1. Employer Skills Survey 2015 Northern Ireland Slide Pack March 2016

2. Contents Employers’ experiences of skill shortages The internal skills challenge Under-utilisation of skills Employer investment in training and skills Retention difficulties High Performance Working Practices and Product Market Strategies Conclusions Background 7 23 35 41 17 55 60 3 2

3. ESS 2015 – overview ESS 2015 is the third time the survey has been run at UK-level The 2015 survey covers establishments with 2 or more people working at them The 2011 survey included establishments with one employee – these were not covered in 2013 or 2015. Where comparisons are made with 2011 or 2013 findings, these are based on re-weighted 2011 data (configured to represent the 2+ employment business population used in 2013 and 2015). 4,019 telephone interviews with establishments in Northern Ireland 669 follow up interviews on training spend 3

4. Achieved interviews / confidence intervals ‘For a question asked of all respondents where the survey result is 50%, we are 95% confident that the true figure lies within the range 49.79% to 51.21%’ Population Number of interviews (Maximum) Sampling Error Northern Ireland54.5184,019+/-1.55 By region Belfast10,607790+/-3.49 Northern12,531925+/-3.22 North West4,813355+/-5.20 Southern9,458702+/-3.70 South Eastern8,237661+/-3.81 South West8,872586+/-4.05 By size of establishment 2-429,1351,168+/-2.87 5-2420,2032,236+/-2.07 25-492,928321+/-5.47 50-991,451191+/-7.09 100-24959172+/-11.55 250+21031+/-17.60 Population Number of interviews (Maximum) Sampling Error By sector Agriculture7,01584+/-10.69 Manufacturing3,178339+/-5.32 Electricity, Gas and Water 36829+/-18.20 Construction5,715246+/-6.25 Wholesale and Retail11,766859+/-3.34 Hotels & Restaurants4,063415+/-4.81 Transport and Communications 2,489289+/-5.76 Financial Services1,10193+/-10.16 Business Services6,163507+/-4.35 Public Administration78849+/-14.00 Education3,094267+/-6.00 Health and Social Work4,464382+/-5.01 Arts and Other Services4,314460+/-4.57 4

5. Profile of survey population 2-4 5-24 25-49 100-249 Establishments vs. Employment – Northern Ireland 50-99 MULTISITE SINGLE SITE 27% 72% Base: All establishments (4,019) PRIVATE SECTOR 3RD SECTOR PUBLIC SECTOR 250+ ** 5

6. Key definitions Skills gapsSkill-shortage vacancies Incidence Density Under-utilisationVacancies Proportion of establishments with at least one employee deemed by their employer to be not fully proficient in their role The number of staff reported as not fully proficient as a proportion of all employment Proportion of establishments with at least one employee with skills and qualifications more advanced than required for their current job role The proportion of all staff with skills and qualifications more advanced than required for their current job role Proportion of establishments reporting at least one vacancy Vacancies as a proportion of all employment Proportion of establishments reporting at least one skill- shortage vacancy Skill-shortage vacancies as a proportion of all vacancies Establishment base Employment base Proportions are based on the number of establishments, defined here as a single location of an organisation, where at least two people work. Proportions are based on the total number of employees and working proprietors across establishments. 6

7. Section 1: Employers’ experiences of skill shortages 7

8. Incidence and density of vacancies by region Northern IrelandBelfastNorthernNorth WestSouth Eastern Incidence of vacancies Density (vacancies as % of employment) SouthernSouth West 201320112015 UK 201320112015201320112015201320112015201320112015201320112015201320112015201320112015 Base: All establishments (2011: UK: 86,522; Northern Ireland: 3,912; Belfast: 907; Northern: 862; North West: 383; Southern: 650; South Eastern: 667; South West:452 2013: UK: 91,279; Northern Ireland: 4,014; Belfast: 918; Northern: 878; North West: 377; Southern: 644; South Eastern: 688; South West:509 2015: UK: 91,210; Northern Ireland: 4,019; Belfast: 790; Northern: 925; North West: 355; Southern: 702; South Eastern: 661; South West: 586). 8

9. Health & Social Work Incidence and density of vacancies by sector Education Public Administration Arts & Other Services Electricity, Gas & Water Manufacturing Business Services Transport & Comms Financial Services Wholesale & Retail ConstructionAgricultureHotels & Restaurants 252889107706045466048365821,53656366320 Incidence of vacancies Density (vacancies as % of employment) Employers with at least one vacancy (2015) Base: All establishments (as shown) * Figure should be treated with caution due to low base size (<50) (55)2013: 2015: (43*)(408)(385)(327)(292)(282)(133)(491)(36*)(866)(112)(259) (49*)(29*)(382)(415)(339)(267)(289)(84)(507)(460)(859)(93)(246) 2015 2013 9

10. Incidence and density of skill-shortage vacancies by region SSV Density (SSVs as % of Vacs) Incidence of establishments with vacancies Incidence of establishments with skill-shortage vacancies 29% 22%17% Base: All establishments (2011: UK: 86,522; Northern Ireland: 3,912; Belfast: 907; Northern: 862; North West: 383; Southern: 650; South Eastern: 667; South West:452 2013: UK: 91,279; Northern Ireland: 4,014; Belfast: 918; Northern: 878; North West: 377; Southern: 644; South Eastern: 688; South West:509 2015: UK: 91,210; Northern Ireland: 4,019; Belfast: 790; Northern: 925; North West: 355; Southern: 702; South Eastern: 661; South West: 586). Northern IrelandBelfastNorthernNorth WestSouth EasternSouthernSouth West 201320112015 UK 201320112015201320112015201320112015201320112015201320112015201320112015201320112015 17% 26%36% 17% 11%31% 20% 11%16% 6% 29%15% 21%19% 23% 16%22% 20% 23%17% 10

11. Density of skill-shortage vacancies by sector Base: All establishments with vacancies (only 2015 shown) ** denotes data not shown due to low base size (<25) 243 63 569 256 90 408 444 251 163 0 ** (100) (202) (337) (231) (48) (399) (200) (137) (146) (12) (5) (4) Number of SSVs (2015) 11

12. Density of skill-shortage vacancies by occupation 49 54935195471384182432360 Base: All establishments with vacancies in each occupation (as shown) ** denotes data not shown due to low base size (<25) * Figure should be treated with caution due to low base size (<50) (33*)2015: 2013: (137)(125)(61)(102)(95)(115)(58) (152) (24)(105)(108)(80)(76)(85)(83)(34*) (69) 2011: (32*)(92)(82)(100)(69)(71)(69)(33*) (79) Number of SSVs (2015) 12

13. Technical and practical skills lacking among applicants Base: All with skill-shortage vacancies that received the new lists of skills descriptors (158) 13

14. People skills lacking among applicants Base: All with skill-shortage vacancies that received the new lists of skills descriptors (158) 14

15. Impact of skill-shortage vacancies Base (2013/2015): All establishments with hard-to-fill vacancies that are all as a result of skill shortages (136/ 162) 2015 2013 15

16. Action taken to fill skill-shortage vacancies Base (2013 / 2015): All with hard-to-fill vacancies (181/ 228) 16

17. Section 2: Retention difficulties 17

18. Base: All establishments in Module 2 (as shown) Incidence of retention difficulties - by region 10% 8% (4,019)(414)(468)(166)(288)(327)(351)(45,818) 18 Proportion with retention difficulties

19. Incidence of retention difficulties - by establishment size 10% 8% Base: All establishments in Module 2 (as shown) * Figure should be treated with caution due to low base size (<50) (584)(1138)(150)(89)(20*)(33*) 19 Proportion with retention difficulties

20. Incidence of retention difficulties by sector Base: All establishments in Module 2 (as shown) ** denotes data not shown due to low base size (<25) * Figure should be treated with caution due to low base size (<50) (161) (36*) (235)(250) (145)(31*)(419)(53)(15*) (127) (29*) (136) (207) ** 20 Proportion with retention difficulties

21. Occupation most affected by retention difficulties Base: All establishments with retention difficulties (148) 21 Proportion with retention difficulties

22. Base: All establishments experiencing retention difficulties (Module 2: 148) Reasons why it is difficult to retain staff 22

23. Section 3: The internal skills challenge 23

24. Incidence and density of skills gaps by region Density (% of all staff with a skills gap) Incidence of skills gaps Northern IrelandBelfastNorthernNorth WestSouth EasternSouthernSouth West 201320112015 UK 201320112015201320112015201320112015201320112015201320112015201320112015201320112015 Base: All establishments (2011: UK: 86,522; Northern Ireland: 3,912; Belfast: 907; Northern: 862; North West: 383; Southern: 650; South Eastern: 667; South West:452 2013: UK: 91,279; Northern Ireland: 4,014; Belfast: 918; Northern: 878; North West: 377; Southern: 644; South Eastern: 688; South West:509 2015: UK: 91,210; Northern Ireland: 4,019; Belfast: 790; Northern: 925; North West: 355; Southern: 702; South Eastern: 661; South West: 586). 24

25. Incidence and density of skills gaps by establishment size 2 to 45 to 2425 to 4950 to 99100-249 Density (% of all staff with a skills gap) Incidence of skills gaps 2011: (989) (2,265) (327) (185) (105) (50) 2013: (1,227) (2,189) (307) (167) (83) (41*) 2015: (1,168) (2,236) (321) (191) (72) (31*) Base: All establishments (as shown) * Figure should be treated with caution due to low base size (<50) 201120152013 250+ 25

26. Incidence and density of skills gaps by sector Density (% of all staff with a skills gap) Incidence of skills gaps Number of skills gaps (2015) Base: All establishments (as shown) * Figure should be treated with caution due to low base size (<50) 20152013 (385)2013: 2015: (866)(327)(292)(408)(112)(282)(43*)(491)(361)(133)(55)(259) (415)(859)(339)(267)(382)(93)(289)(29*)(507)(460)(84)(49*)(246) 2,8417,3663,2668934,3252229382,05288158711395359 26

27. Skills gaps density by occupation 24,4971,4939417461,7341,6644,4025,0134,7493,755 Number of skills gaps (2015) 20152013 Base: All employment (as shown) * Figure should be treated with caution due to low base size (<50) (4,014)2013: 2015: (152)(72)(51)(167)(133)(81)(207)(161) (4,019)(94)(42*)(28*)(117)(66)(46*)(163)(129) (60) (71) 27 Density of skills gaps

28. Main causes of skills gaps Base (2013/2015) : All establishments with skills gaps - up to 2 occupations followed up (733/ 520) Figures are shown as a percentage of all gaps (not a percentage of all establishments) 28

29. Impact of skills gaps by establishment size (520) (36*) (318) (83) (49*) (34*) (8) Base: All with skills gaps (as shown) **denotes data not shown due to low base size (<25 * Figure should be treated with caution due to low base size (<50) Staff not fully proficient has a major impact on establishment performance Staff not fully proficient has a minor impact on establishment performance ** 29

30. Impact of skills gaps Base: All establishments with skills gaps (520) 30

31. Technical and practical skills that need improving among staff with skills gaps Base: All with skills gaps followed up with the new lists of skills descriptors (1,217) 31

32. People and personal skills that need improving among staff with skills gaps Base: All with skills gaps followed up with the new lists of skills descriptors (1,217) 32

33. Action taken to overcome skills gaps Base (2013 / 2015): All establishments with skills gaps (733/ 520) 33

34. Changes in the number of SSVs and skills gaps over time Base: All establishments (as shown) * Figure should be treated with caution due to low base size (<50) ConstructionFinancial Services Public Admin Business Services ManufacturingHealth & Social work AgricultureHotels & Restaurants Electricity, Gas & Water EducationWholesale & Retail (491)(112)(55)(292)(361)(385)(259)(866)(133)(327)(43*)(408)(282) 2013: 2015: Transport & Comms Arts & Other Services 34

35. Section 4: Under-utilisation 35

36. Incidence and density of skills under-utilisation by region Base: All establishments (as shown) (4,019)(790)(925)(355)(702)(661)(586) Northern IrelandBelfastNorthernNorth WestSouth EasternSouthernSouth WestUK (91,210) 36

37. Incidence and density of skills under-utilisation by establishment size Base: All establishments (as shown) (1,168) (2,236) (321) (191) (72) (31) 37

38. Incidence and density of skills under-utilisation by sector Base: All establishments (as shown) * Figure should be treated with caution due to low base size (<50) (382)(29*)(415)(267)(460)(859)(93)(49*)(507)(289)(339)(84) (246) 38

39. Occupations where under-utilisation is most prevalent Base: All establishments with under-utilised staff (1,223) 13% Elementary staff 2% Machine operatives 29% Managers 9% Professionals 8% Associate Professionals 14% Admin. / clerical staff 6% Skilled trade occupations 7% Caring, leisure and other 11% Sales and customer services 39

40. Reasons why staff are working in roles for which they have excess qualifications and skills Base: All establishments with under-utilised staff (1,223) 40

41. Section 5: Employer investment in training and skills 41

42. Proportion of employers providing training in the last 12 months by region Base: All establishments (as shown) (790)(925)(702)(355)(661)(586)(4,019)(91,210) 42

43. Base: All establishments (as shown) * Figure should be treated with caution due to low base size (<50) (1,168) (2,236)(321) Proportion of employers providing training in the last 12 months by size (191) (72) (31*) 43

44. (460) Proportion of employers providing training in the last 12 months by sector Base: All establishments (as shown) * Figure should be treated with caution due to low base size (<50) (267) (29*) (382)(49*)(93) (507) (415)(339)(289)(246)(859) (84) Agriculture Wholesale & Retail Construction Electricity, Gas etc. Health and Social Work Public Admin Financial Services Arts and Other Business services Hotels & Restaurants Manufacturing Transport & Comms. 44

45. don’t train of employers in training equilibrium (no desire to increase training) Wanted to train more Do sufficient training Wanted to train Did not want to train (Base: 2,869)(Base: 1,150) of employers want to train more Training Equilibrium: employers’ interest in providing more training than they were able to Among those who train Among those who don’t train of all employers train Base: All establishments (4,019) *Note training employers responding ‘Don’t know’ have been included in the group ‘Wanted to undertake more training’ on final measure Don’t know 45 45

46. Types of Training and Workforce Development provided Base (2015): All establishments that train (2,869) Any induction 67% 46 Proportion providing each type of training

47. Number and proportion of staff trained by region Base: All establishments (as shown) (4,019)(790)(925)(702)(355) Total number of staff trained (thousands) (4,014)(918)(878)(644)(377)2013: 2015: 534446 (661)(586) (688)(509) (3,912)(907)(862)(650)(383) 2011: (667)(452)(66,916) (69,842) (69,541) 4966516851623634401501461421078592464426433 16.8m17.4m 14.7m 47 Proportion of staff trained

48. Proportion of staff trained by size Base: All establishments (as shown) * Figure should be treated with caution due to low base size (<50) (594)(294)(181)(67)(1,702) (628)(277)(157)(83)(1,712) (545)(297)(175)(105)(1,733)2011: 2013: 2015:(31*) (41*) (50) 48

49. Number and proportion of staff trained by sector Base: All establishments (as shown) **denotes data not shown due to low base size (<25) * Figure should be treated with caution due to low base size (<50) (35*)(215)(20*)(144)(561)(271)(191)(71)(400)(42*)(246)(350)(323) (46*)(199)(32*)(167)(577)(254)(187)(88)(381)(51)(264)(373)(275) (20*)(217)(39*)(213)(515)(237)(186)(113)(416)(99)(263)(368)(217)2011: 2013: 2015: 48k1470k25k22k8k74k37k42k92k19k6k6k Total number of staff trained 2015 49 Proportion of staff trained

50. Proportion of staff trained by occupation Base: All establishments with staff in each occupation (as shown) 2011: (3,718)(718)(544)(2,403)(900)(550)(1,116)(612)(1,240) 2013: (3,789)(757)(671)(2,357)(915)(613)(1,156)(575)(1,339) 2015: (1,778)(541)(303)(1,140)(467)(533)(708)(343)(645) 50 Proportion of staff trained

51. Training Days Base: All establishments providing training (as shown) Days per person trainedTotal training days 201120132015201120132015 % increase from 2013 UK 7.8 (66,916) 6.7 (69,842) 6.8 (69,541) 115m113m118m+4.2% Northern Ireland 6.3 (2,903) 6.3 (2,894) 5.6 (2,869) 2.7m 2.6m-3.5% Belfast 6.0 (721) 5.3 (705) 4.9 (606) 0.8m 0.7m-5.4% Northern 7.3 (628) 6.9 (621) 5.0 (654) 0.7m0.6m0.5m-8.5% North West 5.6 (289) 6.5 (275 5.3 (256) 0.2m -14.8% Southern 5.3 (481) 5.5 (435) 6.5 (494) 0.3m 0.4m+57.4% South Eastern 7.3 (462) 6.1 (500) 6.3 (448) 0.4m 0.3m-23.0% South West 5.9 (322) 9.7 (358) 7.3 (411) 0.3m0.4m -9.2% 51

52. Base: All establishments that do not provide training (1,119) Reasons for not providing any training 52

53. Base : All establishments who would have provided more training in the past 12 months if they could (1,406) Reasons for not providing further training 53

54. Training and Workforce Development - Summary Northern Ireland figures201120132015 % of employers that train65%63%62% % of employers that train off-the-job48%49%47% % that only train on-the-job17%14%15% % of staff trained over the last 12 months56%59%64% Days training per person trained6.3 days 5.6 days Total training days provided2.7m 2.6m Base (2011/2013/2015): All establishments (3,912/ 4,014/ 4,019) 54

55. Section 6: High Performance Working practices and Product Market Strategies 55

56. All private sector employers 43,000 Base: All private sector establishments (3,004) HPW & PMS 2,000 High or Very High PMS only 15,000 HPW only 3,000 Overlap between High Performance Working employers and those that adopt High/Very High Product Market Strategies 56

57. High Performance Working and skills challenges Base for all charts: All establishments in Module 1 by HPW classification (HPW: 494; non-HPW: 2552) …yet are more likely to have skills gaps among their workforce… …and are much more likely to train their staff… Have skills gaps Train HPW employers are more active in the recruitment market and find it easier to fill their vacancies… 57

58. Product Market Strategy Not at all price dependent Often leads the way Premium quality Substantial customisation Base: All establishments in the private sector (3,004) Wholly price dependent Rarely leads the way Standard or basic quality No difference in product/service offering Overall composite Product Market Strategy scores Aggregate PMS score % of private sector establishments % of private sector employment Very low (1 to 7)5%2% Low (8 to 10)12%9% Medium (11 to 13)22%15% High (14 to 16)21%23% Very high (17 to 20)11%14% 58

59. Characteristics of High PMS employers …are slightly more likely to experience skills gaps, though the proportion of their workforce with skills gaps is lower than employers at the ‘very low’ end… Have skills gaps Train ‘Very high’ PMS employers are more likely to find vacancies hard-to-fill for skills related reasons… Base for all charts: All establishments in the private sector by PMS group (Very high: 1,409; Very low: 596) …and are more likely to train their staff, although the proportion of staff trained is comparable … 59

60. Section 7: Conclusions 60

61. Current state of skills in Northern Ireland There has been a steep rise in vacancy levels among employers - from 15 thousand vacancies at the time of the survey in 2013 to 20 thousand in 2015 – reflecting high demand for labour. The number of skills gaps among existing staff has decreased slightly to 25 thousand employees (3.4% of the total workforce). Knowledge related to the organisation and its services and specialist skills for the role were most likely to be viewed as lacking from applicants and among existing staff. The demand for improved people and personal skills was also apparent, with time management and prioritisation of tasks commonly lacking across the workforce. This points to the growing complexity of job roles, across all occupations, requiring individuals to juggle multiple strands of work and responsibility. 61

62. Impacts and Response Skills challenges impact both the short-term and long-term success of businesses, with notable implications on businesses’ productivity and growth potential. Most commonly, employers acknowledge the increased workloads and pressure placed on some staff as a result of skills shortages within the market and the workplace (83% and 56%, respectively). Innovation is a key factor towards boosting productivity but the skills challenges employers faced, particularly around staff being unable to solve complex problems point to limitations here. Appropriate training can serve to mitigate such impacts, but training levels have remained relatively static since 2013 (62%), despite a more buoyant economy. Employer engagement in the development of future training is fundamental with regards the development of the training offer. Around half of employers already providing training exhibit a desire to offer more (47%), and cite lack of funds as the most prevalent barrier to doing so. Around 56 thousand were deemed to be over qualified and over skilled for their job role; this was most commonly attributed to a lack of jobs in desired higher level roles. Employers need to capitalise on this available talent. 62

63. For more information contact UKCES Employer Surveys Employer.surveys@ukces.org.uk 0207 227 7800 @ukces