Scottish Employer Perspectives Survey 2019: research report

7. Conclusions

The inaugural Scottish Employer Perspectives survey spoke to 2,652 Scottish employers gaining valuable insight into their approach to recruitment and training, and their use and engagement with the skills system. 

The survey was undertaken during both a time of economic growth and relative stability within Scotland. However, it was also a time of uncertainty with a lack of clarity around Brexit and future trading arrangements and supply of labour from the EU. Against this backdrop, it is more important than ever to have good labour market intelligence. Evolving from the UK Employer Perspectives Survey, the 2019 Scottish survey continues a long-timeseries for key measures that stretches back biennially to 2010. Long-term series such as the EPS can serve as a key tool in understanding the skills challenges faced by employers, their responses and potential areas of support. 

The robust and reliable labour market information provided by this research gives a rich evidence base to inform strategic and operational decision making at the national, regional, sectoral and local level. It supports the Scottish Labour Market Strategy, which sets out the desire to create an inclusive labour market with high employment, met through measures which support employability and skills. 

This years’ survey also contains new areas, reflecting more recent policy interests in Scotland including equality and diversity in recruitment practices, and awareness and engagement with the Developing the Young Workforce (DYW) Regional Groups. 

This years’ survey considers: 

• How employers recruit new staff, including equality and diversity in recruitment; 
• Their perceptions of new recruits (including young people and education leavers); 
• Employers engagement with training providers and Developing the Young Workforce (DYW) regional groups; and 
• Their offering of work placements and apprenticeships.

In this concluding section we bring together the findings of each section to consider the implications for those involved in helping employers improve their recruitment, training and people development.

Entry to Work

The EPS creates an evidence base for employer recruitment practices, employer attitudes and actions. The data collected supports the Scottish Government’s aim of achieving an inclusive labour market with high employment and assisting those furthest from the labour market and those facing specific barriers. 

Around half of employers had been active in the labour market, having had at least one vacancy in the 12 months preceding the EPS, similar to levels in 2016. The study concluded: 

• Most employers who had recruited in the 12 months prior to the survey had used multiple recruitment methods, only one in five had used a single channel to access candidates;
• However, word of mouth or personal recommendation was the most commonly used approach by employers with a vacancy used by almost four out of five employers, and other internal resources such as their own social media or website were also commonly used; and
• Relevant work experience remains the attribute most commonly sought by employers in candidates for job roles, with three in five employers rating it ‘significant’ or ‘critical’. 

Such search strategies are likely to disproportionately impact the people furthest from the labour market (such as the long term unemployed), as it limits the range of applicants employers receive but also excludes potential candidates who do not have the contacts or connections to find out about these vacancies. The more widely employers search for applicants, the more likely they are to increase the number, quality and diversity of applicants and find appropriately skilled workers. The research found that: 

• Actions to diversify their workforce through good recruitment practices when reviewing applications were relatively rare;
• Although almost half of employers who had had a vacancy had advertised a role that would be suited to flexible working, just one in eight had used “positive action”, where a candidate with a specific protected characteristic is chosen over other equally qualified candidates because that characteristic is under-represented in the workplace, and one in twelve had used “blind” or “no name recruitment”, where irrelevant information such as names are left off CVs to avoid unconscious bias;
• The majority of employers who had had a vacancy could not identify any specific action they had taken to attract and encourage a diverse range of applicants;
• However, encouragingly, half of employers who had had a vacancy in the 12-month preceding the study collected information to monitor the diversity of applicants, rising to over three-quarters of employers with 100 or more employees; and
• Finally, three-quarters of employers were aware of the new gender pay gap legislation, however only a minority of employers aware of the legislation had changed their recruitment practices as a result. 

Whilst good recruitment practices in terms of equality and diversity are not mandatory for most employers, supporting and encouraging employers to use them could help the Scottish Government achieve its aim of improving inclusivity in the labour market and reducing inequality.

In addition to considering how employers recruit and what they look for in applicants, the EPS has also examined who employers are recruiting with regards to older workers, young people and education leavers. The study concluded: 

• Recruitment of older workers has increased. Around two in five employers who had recruited in the year preceding the study had recruited an older person, defined as aged 50 or over, an increase from 2016;
• Employers who monitor the diversity of their applicants, use positive action, blind recruitment, offer flexible posts and / or encourage a diverse range of applicants are all more likely to have recruited an older person than their counterparts who have not adopted these recruitment practices; and
• Whereas recruitment of older workers has increased, recruitment of young people has decreased, however overall employers are still more likely to have recruited a young person under the age of 25 than an older person over the age of 50.

These trends have occurred against a backdrop of relatively high youth employment levels, suggesting perhaps fewer young people were seeking employment in 2019, as fewer were unemployed, and thus employers had a smaller pool of young candidates applying for roles. It also suggest that ‘good recruitment practices’ as identified above may help to improve the diversity of the workforce by opening up opportunities for older workers.

Turning to look specifically at leavers from education, DYW set a target of 35% for the proportion of employers recruiting young people directly from education in 2018. A key issue for employers, education providers and policy-makers is also that these leavers are well-prepared. The survey found that: 

• In the 2-3 years preceding 2019 survey, just under a third of employers had recruited an employee to their first job after leaving a Scottish school, college or university;
• The proportion of establishments recruiting from schools (20%) and colleges (12%) was broadly unchanged from 2016 but the proportion recruiting university leavers has decreased from 14% in 2016 to 11% in 2019;
• Overall, the majority of employers find their education leavers to be well prepared, and this level of preparedness increases with the level of educational attainment; and
• However, employers were less positive about work preparedness than they were in 2016, and the proportion who felt leavers were poorly or very poorly prepared for work rose between five and six percentage points for each type of leaver.

The fall in recruitment of university leavers may warrant further investigation in order to meet the Scottish Government’s key performance indicator from DYW of 35% of employers recruiting young people directly from education. Similarly, employers less positive views on work preparadness (which were most commonly a result of a lack of experience of the working world, lack of life experience and lack of maturity) may also benefit from further in-depth follow up. 

Supporting Entry to Work

The survey has shown that employers place a high value on work experience when recruiting new staff. However in order for work experience to challenge barriers to entry to work, opportunities for this experience need to be open to a broad range of individuals. 

A key aim of the 21 DYW Regional Groups are that employers work with schools and colleges to provide more young people with a labour market-relevant range of work-based learning opportunities, including work placements, mentoring and interview skills training. The DYW programme has been in place since 2014 and runs until 2021 working to foster partnerships between local industry and employers, and education. For the first time this year the EPS survey asked employers about DYW Regional Groups, alongside questions from 2016 on work experience, placements and work inspiration, finding that:  

• Around one in seven employers were aware of their DYW Regional Group and a fifth of those who were aware had engaged with them over the previous 12 months. Larger employers were more likely to be aware of and to have engaged with their Regional Group;
• Despite the majority of employers saying relevant work experience was ‘critical’ or ‘significant’ when evaluating candidates in the recruitment process, fewer than two in five employers had themselves provided any type of work placement in the 12 months prior to the survey, and this had fallen since 2016;
• However, although the proportion of employers offering work placements in Scotland has decreased, those who do so are offering them to more individuals. Almost 333,000 placements were offered to individuals by employers, an increase from just under 315,000 in 2016; and
• Around one in seven employers had engaged with schools, colleges or universities in the 12 months preceding the survey to conduct ‘work inspiration’ activities.^[29]

Both work experience and work inspiration activities were more common among larger employers, and among those in the public sector. Aside from the importance employers themselves placed on work experience when recruiting, placements themselves were often used by employers as a recruitment route, with over a third of employers who provided work experience going on to recruit the trainee to a permanent or long term paid role. 

Key to improving the provision of work experience opportunities will be overcoming the barriers that employers cite for not offering it. The majority who do not offer such opportunities cite structural reasons - such as not having suitable roles, or lacking the time or resources to do so. This perhaps highlights a key support role for the DYW Regional Groups in helping to break down these barriers to work experience provision. Indeed, the survey found that employers who had engaged with their local DYW Regional Group were more likely to have offered any work experience, or work inspiration activities.

People Development

Within Scotland there is an increased focus on alignment and co-operation between the skills and enterprise agencies, as outlined in the 2018 Enterprise and Skills Board Strategic Plan (Scottish Government, 2018a). The Scottish EPS 2019 considered how employers are meeting their training requirements, the type of provider they access, their use of vocational qualifications and their involvement in shaping the training they give to staff. The 2019 survey concluded: 

• Around seven in ten employers had provided training to their staff in the 12 months preceding the survey, a slight decrease from 2016. The reduction in training was concentrated on just the smallest employers (those with 2-4 staff);
• Employers were more likely to offer internal training than external training. Among those who did offer external training, private training providers were most common, consistent with 2016;
• Despite a decrease in the proportion of employers offering training to their employees, the proportion of employers that had arranged or funded training designed to lead to a recognised vocational qualification in the last 12 months has increased; and
• In addition, training to higher level vocational qualifications (SCQF Level 6 or above) was more common than to lower level qualifications.

As such, although the quantity of training has declined, training quality has risen - with a greater proportion of employers training to qualifications and at higher levels. Those employers who had trained to vocational qualifications viewed them positively, with the vast majority believing they lead to better business performance, can be adapted to business needs, and improve staff retention. Given the benefits that employers who engage with vocational qualifications cite, it is worth considering the reasons why employers do not engage and how these barriers can be broken down, the most common reason employers cited for not providing vocational qualifications was that they did not know enough about what qualifications were available. 

Encouraging employers to get involved with or provide input into the design or content of training helps ensure that the training employers provide to staff meets their needs. Overall 44% of employers who had provided training towards vocational qualifications for staff had had some level of involvement in determining the design or content of the training. Among those who were not involved, 18% said they would have liked to have been. The most common reason for not being involved was that they did not know they could or had not been given the opportunity, but many also said they felt it was too much time and effort to do so or that the provider was not open to their involvement.

Considering how training provision can be increased among employers is a key question for policy makers. Encouraging employers to work together is just one approach to increasing training provision for the workforce, through shared resources to fund courses or through working collaboratively to develop training policies or programmes for the industry or region. Overall, 14% of employers had collaborated with other employers in this way. Such employer collaboration was more common in larger employers and among the public and voluntary sectors. DYW Regional Groups encourage employers to work together in this way; and collaboration was more common among employers who had engaged with their local DYW Regional Group.

Apprenticeships

The Scottish Government has a target to increase Modern Apprenticeships (MA) new starts to 30,000 by 2020. Apprenticeships in Scotland allow individuals to work whilst gaining an industry-recognised qualification, and allow employers to develop their workforce through training new staff and upskilling existing employees. Apprenticeships are a well recognised among employers in Scotland, with awareness of them high even among those not offering them, almost four in five employers not offering apprenticeships reported they had some knowledge of what was involved. 

Foundation Apprenticeships (FA), which were first introduced in 2014 to provide work-based learning opportunities for senior phase secondary school pupils, and Graduate Apprenticeships (GAs) introduced in 2017 to provide a new route into degree-level study, also had reasonably high levels of employer awareness despite their relatively recent introduction. Just over half of all employers were aware of GAs, and just over two-fifths were aware of FAs.

In terms of provision of apprenticeships by employers: 

• Around one in seven employers reported they were offering apprenticeships at the time of the survey. Overall the proportion offering apprenticeships remains unchanged from 2016;
• However there are key changes within certain sizebands and sectors. Most notably the proportion of employers offering apprenticeships has increased among those in the 10-24 sizeband (from 19% to 25%). There was also an increase in the Business Services sector, and a decrease in Construction;
• Around a fifth of employers offering apprenticeships had started doing so in the last three years; and
• Apprenticeships were offered mainly to new recruits rather than existing staff, however almost half of those offering apprenticeships had offered some form of work experience placement prior to offering an apprenticeship. 

The importance of work experience is again highlighted by the findings on apprenticeships, with many employers preferring to recruit apprentices that had already completed work experience with them. Overall there were high levels of satisfaction reported with apprenticeship completers, with three-quarters of employers reporting that their completers were well prepared for work (in line with the work preparadness of college and university leavers). 

With the proportion of employers offering apprenticeships remaining unchanged between 2016 and 2019, it will be important for policy makers to consider what can be done to further increase employer uptake of apprenticeships, whilst continuing to build upon the high levels of satisfaction employers have with the work preparadeness of apprenticeships completers. 

Looking ahead, around a quarter of all employers plan to offer apprenticeships in the future, the vast majority of these are those who currently offer apprenticeships and plan to continue offering them. There are however 14% of employers who don’t currently offer apprenticeships but report they plan to do so in future. Capitalising on this, as well as understanding the barriers and reasons why employers don’t offer apprenticeships may help increase numbers in the future.  Employers who do not offer apprenticeships most commonly believe them not to be suitable for employers of their size or sector. These reasons may point to a lack of awareness or knowledge among some employers as to the breadth of apprenticeship frameworks available and the ability to tailor apprenticeships to their needs.

Final thoughts

The development of the Scottish EPS 2019 sought to carefully balance the need to track change over time on some key measures, as well as developing to address key questions of interest to policy. The new questions on DYW and equalities, in particular, have the potential to serve as a valuable baseline against which policy can be assessed in future years.  

The insight that the EPS provides can be used by Government and stakeholders at the regional and sectoral level to improve initiatives designed to help individuals find work, support business growth and develop the workforce, so they better meet the needs of employers. As in the past, the survey also represents a valuable resource for identifying different types of employers to target with complimentary in-depth follow-up research to shed further insight into the findings of this research.