Scottish Employer Perspectives Survey 2019: research report

1. Introduction

Background

The Scottish Employer Perspectives Survey (EPS) captures the views of 2,650 employers in Scotland regarding their approach to recruitment and training providing robust and reliable labour market information on how employers engage with the skills system in Scotland. This includes: 

• How employers recruit new staff; 
• Their perceptions of new recruits (including young people and education leavers); 
• Their engagement with training providers; and 
• Their offering of work placements and apprenticeships.

This is the inaugural Scottish EPS, however the survey has emerged from a UK-wide EPS series which was conducted every other year starting in 2010.^[4] Thus there exists a long time-series for many of the key measures included in the Scottish EPS. The Scottish EPS sits alongside the Employer Skills Survey (ESS) which was last carried out at a UK-wide level in 2017 and focuses on employers’ skills demands, skills shortages and training within organisation.

The 2019 Scottish EPS study was conducted during a time of economic growth and relative stability for Scotland. The first quarter of 2019 was the ninth consecutive quarter of growth, with growth strongest in the Manufacturing and Construction sectors (Scottish Government, 2019a). Unemployment rates have reduced considerably since the previous wave of EPS in 2016, especially amongst young people. However, despite the strong labour market the proportion of Scottish employers with a vacancy (20%), or a skill shortage vacancy (6%) were found to have changed little in the most recent ESS study which compared the situation in summer 2017 with that two years previously (Winterbotham et al., 2018a).

Brexit uncertainty will however be affecting employers, and this may impact on changes in recruitment patterns in sectors more exposed to this uncertainty. In summer 2017 one in six Scottish employers (17%) reported that their employees would need to up-skill due to Brexit (Winterbotham et al., 2018).The overall strategic direction of Government economic policy has not shifted since the 2016 study, tackling inequality and growing the economy sustainably, as outlined in the 2015 economic strategy, remain key aims for the Scottish Government (Scottish Government, 2015). A number of other specific strategies and plans have also been published that place an inclusive labour market and a skilled population as central to economic growth.

The Labour Market Strategy (Scottish Government, 2016) goes further, setting out how the desire to create an inclusive labour market with high employment will be met through measures including support for employability and skills, especially for those furthest from the labour market, and initiatives to help those facing specific barriers (e.g. vulnerable groups and the long-term unemployed, including disabled people and minority ethnic communities). 

The Developing the Young Workforce (DYW) programme has been in place since 2014, and the Scottish EPS 2019 includes new questions focusing specifically on this policy area. The DYW programme includes 21 employer led Regional Groups, which work to foster partnerships between local industry and employers, and education. A key aim of this is 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 and training), and a broader range of post-education employment opportunities. This is part of longer term aims to establish parity of esteem between vocational and academic pathways, and to improve positive outcomes for all young people.

The regionalisation of colleges, which resulted in fewer, larger institutions is now largely embedded but there continue to be structural changes to the skills landscape, with 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 considers how Scottish employers are meeting their training requirements, the types of provider they access, their use of vocational qualifications and apprenticeships and the preparedness of leavers from education, including Further Education.  

Finally, the Scottish EPS 2019 has introduced new questions around equality and diversity relating to recruitment. All employers are subject to the requirements of the Equality Act 2010 (and so should avoid unlawful discrimination) and public sector organisations continue to be subject to the Public Sector Equality Duty, placing an obligation on them to positively promote equality across all protected characteristics (Government Equalities Office, 2013).^[5]Since the previous wave of EPS research, gender pay gap legislation has also come into force, and from 2018 most employers with 250 or more employees have been required to publish information on their gender pay gap. The survey includes questions around the awareness of the gender pay gap legislation and the extent it has impacted on behaviour - as such the EPS 2019 will provide a key benchmark against which progress can be measured in future years.

Methodological overview 

The Scottish EPS is a large-scale telephone survey of 2,650 employers in Scotland. It provides robust and reliable labour market information on how employers engage with the skills system in Scotland. This section briefly summarises the key features of the methodology adopted for the survey. Further detail can be found in the separate technical report which accompanies this research findings report. 

Sampling 

The sampling population used for the Scottish EPS encompassed establishments (defined in box 1.1 below) across the full geographical spread of Scotland, in all sectors of the economy (across the commercial, public and charitable spheres). All establishments based in Scotland with two or more people working at them were eligible for the survey – i.e. sole traders with a single person on the payroll were excluded. The 2018 Inter-Departmental Business Register (IDBR) was used as the data defining the population of employers in Scotland.

Box 1.1: Rationale for establishment-based survey

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The sampling unit was at an establishment level, by this we mean site level rather than at an organisation level. This is in recognition of the influence that local labour markets have on skill issues and the fact that skills issues are felt most acutely at the site level. This mirrored the establishment-based approach adopted in previous UK Employer Skills Surveys and UK Employer Perspectives surveys. We use the terms establishment and site interchangeably through the report. 

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The survey excluded the self-employed (with no employees), as the question approach/context for this group would need to be somewhat different, since they are by definition not “employers”. Additionally, there is an absence of robust population figures for this group, providing obstacles for robust and representative sampling and weighting. 

The sampling strategy adopted for the Scottish EPS was based on the approach taken for the most recent UK EPS in 2016.

The sampling approach taken for Scottish EPS was as follows:

• Target interviews were stratified against a two-dimensional sector by size grid (12 sectors and seven sizebands) on an interlocking basis;
• The initial allocation of interviews was done according to employer sizebands, using a set of ratios that deliberately over-sampled larger employers;
• Interviews were then allocated to sector within each sizeband in proportion to their representation within the business population; and
• The sample was then drawn from the commercial data supplier, Market Location.

Questionnaire

The UK EPS 2016 questionnaire (minus questions that were only relevant to England, Wales and Northern Ireland) was used as the basis for the Scottish EPS questionnaire. Following a review of the UK EPS 2016 questionnaire by the Research Advisory Group (RAG)^[6] for the Scottish EPS 2019, additional content was developed. The additional content was tested in the pilot stage, and retained, amended or removed accordingly.

A range of new questions were developed for the Scottish EPS, including: 

• Monitoring of equality and diversity in recruitment practices (C5a-g); 
• Awareness and impact of Gender Pay Gap legislation (C10GP-GPi);
• Awareness and use of Foundation Apprenticeships (C21-21A);
• Interactions with DYW Leads / Regional Groups (C30);
• Whether apprentices are on a Graduate Apprenticeship programme (D22Bi);
• Perceived work preparedness of modern apprentices (D34B); and
• Whether partnered with external institutions to design the content of training (D39a).

A full pilot of the questionnaire was carried out in January 2019 in order to test the new questions and to assess questionnaire length. 

The average survey length was 22 minutes, although this varied depending on the level of engagement with particular approaches and schemes. A copy of the questionnaire can be found in the Technical Report.

Survey fieldwork

Fieldwork for the survey was undertaken between February and March 2019, involving 2,650 telephone interviews using computer-assisted telephone interviewing (CATI) software. 

Interviews were conducted with the most senior person at the site being interviewed with responsibility for recruitment, human resources and workplace skills.

The survey achieved an overall response rate of 44%, in line with the response rate of 43% achieved among the Scotland sample in the UK EPS 2016. 

Data weighting

Findings from the survey have been weighted and grossed up to reflect the total population of Scottish establishments with two or more people working in them. The weighting was designed and undertaken on an interlocking size and sector basis and mirrors the approach undertaken in 2016.

A separate weight was generated to report on the volume of work placements employers reported over the previous 12 months, grossing data to the total Scottish employment population as opposed to the Scottish establishment population.

Structure of the report

The Scottish EPS 2019 study focussed particularly on employers’ choices regarding their approach to recruitment, their investment in skills, and their engagement with apprenticeships, the report is grouped around these topics, as shown below:

Chapter 2: Characteristics. This chapter describes some of the key characteristics of the Scottish employer population, including length of operation and business outlook. These characteristics help to provide context for the report’s findings.

Chapter 3: Entry to Work. This chapter provides evidence on employer approaches to recruitment, what employers look for in applicants and the recruitment of education leavers.

Chapter 4: Supporting entry to work. This chapter reports on the activities that employers engage in which may help support entry to work − particularly for young people − in terms of their engagement with work experience. It also reports on employer awareness of, and engagement with, Developing the Young Workforce (DYW) Regional Groups.

Chapter 5: People Development. This chapter explores employers’ decisions on staff development and what drives those decisions, examining how employers can be encouraged to input into the design of skills initiatives and vocational qualifications (VQs).

Chapter 6: Apprenticeships. This chapter determines employer engagement with and attitudes towards, apprenticeships, as well as the market potential for apprenticeships, with a view to exploring where and how engagement with apprenticeships can be increased.

Chapter 7: Conclusions. The final chapter revisits the key findings emerging from the different strands of the survey, bringing them together and considering their implications.

Supplementary data tables which typically present key data broken down by Regional Outcome Agreement (ROA) region, employer size and sector are provided in Appendix A and are referred to throughout the chapters.

Reporting conventions

As noted earlier, the survey was carried out at an establishment level (see Box 1.1). The terms ‘establishment’, ‘employer’ and ‘workplace’ are used interchangeably throughout this report to avoid excessive repetition and to aid reading. When terms such as “all employers” or “all establishments” are used, these refer specifically to the Scottish population of employers (those with two or more employees).

Throughout the report, unweighted base figures are shown on tables and charts to give an indication of the statistical reliability of the figures.  

As a general convention throughout the report, figures with a base size of fewer than 25 establishments are not reported (with a double asterisk, ‘**’ displayed instead), and figures with a base size of 25 to 49 are italicised to indicate that caution is needed when interpreting them because of the low base size. 

In tables, findings of ‘zero’ are denoted by a dash ‘-’; an asterisk ‘*’ is used if the figure is larger than zero but smaller than 0.5.  

Where the term ‘significant’ is used this refers to statistical significance, and is to a 95 per cent confidence level unless otherwise stated. 

In some cases figures in tables and charts may not always add to 100 per cent due to rounding (i.e. 99 per cent or 101 per cent). For example, when combining and summarising answer codes which are presented individually in a chart but reported on a combined basis in the text (such as combining ‘well prepared’ with ‘very well prepared’ to present an overall percentage), adding the individual percentages may not always sum exactly to the combined percentage. Furthermore, in the majority of cases, ‘don’t know’ answers have not been included in the charts and percentages calculated.

The definitions of the broad sector classifications used in the report can be found in Appendix C. Definitions for ROA region, which is used for reporting, are given in table 1 below. The table shows how each Local Authority maps onto each ROA region. ROA data tables should not be summed to give an all-Scotland figure as there are a small number of Local Authorities which map onto more than one ROA. 

Table 1.1: ROA Region Definitions

ROA Region	Local Authority (note some overlap)
Aberdeen and Aberdeenshire	Aberdeen City
	Aberdeenshire
Ayrshire	East Ayrshire
	North Ayrshire
	South Ayrshire
Borders	Scottish Borders
Dumfries and Galloway	Dumfries and Galloway
Edinburgh and Lothians	East Lothian
	Edinburgh
	Midlothian
Fife	Fife
Forth Valley	Clackmannanshire
	Falkirk
	Stirling
Glasgow	East Dunbartonshire
	East Renfrewshire
	Glasgow
Highlands and Islands	Argyll and Bute
	Eilean Siar
	Highland
	Moray
	Orkney islands
	Shetland Islands
Lanarkshire	East Dunbartonshire
	North Lanarkshire
	South Lanarkshire
Tayside	Angus
	Dundee
	Perth and Kinross
West	East Renfrewshire
	Inverclyde
	Renfrewshire
	West Dunbartonshire
West Lothian	West Lothian