative Registered General Nurse Computer specialist support Sales and customer service Health and social care Digital tech Communication, organisation, detail oriented, Microsoft Excel, Microsoft Office Communication, English, organisation, planning, leadership Communication, troubleshooting, problem solving, Microsoft Windows, Microsoft Office Recruiter Business and finance Communication, organisation, building effective relationships, writing Systems analyst Digital tech Communication, planning, Microsoft Excel, problem solving Administrative support, customer service Sales, business development, sales management Customer service, customer contact Working with mental health patients, midwifery, care planning Technical support, IT support, customer service, Microsoft Active Directory Sales, business development, social media, telesales Teamwork / collaboration Employers tend to recruit those with Degree (although not essential) Degree Level 2 or higher qualifications (e.g. 5 GCSEs) Degree (although not essential) Level 2 or higher qualifications (e.g. 5 GCSEs) Degree Level 2 or higher qualifications (e.g. 5 GCSEs) Degree (although not essential) Degree 31

32 Job family Baseline skills (mentioned in over 10% of job ads in Berkshire) Chef Hospitality Communication, organisation, creativity, English, detail-oriented Specialist Skills (mentioned in over 20% of job ads in Berkshire) Cooking, teamwork / collaboration, food preparation, food safety Web developer Digital tech Communication, problem solving, creativity Javascript, jquery,.net, SQL, front-end development, Microsoft C#, HTML5, PHP, ASP, Angular JS, ASP.NET Sales representative Sales and customer service Communication, building effective relationships, presentation skills Marketing manager Business and finance Communication, creativity, planning, writing, organisational skills Accountant Business and finance Microsoft Excel, communication, detailorientated, meeting deadlines Data / data mining analyst Bookkeeper / accounting clerk Engineering, maths and science Business and finance Microsoft Excel, communication, planning, detail-orientated, problem solving Microsoft Excel, communication, detailorientated, organisational skills Sales assistant Sales and customer service Communication, organisation, detailoriented, Microsoft Excel Financial manager Business and finance Communication, Microsoft Excel, planning, building effective relationships, decisionmaking Retail manager / supervisor Retail Communication, leadership, organisation, planning Sales, business development Marketing, marketing management, budgeting, social media, teamwork / collaboration Accounting, budgeting, balance sheet, account reconciliation Data analysis, SQL Accountancy, invoice processing, accounts payable / receivable, account reconciliation Sales, customer service Finance, accounting, budgeting Store management, retail industry knowledge, retail management, KPIs, sales, customer service Employers tend to recruit those with School Level 2 or higher qualifications (e.g. 5 GCSEs) Level 2 or higher qualifications (e.g. 5 GCSEs) Degree (although not essential) Degree Degree Degree Level 2 or higher qualifications (e.g. 5 GCSEs) Level 2 or higher qualifications (e.g. 5 GCSEs) Degree Level 2 or higher qualifications (e.g. 5 GCSEs) 32

33 Job family Baseline skills (mentioned in over 10% of job ads in Berkshire) Specialist Skills (mentioned in over 20% of job ads in Berkshire) Retail sales associate Retail Communication, organisational skills Sales, customer service, retail industry knowledge, retail sales, product sales Employers tend to recruit those with Level 2 or higher qualifications (e.g. 5 GCSEs) 33

34 4.2.3 Skills in high demand Tables 4 to 6 show which skills are most frequently cited in job posting in Berkshire and England, illustrating relative and changing demand. The data suggests that the top skills in demand by Berkshire employers are: basic customer service; general sales, project management, Microsoft Office and budget management (table 4). The highest climbing skills between 2016 to 2017 were: general accounting, teaching, childcare, budget management and business strategy (table 5). Table 5 shows relative demand for skills in Berkshire versus the national average. Most of the top 10 skills in higher demand locally than nationally are IT skills, the remainder being sales, project management and customer relationship management skills. In terms of baseline skills (these are sometimes also called soft skills or transferable skills and include skills that are useful across a variety of occupations), communication skills are in highest demand by far (figure 16). Table 4: Specialist skills most frequently cited in job postings in Berkshire, Change CUSTOMER AND CLIENT SUPPORT: Basic Customer Service SALES: General Sales BUSINESS: Project Management INFORMATION TECHNOLOGY: Microsoft Office And Productivity Tools FINANCE: Budget Management EDUCATION AND TRAINING: Teaching BUSINESS: Business Process And Analysis INFORMATION TECHNOLOGY: Software Development Principles INFORMATION TECHNOLOGY: SQL Databases And Programming SALES: Business Development MARKETING AND PUBLIC RELATIONS: Customer Relationship Management (CRM) FINANCE: General Accounting INFORMATION TECHNOLOGY: Technical Support BUSINESS: People Management INFORMATION TECHNOLOGY: Operating Systems BUSINESS: Business Strategy INFORMATION TECHNOLOGY: Enterprise Resource Planning (ERP) BUSINESS: Key Performance Indicators ADMINISTRATION: General Administrative And Clerical Tasks INFORMATION TECHNOLOGY: Web Development INFORMATION TECHNOLOGY: JavaScript And JQuery ADMINISTRATION: Administrative Support INFORMATION TECHNOLOGY: System Design And Implementation INFORMATION TECHNOLOGY: Microsoft Development Tools SALES: General Sales Practices BUSINESS: Contract Management SUPPLY CHAIN AND LOGISTICS: Procurement MARKETING AND PUBLIC RELATIONS: General Marketing INFORMATION TECHNOLOGY: Telecommunications MARKETING AND PUBLIC RELATIONS: Social Media INFORMATION TECHNOLOGY: Java Source: Labour Insight, Burning Glass Technologies (extracted 24/01/2017) 34

35 Table 5: Specialist skills - highest climbers between 2016 and Change FINANCE: General Accounting EDUCATION AND TRAINING: Teaching PERSONAL CARE AND SERVICES: Child Care FINANCE: Budget Management BUSINESS: Business Strategy INFORMATION TECHNOLOGY: Software Development Methodologies HEALTH CARE: Social Work INFORMATION TECHNOLOGY: IT Automation INFORMATION TECHNOLOGY: Software Development Tools INFORMATION TECHNOLOGY: Version Control INFORMATION TECHNOLOGY: Scripting Languages Source: Labour Insight, Burning Glass Technologies (extracted 24/01/2017) Table 6: Specialist skills in higher demand in Berkshire than the national average England TVB Difference SALES: General Sales INFORMATION TECHNOLOGY: Operating Systems INFORMATION TECHNOLOGY: General Networking INFORMATION TECHNOLOGY: Technical Support BUSINESS: Project Management INFORMATION TECHNOLOGY: Enterprise Resource Planning (ERP) INFORMATION TECHNOLOGY: Oracle INFORMATION TECHNOLOGY: Network Configuration MARKETING AND PUBLIC RELATIONS: Customer Relationship Management (CRM) INFORMATION TECHNOLOGY: Telecommunications INFORMATION TECHNOLOGY: Cloud Solutions SALES: Inside Sales CUSTOMER AND CLIENT SUPPORT: Basic Customer Service BUSINESS: Business Strategy INFORMATION TECHNOLOGY: Network Protocols SALES: Business Development INFORMATION TECHNOLOGY: Cybersecurity INFORMATION TECHNOLOGY: Systems Administration SALES: Sales Management INFORMATION TECHNOLOGY: IT Management SALES: General Sales Practices INFORMATION TECHNOLOGY: Virtual Machines (VM) MARKETING AND PUBLIC RELATIONS: General Marketing SALES: Solution Sales Engineering INFORMATION TECHNOLOGY: System Design And Implementation INFORMATION TECHNOLOGY: Network File System (NFS) SALES: Account Management MARKETING AND PUBLIC RELATIONS: Marketing Management SALES: Telemarketing BUSINESS: Business Process And Analysis Source: Labour Insight, Burning Glass Technologies (extracted 24/01/2017) 35

36 Figure 16: Baseline skills in highest demand Communication Skills Planning Organisational Skills Microsoft Excel Detail-Orientated Problem Solving English Building Effective Relationships Creativity Writing Microsoft Office Research Leadership Presentation Skills Computer Literacy Time Management Troubleshooting People Management Verbal / Oral Communication Multi-Tasking Mentoring Meeting Deadlines Written Communication Microsoft Powerpoint Articulate Self-Starter Analytical Skills Microsoft Word Energetic 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% Source: Labour Insight, Burning Glass Technologies 36

37 4.2.4 Qualification subject areas and certifications in high demand The vast majority of job adverts do not state that applicants are required to have studied certain subjects or hold certain certifications. Tables 7 and 8 list which qualification subject areas and certifications are in highest demand where employers do state them in adverts. The majority of subject areas in highest demand in Berkshire are STEM-related, the exceptions being Business Administration (the subject area in highest demand), Teacher Education, English and Marketing. The Construction Skills Certification Scheme (CSCS) card is the certification in highest demand from Berkshire employers, followed by Accountancy certifications. Table 7: Job postings qualification subject areas in highest demand in Berkshire 2017 Subject Area Job postings Business Administration and Management, General 3,600 Engineering 3,200 Computer Science 2,400 Accounting 2,000 Electrical and Electronic Engineering Technologies/Technicians, Other 1,400 Teacher Education, Multiple Levels 1,100 English Language and Literature, General 1,100 Marketing/Marketing Management, General 900 Mathematics 800 Mechanical Engineering 700 Finance, General 600 Biology/Biological Sciences, General 600 Chemistry 500 Physics 500 Economics 500 Source: Labour Insight, Burning Glass Technologies 37

38 Table 8: Jobs postings certifications in highest demand in Berkshire 2017 Certifications Job Postings Construction Skills Certification Scheme (CSCS) Card 1,800 Accountant (Qualified) 1,600 Health and Care Professions Council (HCPC) Registration 800 Nursing and Midwifery Council (NMC) Registration 500 Cisco Certified Network Associate (CCNA) 500 Social Worker (Qualified) 500 Cisco Certified Network Professional (CCNP) 500 Registered General Nurse (RGN) 500 Construction Plant Competence Scheme (CPCS) Card 300 Microsoft Certified Systems Engineer (MCSE) 300 Forklift Truck 300 Food Safety Certificate 200 HGV Licence 200 Mortgage Advice and Practice Certificate (CEMAP) 200 Digital Tachograph Driver Smart Card 200 PRINCE2 200 First Aid Certificate 200 Biomedical Scientist (Registered) 200 Chartered Engineer (CENG) 200 Cisco Certified Internetwork Expert (CCIE) 200 Source: Labour Insight, Burning Glass Technologies 38

39 4.2.5 External skills deficiencies Comparative position Employers can find roles hard-to-fill for a variety of reasons. Jobs could be in hard-to-reach locations, could involve unsociable hours or be viewed as not being good work for some other reason. We are particularly interested in positions that employers find difficult to fill due to a lack of applicants with the required skills (skills shortage vacancies). As it is in this area where we (Thames Valley Berkshire LEP and partners) can channel investment. When employers struggle to find staff with the required skills, it can inhibit their growth, and the growth of the local economy as a whole. Within the public sector, skills shortages (and recruitment difficulties due to other factors) can impact on the quality of public service provided, and potentially the wellbeing of residents. Overall, Berkshire has a higher proportion of vacancies in the local economy than the national average (4% of employment compared to 3% nationally), and a higher proportion of these vacancies are described by employers as being hard-to-fill (35% versus 33%). In 2015, employers in Berkshire were, however, seemingly finding it easier to fill vacancies than their counterparts in surrounding LEP areas (particularly Swindon and Wiltshire and Oxfordshire). Employers in Berkshire attribute a much higher proportion of hard-to-fill vacancies to applicants lacking the required skills (skills shortages) than the national average, and attribute a smaller proportion to contextual factors (such as location or pay). Indeed, skills shortages are more prevalent in Berkshire (as a proportion of all hard-to-fill vacancies) than in any of the surrounding LEP areas (table 9). Employers looking to recruit machine operatives, associate professionals, managers and people into skilled trades roles are most likely to struggle to fill vacancies due to a lack of applicants with the required skills (table 10). Table 9: Hard-to-fill vacancies and skills shortage vacancies by LEP area Number of vacancies Vacancies as a % employment Number of hard-to-fill (HTF) vacancies Hard-tofill vacancies as a % of vacancies Number of skills shortage vacancies (SSV) SSV as a % HTF vacancies Thames Valley Berkshire 20,000 4% 6,900 35% 5,500 80% Oxfordshire LEP 13,800 4% 6,400 46% 3,700 58% Solent 21,400 3% 6,600 31% 4,600 70% Enterprise M3 32,500 4% 13,800 42% 9,900 72% Swindon and Wiltshire 9,700 3% 4,600 47% 2,900 63% Buckinghamshire Thames Valley 8,900 4% 3,700 42% 2,100 57% England 797,400 3% 262,300 33% 180,200 69% Source: UK Employer Skills Survey 2015, UK Commission for Employment and Skills 39

40 Table 10: Vacancies by nature and occupation Hard-to-fill vacancies as a % vacancies SSV as a % HTF vacancies SSV as a % vacancies Managers 24% 89% 21% Professionals 38% 85% 32% Associate professionals 34% 94% 32% Administrative/clerical staff 11% 39% 4% Skilled trades occupations 41% 86% 36% Caring, leisure and other services staff 39% 63% 24% Sales and customer services staff 37% 83% 30% Machine operatives 59% 98% 57% Elementary staff 35% 56% 19% Source: UK Employer Skills Survey 2015, UK Commission for Employment and Skills The largest number of skills shortage vacancies are reported for associate professional and professional roles. In terms of concentration (i.e. the proportion of all vacancies that are skills shortage vacancies), skills shortages are most highly concentrated in Berkshire in machine operative roles. Figure 17: Skills shortage vacancies by occupation 1,600 70% 1,400 1,200 57% 60% 50% 1, % 32% 32% 36% 24% 30% 19% 40% 30% 20% 200-4% 10% 0% TVB SSV England % TVB % Source: UK Employer Skills Survey 2015, UK Commission for Employment and Skills 40

41 Under-supply (hard-to-fill) roles For this report we have developed an experimental method for examining, at a granular level, roles for which there appears to be an under-supply of people to fill. To do this we have matched data from two datasets (EMSI Analyst and Burning Glass s Labour Insight). We have validated data using qualitative information gathered through our 2017 Berkshire Skills Survey. We have compared the expected number of job openings for a certain occupation per year (based on predictions of job growth, and attrition due to retirements / people leaving the labour market) with the actual number of job postings for certain roles, along with changes in wage levels over the last two years. The premise being that a high number of job postings per projected job opening suggests an undersupply of people, which is resulting in either the re-posting of job adverts due to the failure to fill vacancies, or high labour turnover (churn) due to plentiful job opportunities allowing people to regularly move from job to job. Figure 18: Reasons for a vacancy arising illustrative example 72% 18% 10% Jobs created through growth in the total number of jobs Jobs created due to retirements / people leaving the labour market Jobs created due to churn (people leaving jobs for a new job) Whilst not a definitive list (partly as some occupations were removed for data quality issues picked up during the matching process), the occupations listed in table 11 are some of the jobs for which there appears to be an under-supply of people within the Berkshire labour market. All the occupations listed had at least eight times as many job postings as projected job openings (the average across all occupations being five) and have seen advertised wages in Berkshire rise over the last two years. Table 11 also includes information about: the most frequently advertised job titles within each occupational; who entry-level jobs tend to be aimed at (in terms of level of education); the total number of jobs in Berkshire (to give a sense of scale); the extent to which there has been job growth in each occupation over the last three years; the projected number of job openings by occupation (i.e. the number of jobs expected to become available as a result of job growth or people retiring); whether there are more jobs in this occupation in Berkshire than the national average; the number of job postings; and the extent to which job roles are at risk of automation. 41

42 Table 11: Hard-to-fill roles Berkshire 2016 Occupation Most frequently advertised jobs in 2016 Entry level jobs usually aimed at Number of jobs Number of jobs % change Annual openings * Berkshire Specialism Total no. of job postings 2016 Job postings per opening ** Risk of Automat ion Programmers and software development professionals Business sales executives IT business analysts, architects and systems designers Software Development Engineer, Software Developer, Java Software Developer,.Net developer, CRM Developer, C# Developer Sales Executive, Sales Consultant, Sales Engineer Solutions Architect, Systems Engineer, Customer Support Engineer, Technical Architect, Systems Analyst HE leavers 11,300 13,000 15% 940 Very high 8, Low Risk HE leavers 4,300 4,700 10% 340 High 5, Low Risk HE leavers 4,100 4,600 13% 310 High 4, Low Risk Nurses Registered Nurse, Staff Nurse, Charge Nurse HE leavers 7,200 7,700 7% 460 Below average 4, Low Risk IT user support technicians Technical Support Engineer, Computer Support Engineer, IT Support Analyst, Applications Analyst, IT Support Technician Mix of school, FE and HE leavers 3,500 3,700 5% 200 High 3, Medium Risk IT operations technicians Chartered and certified accountants Systems Administrator, Database Administrator, Linux Systems Administrator, Network Engineer Accountant, Management Accountant, Financial Accountant HE leavers 3,900 4,400 14% 320 High 2, Low Risk HE leavers 3,700 3,600-2% 250 Average 2, High Risk Elementary construction occupations General Labourer, Handyman, Construction Labourer School and FE leavers 1,300 1,300 3% 60 Below average 1, High Risk Electricians and electrical fitters Electrician, Electrical Engineer, Maintenance Engineer FE leavers 2,900 2,800-3% 90 Average Low Risk 42

43 Quantity surveyors Quantity Surveyor FE ad HE leavers % 30 Below average Social workers Social Worker, Family Support Worker HE leavers % 80 Below average Telephone salespersons Vehicle and parts salespersons and advisers Metal machining setters and setter-operators Travel agents Air-conditioning and refrigeration engineers Telemarketer, Customer Service and Sales Medium Risk Low Risk Anyone 1,200 1,300 3% 60 High High Risk Parts Advisor, Automotive Service Advisor Anyone % 40 Average High Risk CNC Programmer, CNC Miller, CNC Machinist, CNC Turner Business Travel Consultant, Travel Consultant, Travel Agent Refrigeration Technician, Air Conditioning Engineer Anyone % 20 Below average HE leavers % 20 Below average FE leavers % 10 Below average Medium Risk Low Risk Medium Risk 43

44 4.2.6 In-house skills deficiencies Employers in Berkshire are amongst the most likely in the country to report skills deficiencies within their existing workforce. 17% report having skills gaps in their current workforce (the second highest proportion of all LEP areas, after Coventry and Warwickshire). In total, over one in five Berkshire employers (22%) report having skills deficiencies (either in their current workforce or when trying to recruit), the second highest figure in the country. Skills gaps (i.e. staff not being fully proficient) are most prevalent (both in terms of volume and concentration) amongst machine operatives and elementary staff. Berkshire employers are more likely to report that skills gaps are having an impact on their ability to perform than nationally (figure 19). Figure 19: Impact of skills gaps England TVB 0% 10% 20% 30% 40% 50% 60% 70% 80% Yes - major impact Yes - minor impact Source: UK Employer Skills Survey 2015, UK Commission for Employment and Skills 44

45 4.2.7 Type of skills lacking Towards the end of 2017, Thames Valley Berkshire LEP asked local employers to identify what skills they found particularly difficult to find in the local labour market. A very wide range of over 100 skills were identified. Some very specific and specialist (such as caring for and riding racehorses and highlevel welding and other very generic (such as work ethic ). Overall, the top specialist skills mentioned were: Digital tech Engineering Customer service Analytics And the top generic skills mentioned were: Communication Leadership Work ethic A flavour of comments provided are below: It is less about technical skills but more about the behavioural skills to work across broader areas With graduates, many lack the right attitude or a practical appreciation of the subject Large national employer Small manufacturing firm, Reading [It is hard to find] Computer Scientists with strong programming skills Large construction firm, Reading Technical roles in the main are more difficult fill than [roles requiring] administration or service industry-based skills Large employer, Windsor and Maidenhead 45

46 4.2.8 Focus on Digital Tech A substantial volume of national and international evidence identifies significant skills shortages for digital tech roles. In order to identify specific issues within Berkshire, we asked specific questions of local employers of tech staff within our 2017 Berkshire Skills Survey. Whilst the number of employers who responded to these questions was relatively small (35 in total), their responses nevertheless provide a useful insight. Key findings: Respondents stated that they find it more difficult to recruit mid-level tech specialists than junior or senior staff Respondents are finding it most difficult to recruit into the following functional areas: o Big data analytics o Software development o Cyber security o Data analysis o Cloud computing The top two reasons employers are finding it difficult to recruit digital tech staff are: o Applicants do not have the required skills (72%) o Not able to meet salary demands of applicants (60%) Other reasons cited included o Competition from other employers o High living costs 46

47 4.3 Skill needs of the self-employed Motivations for becoming self-employed Much of the research conducted to establish demand for skills is conducted with employers, this can mean that the contribution that those who are self-employed make to local economies, and the skills they require can be overlooked. Motivations for being self-employed can vary greatly. Some examples are below: Starting a new venture with a view to significantly growing a business Becoming self-employed to be own boss Becoming self-employed to enable flexible working (potentially to fit with caring responsibilities) Becoming self-employed due to being unable to find similar work as an employee Accepting less job security in favour of earning more money (for example contractors) New business start-ups have the potential to play a significant role in local economic growth. Small, nimble firms can be highly innovative and can quickly embrace new technologies. Start-ups that then grow quickly can create a large proportion of new jobs within local economies. Self-employment that is enabling people to work in a way that suits them, or that is enabling them to work rather than be unemployed or underemployed, can also be beneficial for local economies as well as for the individuals themselves Skill requirements of the self-employed Research undertaken by the Institute for Employment Studies (IES) on behalf of the UK Commission for Employment and Skills (UKCES) in 2011 found that that the following generic competences were required for success in self-employment (over and above any occupational skills which may be required): Values, beliefs and attitudes (e.g. action orientation, desire for independence, initiative, creativity etc.) 'Soft' skills including interpersonal, communication and networking skills Realistic awareness of the risks and benefits of self-employment Functional business skills (financial, HR management, market research) Relevant business knowledge (legislative, taxation, sources of finance etc.) The relative importance of each of these varies between the nature of the business (growth-oriented or lifestyle, for example), and between the different stages of the self-employed lifecycle (pre-entry, entry and survival, growth etc.) 20 Forbes.com have produced a further useful list of skills and behaviours that successful entrepreneurs, particularly those looking to scale a business, have: Resiliency

48 Focus Discipline to invest for the long term (patience) Ability to find and manage people Sales skills Enthusiastic learners Ability to self-reflect Self-reliance According to the IES research, evidence shows that compared with employees, the self-employed need the ability to combine and deploy a wider range of competences. The research cites some smallscale studies that suggest that many self-employed/potentially self-employed may have difficulties due to: Insufficient self-awareness of own skill needs, and lack of self-assessment as 'business people' Lack of business experience and/or lack of relevant business training, with particular reference to skills such as cash flow/financial management, marketing/winning business, creating and management business systems Insufficient 'soft' skills, including interpersonal skills Lack of staff management skills (where relevant) The research also highlights that compared with employees, the self-employed are only half as likely to participate in work-related training or education. This raises the question about whether, over time, this lower level of work-related training leads to a widening skills gap between employees and the self-employed, as the latter fail to update and develop their skills and competences. 4.4 Skills needs of managers Much of the research conducted to establish skills deficiencies is conducted with employers, and questions are asked of senior managers who answer in relation to their employees. This can mean that the skills deficiencies of managers and leaders, which can have a significant impact on organisational performance, are under-played. Research by the Chartered Management Institute (CMI) highlights 21 : The UK lags behind its competitors in terms of productivity and management practices 43% of UK line managers rate their own managers as ineffective 71% of employers give no or inadequate training to new managers 64% of employers think a lack of leadership and management skills is holding back growth 68% believe that management and leadership deficiencies are preventing employees reaching their full potential The report identifies the following 10 key characteristics that effective 21 st century managers and leaders need: Clear sense of purpose Strong values and personal integrity 21 %20Leadership%20to%20unlock%20long-term%20growth.pdf 48

49 Commitment to developing others through coaching and mentoring Champion of diversity Ability to engage and communicate across all levels Self-awareness and taking time to reflect Collaborative, networked and non-hierarchical Agile and innovative, technologically curious and savvy Personal resilience and grit Excellent track record of delivery 4.5 Valuable skills for individuals In the previous sections we have focused on which skills are in greatest demand by employers across Berkshire, and which skills are most important for the economic growth or the wellbeing of local the population as a whole. Here we consider the types of skills could be most valuable to different groups of individuals, with a particular focus on those who require support to enter / re-enter employment, or support maintaining employment. Such skills could include: Interview skills Employability skills, particularly for young people Industry licences or certifications (e.g. CSCS cards within construction) Business and entrepreneurial skills for those wishing to become self-employed Up-to-date technical skills for groups wishing to retrain (for example women looking to return to work after having children, the over 50s looking to change careers after being made redundant) Practical skills to cope with additional needs (such as dyslexia or deafness) in the workplace 49

50 4.6 Future demand for skills Times of change Disruptive changes to business models will have a profound impact on the employment landscape over the coming years World Economic Forum, The Future of Jobs and Skills, 2016 Across the globe, technological change is a very significant driver of industrial change. This includes the growth in cheap computing power and the ubiquity of mobile internet. Technological trends with potentially far-ranging implications that have not yet fully materialized, such as 3D printing, artificial intelligence and the Internet of Things, are expected to be well underway in the next few years. Demographic and socio-economic shifts (including an ageing population) are expected to have nearly as strong an impact on future business models and organisational structures, and therefore jobs and skills Occupational trends Research undertaken by the World Economic Forum (WEF) suggests that the global workforce is expected to experience significant churn between job families and functions in the future, with administrative and routine white-collar office functions at risk of being decimated and strong growth in computer, mathematical and engineering related fields. The WEF research identified two key new and emerging job types: Data analysts (which companies expect will help them make sense and derive insights from the vast amount of data generated by technology) Specialised sales representatives (as practically every industry will need to become more skilled in commercialising and explaining their offerings to clients and consumers) Other potential new and emerging jobs include: New types of human resources and organisational development specialists Engineering specialties such as materials, bio-chemicals, nanotech and robotics Regulatory and government relations specialists Geospatial information systems experts Commercial and industrial designers Research undertaken by NESTA (The Future of Skills: Employment in 2030, 2017) suggests that across the UK, 8% of workers are in occupations that are very likely to grow over the next years and 21% are in occupations that are very likely to shrink. They predict that: Many low- or middle-skilled occupations (e.g. manufacturing production and administrative and secretarial roles) will become less important in the workforce, due to technological changes and globalisation. Mid-skilled agriculture, skilled trades and construction occupations, are likely to be less affected by these trends. 50

51 Non-tradable services, such as hospitality, are likely to grow in importance. Many of these occupations require low or middle level technical skills, but might require high levels of people skills. Education, healthcare and wider public sector occupations are predicted to see growth, partly as a result of population ageing and high resistance to automation. Growth is anticipated for occupations such as sports and fitness, as well as for therapy. Creative, digital, design and engineering occupations have bright outlooks and are strongly complemented by digital technology. Architectural and green occupations are expected to benefit from greater urbanisation and a greater interest in environmental sustainability. Roles such as management analysts, training and development specialists and labour relations specialists occupations which should benefit from the reorganisation of work are projected to grow in the workforce. The number of financial specialists is expected to fall. Which is an example of automation having an impact on cognitively-advanced occupations as well as more routine roles. There is a predicted decline in many sales occupations, consistent with an expansion in digital commerce, niche roles like sales engineers and real estate agents may buck this trend Future skills Generic skills that are predicted (by the WEF and NESTA) to become increasingly important in the future include: interpersonal skills; high-order cognitive skills (such as such as originality, fluency of ideas and active learning) and skills related to system thinking (such as judgement and decision making). Below are the generic skills that the WEF believe will be in high demand in 2020: Complex Problem Solving Critical Thinking Creativity People Management Co-ordinating with Others Emotional Intelligence Judgement and Decision Making Service Orientation Negotiation Cognitive Flexibility Occupational trends in Berkshire Looking at recent and projected changes in the volume of jobs of different type within Berkshire, we see that jobs categorised as high-skill (managerial, professional and associate professional occupations) have grown at the fastest rate in recent years and are predicted to continue to do so (figure 20). Slower short-term growth is predicted for middle-skill (skilled trade and administrative occupations), service-intensive (care, sales and customer service occupations) and labour-intensive (manual and service occupations) jobs. 51

52 Figure 20: Historic and projected occupational change in Berkshire, 2007 to , , , , ,000 50,000 0 High-skill Middle-skill Service-intensive Labour-intensive Source: EMSI Analyst,2018 At a more granular level, the number of people employed as programmers and software development professionals in Berkshire grew at the greatest rate and in the greatest volume between 2012 and Five of the top 10 growth occupations, in terms of volume, were IT occupations (table 12). Table 12: Historic trends in employment by occupation Description 2012 Jobs 2017 Jobs Change % Change Programmers and software development professionals 10,317 13,188 2,871 28% Sales accounts and business development managers 12,867 14,243 1,376 11% Primary and nursery education teaching professionals 6,395 7,716 1,321 21% IT specialist managers 8,220 9,504 1,284 16% Kitchen and catering assistants 7,536 8,660 1,124 15% Other administrative occupations 11,927 13,029 1,102 9% Other information technology and telecommunications professionals 7,290 8,374 1,084 15% Teaching assistants 5,125 6, % IT operations technicians 3,576 4, % IT business analysts, architects and systems designers 3,776 4, % Source: EMSI Analyst, 2018 Looking forward to 2022 (table 13), the number of people employed as programmers and software developers in Berkshire is predicted to continue to grow, but in smaller numbers and at a slower rate. In terms of projected growth, five of the top 10 occupations are service-intensive (care workers) or labour-intensive roles (catering assistants, van drivers and waiting staff). Two teaching roles also feature in the top

53 Table 13: Projected trends in employment by occupation (4-digit SOC) SOC Description 2017 Jobs 2022 Jobs Change % Change 2136 Programmers and software development professionals 13,188 13, % 6145 Care workers and home carers 9,194 9, % 2315 Primary and nursery education teaching professionals 7,716 8, % 4159 Other administrative occupations 13,029 13, % 9272 Kitchen and catering assistants 8,660 8, % 3545 Sales accounts and business development managers 14,243 14, % 2112 Biological scientists and biochemists 2,638 2, % 8212 Van drivers 4,730 5, % 6125 Teaching assistants 6,085 6, % 9273 Waiters and waitresses 5,671 5, % Source: EMSI Analyst, Impact of Brexit At the time of writing (April 2018), we do not know how Brexit will affect the performance of the Berkshire economy, or the supply of people Berkshire employers have available to them. Research undertaken to date provides mixed predictions. Centre for Cities 22 suggests that Slough and Reading are amongst the five UK cities believed to be at greatest risk as a result of the UK exiting the European Union. Whilst My Local Economy 23 identify Bracknell, Reading, Wokingham and Windsor and Maidenhead as potentially being some of the least vulnerable local authority areas to the possible negative impacts of Brexit. In our 2017 Berkshire Skills Survey we asked employers whether the Brexit vote had led to any specific recruitment, retention or skills issues. Of the 54 employers who responded to this question, 37% said the vote had not led to any issues, 31% said it hadn t yet, 19% said it hadn t yet but they had specific concerns that it would do and 13% had felt some impact

54 Figure 21: Whether the Brexit vote has led to any recruitment, retention of skills issues 13% 19% 37% 31% No Not yet Not yet, but have specific concerns that it will Yes Source: Berkshire Skills Survey 2017 Note, findings are indicative only, results are not representative of Berkshire employers as a whole. Some quotes that illustrate where impact has been felt, or where employers think it will be, are overleaf. 54

55 There is a need to rapidly accelerate investment in local skills development to retrain and develop existing high-quality people who may otherwise leave the region. Major international firms may not stay here if they perceive not only Brexit-related trade issues but also a skills shortage. The Thames Valley may be able to stave off the worst effects on its international businesses if it is able to depend on good infrastructure and a steady supply of high quality people Large engineering firm We recruit many graduates, and typically we have to recruit from overseas to fill vacancies. We're working on our data to get the fuller picture, but we appear to be getting less interest from European graduates Education establishment The recruitment from Europe of qualified engineers especially Spain, Portugal, Greece and Italy has more or less stopped Large engineering firm Lack of applications from candidates requiring a Certificate of Sponsorship due to uncertainty of future security in the UK Education establishment A large proportion of our seasonal workforce in the UK are EU citizens. It is increasingly difficult for us to move talent into/out of the UK business from the rest of our global business Large food and drink firm A large proportion of our existing workforce is from Europe. Existing staff have concerns re: what Brexit will mean for them personally. There are also concerns re: reduction in new recruits from Europe. i.e. drying up of recruitment pools Large public sector employer It has unsettled overseas applicants but we have always recruited from across the world so the effect is modest Large property firm Nothing specific, but the general market uncertainty is impacting growth Medium professional services firm Not at the moment, but may do in the future as many of our trades and removal teams are Eastern European Small property firm 55

56 Whilst the impact of exiting the EU is still unknown, national-level intelligence suggests that recruitment and skills in the following sectors are most likely to be affected in some way: Agriculture Manufacturing Construction Logistics Health and social care Finance Hospitality Digital technology Universities 4.7 Priority job families Our research has identified 10 priority job families in which we believe efforts should be concentrated locally to ensure a sufficient supply of skills. They have been split into three tiers in order of priority. Table 14 below sets out these job families along with the reasons why they have been selected. Table 14: Priority job families Tier Job family High number of jobs Job growth predicted Reason why identified as a priority Employers finding it hard to fill vacancies High value to the economy of Berkshire Tier 1 Digital tech Engineering & science Tier 2 Construction Valuable to the wellbeing of Berkshire Health & social care Education Tier 3 Transport & distribution Hospitality Business & finance Sales & customer service Creative Further information about the majority of the job families are provided on the following pages. 56

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70 5 Berkshire s education and skills landscape There are 62 secondary schools in Berkshire, 22 of which are rated outstanding by Ofsted. A higher proportion of schools in Berkshire have Sixth Forms than average across the UK. There are five Further Education or Specialist Education Colleges within Berkshire, plus three more within commuting distance for some. In addition, there are a number of Independent Training Providers based in Berkshire, who are the main providers of Apprenticeships. The University of Reading is Berkshire s anchor higher education establishment, with two London Universities also having campuses within the sub-region. Table 15: Further Education Colleges and Higher Education Institutes In Berkshire Nearby Further Education Colleges Bracknell and Wokingham College Basingstoke College Newbury College Reading College (Activate Learning) Buckinghamshire College Group Henley College East Berkshire College Berkshire Agricultural College (BCA) Higher Education Institutes University of Reading Henley Business School Berkshire Institute for Health (University of West London) Royal Holloway Imperial College London Silwood Park University College of Estate Management Largest Independent Training Providers Chiltern Training QA Limited West Berkshire Training Consortium The Skills Partnership Key Training The Knowledge Academy In terms of academic achievement, 68.5% of pupils gain five or more GCSEs at grades A*-C (including English and Maths) in Berkshire, compared to only 59.3% nationally. In terms of subjects studied at school, 34.1% of A-levels entered by Berkshire young people are STEM (maths and science), compared to 30.9% nationally. 24 However, only 39.4% of STEM A-levels were entered by girls (compared to the national average of 42.5%). Focusing in on computing (given the dominance of the digital tech sector locally and associated skills needs) we see that the numbers undertaking A-level in this subject are low (as they are nationally) in 24 Source: Department for Education, 2015/16 70

71 comparison to other subjects. There were 144 A-level examination entries for Computing A-levels in state-funded schools in Berkshire in 2015/16, out of a total of 12,266 entries for all subjects. 71

72 6 Skills pipeline 6.1 Employer talent pipeline strategies Before establishing the extent of market failure, and therefore need for public intervention in the skills system, we need to consider how employers (and the wider economy) address their skills needs. Firstly, many employers are unware of, or are not concerned with, the potential benefits of improving workforce skills. Many will fall into what the Bank of England describes as Britain s long-tail of weak, less productive companies. Where they are aware, and a skill or human resource need is identified, employers tend to adopt one of three strategies (figure 22): Develop existing staff (in-house, via external training courses, or through other means) Recruit experienced workers (who have all or most of the skills required, sometimes from overseas) Recruit a new entrant without previous experience (education leaver or career changer) We will review each of these strategies in turn. Figure 22: Talent pipeline strategies 72

73 6.1.1 Immediate skills / human resource need: develop existing staff Approaches to staff development According to the UK Employer Skills Survey, the vast majority (89%) of Berkshire employers with skills gaps amongst existing employees have taken action to help overcome them. The most common response being to increase training activity (78%). A relatively large proportion, 18%, have turned to recruiting non-uk nationals, higher than the England average of 10%. Table 16: Responses to skills gaps TVB England Increase training activity / spend or increase/expand trainee programmes 74% 68% More supervision of staff 59% 56% Implementation of mentoring / buddying scheme 56% 45% More staff appraisals / performance reviews 55% 46% Reallocating work 42% 33% Changing working practices 34% 27% Increase recruitment activity / spend 26% 20% Recruiting workers who are non-uk nationals 18% 10% Source: UK Employer Skills Survey 2015, UK Commission for Employment and Skills (base: all those with skills gaps) In total, 70% of Berkshire employers provided training for their staff in the 12 months to summer 2015, and 30% did not. Of those who didn t, just under two-fifths wanted to but faced barriers of some kind. In total, 45% of all employers express a wish to undertake more training than they had in the previous 12 months. Figure 23: Extent to which Berkshire employers are in a training equilibrium 70% employers provided training in last 12 months (England = 66%) 30% employers didn t provide training (England = 34%) 46% wanted to train more 54% do enough training 41% wanted to train 59% have no training need Overall, 55% in training equilibrium (no acknowledged demand) Overall, 45% want to undertake more training 73

74 Volume of training At an employer level, Berkshire appears to be performing well in terms of staff development. However, when examining the number of staff receiving training, we see that employers in Berkshire are training fewer staff than the national average (in 2015, 56% of staff received training over the last 12 months, compared to 63% nationally) and for a shorter length of time (5.8 training days per trainee versus 6.8 days nationally). In fact, when calculated as a proportion of all staff, Berkshire employers provide staff with the least amount of time to train than in all other LEP areas. This could in part be as a result of a smaller public sector than average in Berkshire, which tends to have higher rates of training. At an occupational level, fewer professionals and associate professionals receive training from their employers in Berkshire than nationally (52% versus 67% in the case of professionals) but more people working in skilled trades and elementary roles receive training than is the case nationally Type of training Employers develop their existing staff in many ways, largely determined by the nature of the employer (size, sector, historic approach to training, training budget and culture) and the type of skills required. Some examples are set out in figure 24. Figure 24: Approached to training and development Training courses Long courses / short courses In-house training programme Courses leading to formal qualifications Paid-for courses / free courses Courses provided by commercial training firms Courses provided by government subsidised training providers Courses provided by Universities Face-to-face courses / online courses Self-taught / trainer taught Mandatory training Business development training Other development activities Supervison / guidance Observing others Perform tasks over and above job role and recieving feedback Coaching Mentoring Cross-team / company projects - learning different approaches Secondments 74

75 Barriers to training A lack of time or funds are by far the main reasons employers cite for not providing more training. This is potentially a greater problem in Berkshire due to the strong productive economy. A small, but, slightly higher than average, proportion of employers from Berkshire voice disquiet about the availability of good local training provision. Some comments provided by respondents to our 2017 Berkshire Skills Survey regarding barriers to training are set out below. Time - It takes years to assemble enough experience in our industry. We were one of a very few employers who continued to recruit graduates in the recession, but many other employers will pay large salaries to poach these staff such that it is difficult to retain staff we invest time in training Large property sector employer Having time to release them for training Small creative industries employer Capacity/time - to release staff to train and maintain productivity Large public sector employer Access to local providers of high quality Further Education in relation to both engineering and computer sciences Internal budget for training Large manufacturing and research employer Large construction employer Lack of decent providers for technical training, lack of STEM teachers Small manufacturing employer Reduced funding to support continuing professional education - incentives/opportunities for our existing workforce where apprenticeships would not be appropriate Large public sector employer 75

76 Type of training providers used The vast majority (94%) of employers who offer external training to staff use commercial training organisations. Commercial organisations tend to be used for short courses, such as IT training, health and safety, industry certifications, presentation skills etc. They are also used for longer courses, such as management development. Further Education (FE) Colleges and Higher Education Institutes tend to be used for longer courses that lead to national qualifications. For example, NVQs, Apprenticeships, Masters degrees etc. Independent Training providers tend to be used for Apprenticeships and short courses. 21% of Berkshire employers who offer external training use FE colleges, and 12% use Higher Education Institutes (HEIs). Table 17: Type of training providers used by employers Type of training provider TVB England Offered internal training in the last 12 months 86% 85% Offered external training in the last 12 months 61% 64% Used FE Colleges to conduct their training (% of those offering external training) 21% 18% Used HEIs to conduct their training (% of those offering external training) 12% 10% Used commercial organisations to conduct their training (% of those offering external training) 94% 93% Worked with another employer to develop skills or expertise in the workforce 13% 19% Source: Employer Perspectives Survey, 2016, UK Commission for Employment and Skills (base = all those offering internal training / external training) Types of training provided to existing workforce The main type of training Berkshire employers provide to their workforce is job-specific training. This is followed by some statutory training and basic induction training. Around two-fifths of firms who train staff provide management training, and a similar proportion provide supervisory training. Table 18: Type of training provided Type of training % Berkshire employers Job specific training 88% Health and safety/first aid training 75% Basic induction training new staff receive when they start the job 74% Training in new technology 58% More extensive induction training for new staff 42% Management training 42% Supervisory training 38% Source: UK Employer Skills Survey 2015, UK Commission for Employment and Skills (base = all those offering training) 76

77 Role of Apprenticeships in workforce development Since the introduction of the apprenticeship levy, large employers are increasingly looking to use apprenticeships to upskill their existing workforce. Research carried out by Thames Valley Berkshire LEP in April 2017 with 33 levy-paying employers found that, most employers who plan to spend their levy anticipate spending the bulk of it on their existing apprenticeship programme and/or on upskilling their existing workforce. Key themes being: Many plan to use their levy on management and leadership development (often to aid succession planning), although it is not clear how much training and development in this area will be over and above what is already provided via existing workforce development programmes. Many plan to use the levy to upskill their digital, finance, social work, early years, catering and HR staff. Some noted that they plan to focus their levy on employees who are in the early stages of their career. Many plan to make use of higher-level standards (at degree level and above) to develop their workforce Some plan to use apprenticeships as a retention / engagement tool, particularly for graduates. Many plan to use performance reviews / Training Needs Analysis to identify which staff could benefit from apprenticeship training The main reasons employers gave for not using their levy to upskill their existing workforce were: We re planning to use the levy to upskill our non-client-facing staff. IT, L&D, finance etc. They haven t traditionally had as much focus, so the levy will provide an opportunity for upskilling people in these roles and increasing employee engagement We provide a lot of training to graduates but don t currently recognise it as an overall package of development. We could wrap it together with a qualification and market it more clearly as an investment in the individual They are unable to accommodate the requirement for apprentices to spend 20% of their time undertaking off-the-job training. They successfully use private training providers to deliver professional qualifications and don t want to change what works. They didn t have a good experience with Train to Gain so are sceptical about government training schemes. It s exciting from a workforce development perspective. We are hoping we can use all of our pot for this. We d like to use it for financial courses It could help upskill staff in light of ongoing restructuring. For example, moving people from supervisory to management positions 77

78 Many private sector companies interviewed felt that the levy would not provide any added value to their company, mainly due to the fact they were satisfied with their current training strategy. Others, however, felt it would have a positive impact, and ultimately increase and improve workforce development. Potential benefits of the introduction of the apprenticeship levy Encouraging more strategic thinking amongst senior leaders on current and future skill needs of the firm / organisation Improved employee engagement and retention (ultimately a cost saving) Greater transparency and focus on the ROI of training Using Standards to improve career path structures / progression planning within organisations Improved internal mentoring and coaching skills of staff who will be managing new Apprentices One key thing about the levy is that it has forced the conversation about L&D. We wanted to do more and it has pushed us to do so. And we now have buy-in at board-level Smaller levy paying employer Using the word apprenticeships has not helped. Conjures up an image of a gangly 16-year-old Very large global employer 78

79 6.1.2 Immediate skills / human resource need: Recruit experienced worker One of the main ways of filling a skills or human resource gap is to recruit an experienced worker with the required (or more or less the required) skills into a role Recruitment methods Within Berkshire, 50% of employers rely on word-of-mouth or personal recommendations to recruit, a higher proportion than the national average. Broadly speaking, word-of-mouth recruitment is a costeffective recruitment method that provides employers with employees that have a good fit to the organisation. It could however, limit the potential to recruit people who sit outside of known networks. For example, women returners, people with disabilities, or those who have been out of the workforce due to ill-health. Employers in Berkshire are also more likely to use paid-for recruitment services than the national average, which could be a reflection of the higher value jobs in the Berkshire economy or difficulties experienced when recruiting using other methods. Employers are also more likely to use social media to recruit. This could be related to the relatively high proportion of digital firms and / or corporates located in Berkshire, who may be better equipped to utilise this route. Table 19: Recruitment methods used in last 12 months Berkshire England Placed adverts on their website to recruit 33% 29% Placed adverts on social media to recruit 30% 24% Paid someone to place adverts on their website or social media 6% 5% Used some other form of paid-for recruitment service *31% 24% Used a government recruitment service or scheme 21% 20% Used school, college or university job fairs or careers services 10% 10% Relied on word of mouth or personal recommendations 50% 42% Source: Employer Perspective Survey, 2016, UK Commission for Employment and Skills *statistically significant difference with the England average Recruiting from overseas Berkshire firms are more likely than average to recruit from overseas to fill skills gaps (18% doing so versus 10% nationally) (table 16). As one firm who participated in our 2017 Berkshire Skills Survey stated: We have no problem recruiting, but we do have a problem recruiting people from this area and country we re relying more and more on European and overseas skills for the STEM subjects than growing our own at home % of our applicants are from overseas, some of whom have studied in the UK. However, recruiting from overseas costs a lot more and takes a lot longer with visa processing. Large tech firm 79

80 Employers looking to recruit from overseas can use various routes. Most skilled jobs need to be advertised to residents of the European Economic Area (EEA) for a set period before they can be offered to someone from another country. The exception is if the job an employer is trying to fill is listed on the government s shortage occupation list Cost of housing The cost of housing is frequently mentioned by employers as a barrier to attracting skilled applicants (particularly teachers, health workers, engineers and lecturers) to Berkshire. The figures bear this out. The ratio of average house prices to average gross annual earnings has increase substantially over the last five years, and Berkshire has some of the most unaffordable housing in the country (particularly within the Windsor and Maidenhead, Bracknell and Wokingham local authority areas) (table 20). Table 20: Ratio of median house price to median gross annual (where available) residence-based earnings by local authority district, England and Wales, 2002 to Local Authority Rank (out of 346) Windsor and Maidenhead Bracknell Forest Wokingham Slough West Berkshire Reading Source: ONS, 2016 The high cost of housing puts people off living (and therefore working) in the Berkshire area Large life sciences employer There is a fine balancing act "employable" people already have a job. To address skills shortages would require new people to live in Berkshire but the infrastructure (housing and roads) is not able to support new homes yet Small digital technologies employer With Crossrail, it s likely that the local area will become more expensive as travel to London gets easier. We are in danger of pricing key public services workers out of the market. School employer We are hearing more and more from businesses that, even when they can recruit, the cost of housing is causing real issues, higher skilled roles being no exception. We can, in theory, put more resources into developing low skills and finding strong local talent for many sectoral jobs that are out there, but [it s] not so easy when we re trying to [attract] engineers, researchers and linguists to the area. Reading UK CIC, Skills Shortage Call for Evidence

81 6.1.3 Immediate skills / human resource need: Recruit new entrant Education leavers Employers can recruit and develop education leavers via a formal onboarding programme, such as graduate training schemes, Apprenticeships or internships, or more informally, by investing staff time to train them on-the-job. Young people in England are required to stay in full-time education, start an Apprenticeship or Traineeship or spend 20 hours a week working or volunteering whilst in part-time education or training until the age of 18. Consequently, very few young people enter the labour market before the age of 18. Data from the Department for Education shows that post Key Stage 4 (Year 11), 55% of young people at state-funded schools in Berkshire enter a school sixth form (considerably above the national average of 38%) and 26% enter a Further Education college or study with another FE provider (below the national average again 38%). The is due to the structure of the education system in Berkshire where school sixth forms are more prevalent than nationally. Around 4% enter Apprenticeships and around 3% enter employment. Overall, 96% enter a sustained education or employment /training destination, leaving in the region of nearly 500 young people who do not. After Key Stage 5 (on completion of A-levels or other Level 3 qualifications), 54% of Berkshire s leavers go onto study at a Higher Education Institute, slightly above the national average of 51%. 18% enter employment (below the national average of 23%) and 6% enter Apprenticeships (national average 7%). The largest influx of young people into the Berkshire labour market is on graduation from higher education. 81

82 Figure 24: Destination at end of Key Stage 4 in the 2014/15 academic year (Year 11, GCSE or equivalent) 4% 3% 3% 2% 1% Figure 25: Destination at end of Key Stage 5 in the 2014/15 academic year (These are students aged 16 to 18 who have entered A levels or other level 3 qualifications) 3% 2% 6% 6% 6% 55% 11% 26% 54% 18% School sixth form - state funded FE college or FE provider Sixth form college Apprenticeships Destination not sustained Sustained employment or training Other education Activity not captured Higher Education Institute Sustained employment (non Apprenticeship) FE college or other FE provider Destination not sustained Apprenticeships Activity not captured Other education Source: DfE, 2015/16 destinations for the 2014/15 cohort (state-funded mainstream and special schools) The main provider of Higher Education in Thames Valley Berkshire is the University of Reading. The University had approximately 3,700 undergraduate entrants in 2014/15. The second largest provider is the University of West London. This is primarily its Berkshire Institute for Health campus in Reading which delivers nursing and midwifery programmes. Berkshire s five Further Education or Specialist Education Colleges also provide Higher Education courses particularly in the subject areas of Engineering and Technology; Education; Agriculture and related, Computer Science and Teacher Training (figure 26). 82

83 Figure 26: Number of undergraduate entrants by subject area and institution, 2014/ The University of Reading The Berkshire College of Agriculture (BCA) East Berkshire College The University of West London Bracknell and Wokingham College Newbury College QA Limited Source: HEFCE, Higher Education and Local Growth, 2015 ( Note: Count of students is full-person equivalents (definition here: In terms of graduates, around 46% of graduates who grew up in Berkshire gained employment in Berkshire on graduating, the majority of whom left the area to study and returned to work (figure 27). This is a lower proportion than the national average and a lower proportion than in two of Berkshire s neighbouring LEP areas of Oxfordshire and Solent. However, the proportion who left the area to study and returned for employment (41%) is largest of all LEP areas in England, which is likely a reflection of plentiful graduate opportunities in the local economy, along with quality of life factors. 83

84 Figure 27: Proportion of graduates who grew up in a LEP area who stayed or left for study or employment National 29.3% 30.4% Solent 29.7% 25.1% Oxfordshire 12.6% 35.1% TVB 5.0% 41.0% Swindon and Wiltshire 4.8% 36.6% Enterprise M3 8.4% 30.8% Buckinghamshire TV 6.2% 25.1% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Stay for study and employment Leave for Study, do not return Leave for study, return for employment Stay for study, leave for employment Source: Student Geographical Mobility, HEFCE, 2017 Approximately 90% of graduates entering the Berkshire labour market between 2010 and 2014 studied outside of Berkshire, and 10% within the area (most likely at the University of Reading). The most common degrees of graduates who found employment in Berkshire were: Business and Administration Humanities Languages The three subjects in which graduates were most likely to have stayed in Berkshire to study were: Education Agriculture and Forestry Pharmacology, Toxicology and Pharmacy The overall number of people studying the latter two was low. These are all subject areas in which the University of Reading specialises (figure 28). Of those graduates who studied in Berkshire, 24% stayed in the area for employment, slightly below the average of the surrounding LEP areas, and 28% found employment in London, again, slightly below average when compared to surrounding LEP areas (excluding Swindon and Wiltshire to the west). London appears to have the greatest pull for students who studied in Oxford, Buckinghamshire Thames Valley and Enterprise M3. 84

85 Figure 28: Proportion of graduates employed in Berkshire who studied in Berkshire versus elsewhere by subject studied 100% 90% 11% 9% 18% 25% 26% 0% 13% 12% 0% 14% 15% 9% 32% 10% 5% 9% 7% 17% 4% % % 60% % 40% % 20% % 0% 0 Studied elsewhere Studied in LEP area Volume Source: Student Geographical Mobility, HEFCE, 2017 Figure 29: Move to London for work versus stay in area where studied 60% 50% 51% 40% 30% 20% 37% 23% 24% 32% 36% 30% 28% 24% 29% 21% 10% 6% 0% Oxfordshire Buckinghamshire TV Enterprise M3 Thames Valley Berkshire Solent Swindon and Wiltshire Studied and employed in LEP area Studied in LEP area, employment in London Source: Student Geographical Mobility, HEFCE, 2017 Post-16 Education and Training is Further Education (below degree level) learning delivered mainly in a classroom, workshop, or through distance or e-learning. The main providers of Education and 85

86 Training in Berkshire are the four Further Education colleges of East Berkshire, Newbury, Reading (Activate Learning), Bracknell and Wokingham and the Specialist Education college of BCA (Berkshire College of Agriculture). Since 2011/12, the number of courses started by year olds has dropped (from about 28,400 to 19,700) whilst the number started by over 25s increased to 2013/14 and has since dropped considerably (table 22). The greatest drop has been in the number of preparation for life and work courses started. This includes entry level English and Maths Table 22: Education and training course starts with Berkshire providers Age 2011/ / / / /16 Under ,400 28,700 21,500 21,500 19, ,700 10,700 9,100 8,900 6, ,500 25,300 27,900 27,700 17,460 Source: Data Cube Table 23: Education and training course starts by subject are 2014/ /16 Preparation for Life and Work 26,300 16,300 Languages, Literature and Culture 3,900 4,700 Science and Mathematics (STEM) 3,700 4,800 Arts, Media and Publishing 3,600 3,000 Health, Public Services and Care 3,500 2,800 Construction, Planning and the Built Environment 3,000 2,600 Business, Administration and Law 2,600 2,100 Engineering and Manufacturing Technologies (STEM) 2,500 1,800 Information and Communication Technology (STEM) 2,100 1,400 Retail and Commercial Enterprise 2,000 1,400 Leisure, Travel and Tourism 1,000 1,200 Agriculture, Horticulture and Animal Care History, Philosophy and Theology Social Sciences Education and Training Source: Data Cube 86

87 Apprenticeships In the previous section we discussed how employers are using (or plan to use) Apprenticeships to develop their existing staff. In this section we report on how employers are using Apprenticeships to take on and develop new recruits. Before doing so, some context: Berkshire employers are less likely to take on apprentices than employers in the rest of the county and there continues to be low awareness of what Apprenticeships involve. Only 6% of workplaces in Berkshire have an apprentice, compared with 12% nationally, and a smaller proportion of workplaces in Berkshire have apprentices than in the surrounding LEP areas. Only 35% of employers in Berkshire are aware of Apprenticeships, compared with 46% nationally. The number of people starting Apprenticeships in Berkshire is falling. There was a 6% decline in Apprenticeship starts between 2014/15 and 2015/16 in Berkshire versus a 2% increase across England as a whole. The decline in Apprenticeship starts over the last 12 months is concentrated in the older age group (19 plus) and at Level 2. West Berkshire experienced a particularly large drop. Whilst most of those starting Apprenticeships in TVB are undertaking Intermediate Apprenticeships (Level 2), there is higher take-up of Level 3 Apprenticeships in Berkshire than nationally. In 2015/16, Berkshire had one of the lowest Apprenticeship achievement rates in the country. 64.7% compared with the national average of 67.0%. Apprenticeship achievement rates have declined in the last 12 months in Berkshire, although this could be related to the reduced delivery by the British Army in the region (who had high achievement rates). The top three sectors in which Berkshire residents started Apprenticeships in 2015/16 were: Business, Admin & Law; Health, Public Service & Care; Retail & Commercial Enterprise. Starts in ICT, whilst comparatively low in relation to other subject areas, are higher than the national average and are increasing. 84% of those undertaking STEM apprenticeships are male Two thirds of Apprenticeship starts in 2015/16 were with Private Sector Public Funded training providers. A quarter were with General FE and Tertiary Colleges. Lifetime Training Group Limited was the largest provider of Apprenticeship training to Berkshire residents in 2015/16. In terms employers taking on new apprentices, local insight suggests that Berkshire employers receive far fewer applications for Apprenticeship vacancies than for entry level graduate vacancies. On average, there are only four applicants per Apprenticeship vacancy in Berkshire. 31% of Berkshire residents starting Apprenticeships in 2015/16 were aged 16-18, up from 28% the previous year (table 24). These are likely to be new recruits rather than existing employees. 87

88 Table 24. Apprenticeship starts by age Bracknell Forest 31% 31% 39% Reading 37% 29% 42% Slough 28% 29% 47% West Berkshire 47% 35% 30% Windsor and Maidenhead 25% 33% 38% Wokingham 36% 35% 29% TVB total 31% 32% 38% England 26% 30% 44% Source: ESFA Apprenticeship Start Data 2015/ Widening the recruitment pool A further option for employers wishing to take on a new entrant (someone without previous experience in the role) and develop them within the organisation is to widen their recruitment net to include groups that they may not traditionally have targeted. For example, women with STEM qualifications looking to return to work after having children might be targeted for tech roles, despite not previously having experience. Experienced individuals over the age of 50, or people with additional needs, might also be targeted. [There needs to be] much greater encouragement for girls to enter tech careers. Look at any technology course and it s predominantly male. They are over 50% of the population. Equal pay for women in tech. There is still a shortfall. Female role models in tech. Make it aspirational Training provider Figure 30: Proportion of employers who have recruited who have recruited from different age groups over last 12 months Recruited anyone aged % 36% Recruited any young person 56% 66% 0% 10% 20% 30% 40% 50% 60% 70% England TVB Source: Employer Perspectives Survey, 2016, UK Commission for Employment and Skills 88

89 6.1.4 Developing a medium-long term pipeline There are a number of ways in which employers help ensure they have a medium-long term supply of future talent, including: Offering work experience to young people Offering other types of work inspiration Developing closer relationships with local schools, colleges and universities Involvement with local and / or national careers initiatives Contributing to the development of qualifications or Apprenticeships Enabling staff to volunteer within schools and colleges In terms of the former, 39% of Berkshire employers offer work experience, and one in 10 offer other types of work inspiration. These figures are more or less in line with the national average. Figure 31: Proportion of employers offering work inspiration or experience in last 12 months Offered any work inspiration 10% 9% Had anyone in on work experience 38% 39% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% England TVB Source: Employer Perspectives Survey 2016, UK Commission for Employment and Skills The University of Reading provides a number of work placement opportunities for undergraduates and local employers. These include: Professional placement years Shorter summer placements / internships (3 months) SME internships (6-8 week internships with employers with less than 250 staff, where grants are available to Small and Medium Sized Enterprises to support salary costs) 89

90 6.2 Community learning provision Community learning funds a wide range of non-formal courses, ranging from personal development through to older people s learning, IT courses, employability skills, family learning and activities to promote civic engagement and community development. Courses may be offered by local authorities, colleges, voluntary and community groups, and include activities specifically targeted at deprived areas and disadvantaged groups. The largest providers of community learning in Berkshire are: Slough Borough Council; Bracknell and Wokingham College; West Berkshire Council; Bracknell Forest Council; Reading Borough Council and Wokingham Borough Council. In 2014/15 the number of community learning courses started in Berkshire dropped by about 20% (table 24). This was mainly in the over 25s age group. The figure rose by 7% in 2015/16. Table 25: Community learning course starts by age 2011/ / / / / ,200 1,200 1,300 1,100 1, ,300 19,300 21,000 16,800 18,000 Total 20,500 20,500 22,300 17,900 19,100 Source: ESFA Data Cube Preparation for Life and Work and Arts, Media and Publishing courses were the most popular community learning courses in Berkshire in 2015/16. Table 26: Community learning starts by subject area, 2015/16 Starts Preparation for Life and Work 6,000 Arts, Media and Publishing 4,300 Languages, Literature and Culture 2,000 Health, Public Services and Care 2,000 Information and Communication Technology 1,900 Leisure, Travel and Tourism 1,100 History, Philosophy and Theology 500 Retail and Commercial Enterprise 400 Agriculture, Horticulture and Animal Care 300 Construction, Planning and the Built environment 200 Engineering and Manufacturing Technologies 100 Business, Administration and Law 100 Education and Training 100 Source: ESFA Data Cube (figures rounded to nearest 100) 90

91 7 Developing responses to address mismatch between demand for and supply of skills 7.1 Overview When trying to establish areas of market failure within the skills system, and therefore where interventions should take place and investment prioritised, the evidence presented in this report is a starting point. It highlights some areas of potential mismatch between the supply of and the demand for skills, along with wider areas in which the skills system could be improved. However, in reality, what looks straight forward on paper, is likely to be much more complex in reality. Therefore, robust market testing of new initiatives, and strong commitment between partners, is required to ensure success. Below are some examples of how what seems like a straightforward solution to a problem is difficult to implement in practice. 7.2 Government funding to improve skills We consulted Berkshire employers to gather views on where they felt public resources should be targeted to improve skills across Berkshire. The top responses (in order) were: Making changes to the skills system (many responses relating to Apprenticeships) Improving employer / learning provider relationships Schools / basic education Careers guidance Addressing the cost of living in Berkshire Improving supply of people in skills shortage areas Improving supply of people with STEM skills Improving incentives for teachers and lecturers Work-readiness training Work experience Funding for bespoke training not currently funded Diversity Apprenticeships Increased funding for colleges 91

92 A selection of comments is below. System change Put the bargaining power and design of apprenticeship programmes in the hands of the employers not the training providers, who are focused on income. At present the 'tail is wagging the dog' Dedicated budget for adult skills at levels/qualifications relevant to employment/business rather than arbitrary minimum levels. Incentivise delivery/creation of programmes needed by employers and linked to actual vacancy ratios Retraining bonuses for key skills shortage sectors Get pupils and students to learn broader skills and specialise later, rather than specialising too early Government funding should be allocated to specific areas of skill shortage and made accessible Providing as much flexibility as possible in how employers can use the apprenticeship levy, including divesting significant proportions to their supply chain They should promote apprenticeship schemes, include technology in the P8 and A8 school performance measures and widen the curriculum Include 'place' in the funding assessment Investment in startups, start-up hubs and the business community. Add a training program which feed into that ecosystem. Invest in new companies as it is so hard for startups to get investment in the UK. Focus on bringing investment and VC's to the region Companies that require training should be able to offer rooms etc for free or contribute in some way. It should be a partnership between government and business Improving employer / learning provider relationships Support local businesses to develop partnerships with local training providers to be able to train people in specialist areas Careers guidance The move away from creating multiple organisations to deliver careers advice, but create a single entity with several branches that are capable of delivering the same high quality service, with the benefits of scale A universal and high quality careers advice service, so that everyone has the same access to this from the age of 14+, as school children select the GCSE subjects Selling the benefit and needs in certain sectors to attract students in to the industry Cost of living Government funding needs to help people with living costs, as the local area is expensive, and it is difficult to attract people into the area to work Invest to ensure that the area/environment is attractive - environment, services, vibrancy and cultural opportunities, including affordable accommodation and cost of living. This is fundamental to attracting, growing and keeping talent 92

93 Improving supply of people in skills shortage areas Focus on application of computer sciences skills to real industrial needs Offer additional training in cooking, tourism and hospitality for people looking to start and change careers Improve STEM take-up Improving incentives for teachers and lecturers Improving teacher pay, standing within the community and removing policies that divide education More incentives should be offered by Government to experienced and skilled people to help train up the future workforce Work experience Incentivise organisations to take in work experience students earlier (12-14), to give them a taste of work life and experience different roles Bring back sandwich university courses that implement work placement for a year, which may lead to permanent employment or specialisation Work-readiness training Integration into the workplace. Time management. Transition into work. Money management. More focus and time spent from the trainers on an on-going basis. The Challenge programme run by the NCS during holidays is potentially a very helpful experience for students, perhaps more could be done to extend this programme as it caters for a wide range of skills Funding for bespoke training A comprehensive strategy re apprenticeships e.g. funding for apprenticeships not covered by the levy. Often employers need to undertake bespoke and expensive training to address skills gaps, assistance from government would help employers to fill gaps more quickly and strategically Identified funding for short courses/cpe would be helpful Other Better basic education in secondary schools increasing skills in maths, English and general literacy Retraining older workforce More Apprenticeships 93

94 7.3 Closing the tech skills gap Employers who responded to the digital tech questions within the 2017 Berkshire Skills Survey were asked what they thought would have greatest impact in terms of improving their ability to recruit tech staff. The top responses are set out in figure 32 below. Figure 32: Actions employers believe will have greatest impact in terms of closing the tech skills gap Improving tech education in schools / more young people taking tech subjects Improving / raising awareness of digital tech apprenticeships / more people taking apprenticeships Improved awareness of tech careers amongst young people Increased support for careers changers / returners to work developing a digital tech careers Greater collaboration between large tech firms and SMEs Greater range of tech training provision locally Improving tech education at universities / more people taking tech degrees Increased numbers undertaking industry-certifications Other (please specify) Easy to recruit tech talent from overseas Source: 2017 Berkshire Skills Survey, Thames Valley Berkshire LEP Employers were asked what they thought should be improved within schools / colleges, the Apprenticeship system and at Universities to improve the tech talent pipeline (table 27). Table 27: What should change within schools, colleges, Apprenticeships and Universities to address tech skills shortages Schools / colleges Apprenticeships Universities Promote Apprenticeships Promote tech careers Improved quality of tech teaching Improved relevance of GCSE / A-level computing curriculum to tech careers Improved relevance of digital tech Apprenticeships to tech careers Improved quality of training More local providers offering tech Apprenticeships Increased numbers taking digital tech degree Apprenticeships Stronger relationships with local tech firms Improved relevance of computer science and tech degrees to tech careers 94

95 7.4 Use of local learning provision Before reviewing what learning provision appears to be lacking locally, and therefore suggesting areas in which provision should be developed, it is useful to review the extent to which employers are currently using local publicly funded training providers, particularly Independent Training Providers (ITPs) and colleges. Currently, approximately 40% of Berkshire employers are using local training providers (either an ITP or college) to deliver their Apprenticeship training, the remainder are using national providers or providers located in other parts of the country. Around 50% of individuals living in Berkshire undertaking Education Skills Funding Agency (ESFA) funded education and training are doing so with a Berkshire learning provider and nearly 90% of those undertaking community learning are doing so. Some of this is likely due to distance. An individual might live closer to a college just outside of Berkshire for example than one within the borders. It could also be due to historic relationships with specialist providers or be due to the sub-contracting arrangements providers can have, whereby the main provider is located elsewhere in the country, but training is delivered by a third party in the locality. Some employers and individuals, however, using non-berkshire providers are likely to prefer there to be high quality local provision available, to reduce costs. Respondents to the 2017 Berkshire Skills Survey were asked whether they thought that an increase or improvement in local training provision would help reduce skills shortages within the local economy. The majority (60%) felt it would, but a sizeable minority were either unsure or felt it wouldn t have an impact. Those who felt that local provision should be improved / increased felt it should be done so in the following ways: More aligned with needs of economy Greater links to the world of work Increased employer involvement in designing courses More short courses Widen Apprenticeship provision Provide more employability training A sample of comments are provided overleaf. 95

96 [Berkshire needs] a good local technical college teaching traditional engineering skills along with new technology such as robotics and additive manufacturing [Local businesses need more] support in coaching and managing the performance of employees [We need] training provision/facilities for technical skills at L3 and above. Encouraging collaborative provision so smaller firms can combine to fill cohorts. Greater exposure to industry - at school and college level. Open eyes to opportunities that exist further up the ladder. Links with education to offer job placements with local companies that would foster future apprenticeship interest. Better careers advice and support from the local training provision and schools - identifying all the options with pros & cons for each career pathway. Work more closely with employers to define the skills needed in current employment Offering recognised professional qualifications or training schemes at an affordable cost to small and medium companies Basic courses on telephone manner, customer care, social interaction followed by learning how to take a message (phone numbers, name, reason for call). Administration skills. Learning to type and how to use Microsoft Office. Schools could possibly do more to prepare the 'mind set' of leavers so they are more prepared for working life and have more realistic expectations/better work ethics. 96

97 The main reasons why respondents felt that improving local training provision wouldn t have an impact were: Skills shortages are in occupations for which the recruitment pool is national (and therefore addressing shortages requires a national rather than local solution) Skills shortages need addressing by improving in-house training The issue is a lack of people applying for roles, not the quality of the training they have received The issue is work ethic not skills It is unlikely that local provision can be improve to the extent that it needs to be A sample of comments are provided below. The skills that are lacking are from bottom to top. Local training would help with the bottom part, but you need to have a long-term plan to improve the top people. For the roles we recruit to, we're looking at a graduate pool that is in high demand. However, creating interest in these types of roles earlier in the education cycle would help to address the issue in the longer term. If we don't address the issue, it is likely to get worse. We tend to recruit from a UK wide / international pool, so I'm not sure that local training would significantly enhance calibre of applicants Reading is pretty much at full employment and most people without jobs do not have a work ethic that would enable them to retain employment Depends on what can be provided by local training provision as currently [our company] is being supported outside of the local training provision. The training would need to be of good quality. Some trainers locally are very poor. 97

98 7.5 Gaps in local learning provision In 2016, as part of the Thames Valley Area Review of Post-16 Education and Training, Thames Valley Berkshire LEP brought together data and intelligence from a number of sources to make an assessment of where there were gaps in the supply of education and training for mid-skilled occupations (generally speaking Level 2, 3 and 4). The aim being to identify where local providers could develop or increase provision to help ease skills gaps and ultimately stimulate local economic growth. This assessment drew on analysis undertaken by the Centre for Progressive Capitalism and qualitative intelligence gather locally. The two main subject areas in which both the data analysis and qualitative intelligence align to suggest an increase in local Level 3 provision is required are: Engineering and Construction. A third key area is Digital Technologies. Whilst employers tend to currently prefer to recruit graduates into mid-skilled tech roles, with growing demand and skills shortages, and dissatisfaction with computer science degrees, there appears to be an opportunity to develop alternative, non-degree level, provision. Other areas in which the data suggests there is an undersupply of Level 3 skills provision in occupations are: health, care and welfare; and hospitality (predominately chefs) Note, some local growth sectors (e.g. logistics), key skills shortage roles (software developers) and potential specialist niches (e.g. life sciences lab technicians) haven t emerged as under supply occupations in the Level 3/mid-skill supply and demand mapping, but the growth potential of these sectors/occupations coupled with existing skills shortages suggest they are also worth considering in terms of developing/growing provision. More recent mapping undertaken by the Centre for Progressive Policy 25 identified a potential undersupply of publicly funded training for engineers, electricians and IT technicians in Berkshire. 25 The Data Deficit: Why a lack of information undermines the UK skills system, March

99 7.6 Institute of Technology In 2017 an independent telephone survey1 of 150 STEM employers based in Thames Valley Berkshire found that the vast majority (84%) would welcome an Institute of Technology that responded to employer demand and helped address their skills needs now and in the future. Some comments provided are below. [Focus should be] definitely around the tech skills there s a major gap in terms of the skills, the supply and demand. Supply issues are accentuated due to the large number of Tech companies in the area: we have a significant number of enquiries from employers for placements for graduates and to meet those skill gaps. University of Reading There needs to be a focus on enterprise skills alongside tech skills to help people start tech businesses (at all ages and from all demographics - we can't just leave this to universities particularly Russell Group type ones) and there needs to be investment in the business support ecosystem (including incubation space) to enable start up and growth phases It would be good to have an institution that is focused on STEM and to have all the relevant courses in one institution, which need to have closer ties to industry Employer, small business Predominantly, if you want to deliver higher level technical education the gap is the link to the industry in the area. Large Employer, Engineering Tech Skills should not be taught in isolation; technical people still need to communicate well in written English Its focus should be the same as Reading UTC Large Digital Tech Employer Its focus should be Skills that make UK money - digital - advanced manufacturing- advanced engineering. The interfaces between technology and society. All areas where there are long term job opportunities that attract investment from UK and overseas and offer job opportunities Large Engineering Employer 99

100 The types of skills that employers felt should be developed by an Institute of Technology are set out in figure 33 below. Figure 33: Employer demand from a local Institute of Technology 100