Regional Skills Assessment 2016

Regional Skills Assessment 2016
Aberdeen City & Shire comprising Aberdeen City and Aberdeenshire Glasgow

Contents Section 1: Introducing the Regional Skills Assessments (RSAs)
Section 2: National Policy Context Section 3: The National Economic and Skills Context Section 4: Aberdeen City & Shire in Context Section 5: Economic Performance of the Aberdeen City & Shire Section 6: Aberdeen City & Shire Business Base Section 7: Where are the jobs in Aberdeen City & Shire Section 8: The People of Aberdeen City & Shire Section 9: Aberdeen City & Shire Labour Market Section 10: Skills Challenges in Aberdeen City & Shire Section 11: Schools numbers and destinations in Aberdeen City & Shire Section 12: Skills Provision in Aberdeen City & Shire Section 13: College Activity Section 14: University Provision Section 15: How are Skills and Jobs Likely to Change? Section 16: What are the key implications for the Region? Glasgow

1. Introducing the RSAs In this section:
What are Regional Skills Assessments (RSAs)? What is not covered by the RSAs? Other sources of useful information Glasgow

The 2016 Regional Skills Assessments
Regional Skills Assessments provide a coherent evidence base on which to base future investment in skills, built up from existing datasets Their purpose is to: Support SFC, Regional Colleges, Strategic Bodies and College Boards in negotiating Regional Outcome Agreements (ROAs) for Academic Years Provide a framework for aligning SDS investment in individuals and businesses. Assist partners in planning their strategic investment in skills. Support wider public and private investment propositions. Glasgow

The 2016 Regional Skills Assessments
RSAs are developed by Skills Development Scotland (SDS) in partnership with Highlands and Islands Enterprise (HIE), Scottish Enterprise (SE), the Scottish Funding Council (SFC) and the Scottish Local Authorities Economic Development (SLAED) Group. They cover demand for skills, supply of people and skills, skills provision and skills challenges. ….and include employment and GVA forecasts and trends to help identify future skills needs RSA cover: Regional performance and characteristics Trends over time How does the region compare to Scotland High level implications for skills planning Provide a data matrix to allow further analysis RSAs do not: Answer every question... however can be used alongside data matrix and other national and local intelligence Tell partners what they should do – although RSAs are designed to support making better informed decisions Glasgow

RSA data sources and coverage
The Regional Skills Assessments are underpinned by the 2016 data matrix of 7 workbooks, containing data on 117 social and economic indicators With data at 3 spatial levels: Regional Outcome Agreement areas; City Region Deal; Local Authority – with Scotland and GB/UK comparators where available The matrix only draws upon official datasets (including APS, BRES, UKCES, UK Business Counts, Census, Scot Gov datasets) and partner data (SFC, SDS, SE, HIE). No primary research is involved. The data matrix is found here: The data matrix including a full user guide is available at: do/partnerships/regional-skills-assessments Data Matrix sources include: Annual Population Survey Business Register Employment Survey UKCES Employer Skills Survey UK Business Counts Census Data Scottish Government Growth Sector datasets Scottish Index of Multiple Deprivation Partner data sources include: SDS Participation Measure data SDS Apprenticeship Family data SE and HIE data on Regional Selective Assistance and Account Managed businesses supported SLAED data on major infrastructure projects Glasgow

Other useful sources and publications
Other useful sources of current and forthcoming information are available. Scottish Government Labour Market Strategy Scottish Government Economic Strategy Sectoral and Regional Skills Investment Plans UKCES Employer Survey data Fraser of Allander Institute Quarterly Economic Reports RBS Business Monitor Markit Economics Purchasing Managers' Index Glasgow

2: National Policy Context
In this section: Government Economic Strategy Labour Market Strategy Youth Employment Strategy Skills Planning Model Scotland’s Skills Agencies Enterprise and Skills Review Glasgow

Economic Strategy (1) Scotland’s Economic Strategy (2015) reaffirms the Scottish Government’s commitment to creating a more successful country, with opportunities for all of Scotland to flourish, through increasing sustainable economic growth. It sets out an overarching framework for achieving the two mutually supportive goals of increasing competitiveness and tackling inequality. It forms the strategic plan for existing and all future Scottish Government policy and prioritises boosting investment and innovation, supporting inclusive growth and maintaining focus on increasing internationalisation.

Labour Market Strategy (2)
Scotland’s Labour Market Strategy (2016) sets out for the first time how the labour market and wider social and economic policies interact to drive ambitions for inclusive growth. It provides a framework for the approach to the labour market, and describes the actions that will be taken to deliver the vision. Vision: “A strong labour market that drives inclusive, sustainable economic growth, characterised by growing, competitive businesses, high employment, a skilled population capable of meeting the needs of employers, and where fair work is central to improving the lives of individuals and their families.“ Five priorities: promoting the Fair Work Framework and encouraging responsible business; supporting employability and skills, so that all of our people can participate successfully in the labour market; investing in our people and our infrastructure; fostering innovation including workplace innovation which will help spur job creation; and promoting Scotland internationally to improve the competitiveness of our businesses.

Youth Employment (3) Developing the Young Workforce – Scotland’s Youth Employment Strategy (2014) sets out how the Scottish Government will implement the recommendations from the Commission for Developing Scotland's Young Workforce, with headline target to reduce youth unemployment by 40% by 2021:

Skills Planning Model (4)
Regional Skills Assessments are at the heart of Scotland’s Skills Planning Model by providing an evidence base to understand demand for skills and to influence planning and investment to meet demand.

Scotland’s Skills Agencies (5)
Skills Development Scotland and the Scottish Funding Council are the two core skills agencies for Scotland. Skills Development Scotland Making Skills Work for Scotland: Employers are better able to recruit the right people with the right skills at the right time Employers have high performing, highly productive, fair and equal workplaces People have the right skills and confidence to secure good work, progress in their careers and achieve their full potential Across all SDS services and programmes, there is increased equality of opportunity SDS is recognised as an employer of choice, an exemplar of fair work, and internationally recognised for excellence, innovation and customer focus Scottish Funding Council, Ambition 2025: Scotland - the Best Place in the World to Learn, to Educate, to Research and to Innovate “Our ambition is that Scotland will be the best place in the world to learn, to educate, to research, and to innovate……with colleges and universities making a major contribution to Scotland’s social, cultural and economic development.” Priority outcomes: High-quality learning and teaching World-leading research Greater innovation in the economy.

Enterprise & Skills Review (6)
Report on Phase One (2016) included a series of recommendations of relevance to skills investment planning “We will align the functions of our skills agencies to better join up how learning and skills are planned and provided to learners and employers.” “We will conduct a comprehensive review of the Learning Journey focused on sustained employment, with significantly enhanced use of labour market information in skills planning at its heart.” “We will review the effectiveness of our investment in learning and skills to ensure we have the right balance of provision across age groups and sectors and maximise its contribution to productivity and inclusive growth.” Next steps; Regional partnerships Digital Enterprise support

3: Scotland’s Economic and Skills Context
In this section: Economic Recession to Recovery Productivity Employment Non Standard Jobs Occupational Change In Work poverty Skills Challenges Scotland’s people Looking to the Future Glasgow

Economic Recession to Recovery (1)
The ‘great recession’ was the longest and deepest recession in the UK since the 1930s both in terms of depth of recession and time to recover GDP. The UK posted the slowest recovery of any advanced economy (aside from Italy and Greece) with recovery only taking hold after pause to fiscal consolidation in 2012 and consumer spending and investment. Scotland’s recession was shallower than the UK. Different sectors had different rates of recovery. Recession and Recovery in Scotland Output Source: Adapted from Fraser of Allander. March 2016 Glasgow

Productivity (2) Productivity in Scotland
Moderated growth in the international economy and Scotland and poor productivity growth presents challenging conditions for many sectors and industries. Productivity in Scotland UK trails G7 advanced economies on productivity by 18 percentage points. Scotland trails UK. UK trails US productivity across all sectors, especially manufacturing. There is evidence that the UK manufacturing productivity in line with France/ Germany. But significant deterioration versus Europe in financial services and private service sector. Productivity improvements have been muted at a Scottish level over the last six years and have fallen behind wages growth. This suggests a weakening of Scotland’s competitive advantage. Fraser of Allander Institute argue that total factor productivity in Scotland is much lower than UK. In the absence of faster Scottish population growth, sustained economic growth will require raising competitiveness. Glasgow

Employment (3) Jobs in Scotland
Total employment in Scotland continued to fall until 2012, but has risen sharply since then. Total employment in was 1.5% greater than in 2009, although this is compared to a 7% increase in the UK. This has been dominated by private sector growth alongside a fall in public sector employment. Jobs in Scotland Employment Source: Business Register and Employment Survey, Glasgow

Non Standard Jobs (4) The Rise of Non-Standard Work
Although Scotland is experiencing a growth in total employment since pre-recession times, a large part of this is due to the rise of ‘non standard jobs’ – part time, temporary and self employment. Of the new jobs created since the recovery, 50,000+ have been part time jobs, 35,000+ have been self-employed jobs and more than 13,000 have been temporary jobs. Only 9,000 or so have been full time jobs. The Rise of Non-Standard Work Employment change in Scotland and the UK, 2008 – 2015 Source: Labour Force Survey Glasgow

Occupational Change (5)
The occupational shift has seen a polarisation of employment with a strong bias towards higher skilled occupations. In effect, what we are seeing is an hour glass labour market. This represents significant challenges for progression. Occupational Shifts Source: 2011 Census, Labour Force Survey, Oxford Economics Glasgow

In-Work Poverty (6) Low Pay and in-work Poverty
Historically, being in work was seen as a way of escaping poverty, however more recently this is not the case for all. In 2014/15 , 260,000 people or 55% of working age adults living in poverty were living in households where at least one adult was working, before housing costs (BHC). In 2014/15, 350,000 people or 58% of working age adults living in poverty were living in households where at least one adult was working, after housing costs (AHC). In-work poverty can be a particular challenge for some groups – women, younger people, older workers, those with no qualifications, some ethnic groups, lone parents and people with disabilities. Low Pay and in-work Poverty In-work poverty (relative poverty AHC) in Scotland: 1998/99 to 2014/15 Number of individuals in poverty in households with at least one adult in employment Source:HBAI dataset, DWP Glasgow

Skills Challenges (7) Current Skills Challenges in Scotland (From Employer Skills Survey 2015) Steep rise in vacancies from 54,000 (2013) to 74,000 (2015) – reflecting higher demand for labour Proportion of establishments reporting Skills Shortage Vacancies in Scotland rose from 3% (2011) to 4% (2013) and 6% (2015) – in line with UK trends Proportion of establishments reporting skills gaps fell to 14% (2015) – same as at UK level Increasing levels of under-employment and under-utilisation of skills – 32% of establishments reported at least one member of staff with both skills and qualifications above the level required for the job Skills shortages and recruitment difficulties are likely to be a permanent feature of the Scottish labour market, particularly where experienced labour is required Along with under-employment and under-utilisation of skills, this will make improving productivity a challenging task Glasgow

Scotland’s People (8) People and Demographics
There have been strong population increases in Scotland, driven by in migration. The population is, however, an ageing one, with changing age demographics. This means there is considerable competition for young people. The majority of people in the workforce over the next 10 years are already working. People and Demographics Source: Mid Year Population Estimates Glasgow

The Future - Scotland’s People (9.1)
Over the period , the population of Scotland is forecast to grow by 9% to reach just under 5.8 million by The ageing of the population is forecast to continue however with the highest percentage of growth forecast in those age groups and 75+. Population Projections Source: General Register Office for Scotland Glasgow

The Future – GVA (9.2) Looking Forward – GVA for Scotland
GVA for Scotland is forecast to steadily increase over the period Looking Forward – GVA for Scotland Source: ONS, Oxford Economics Glasgow

The Future – Employment (9.3)
Although employment is forecast to contract between , this will be followed by growth from In 2024, this would be equivalent to just under 47,500 additional jobs in the economy compared to levels. Looking Forward - Employment Source: BRES, ONS workforce jobs, Oxford Economics Glasgow

The Future – Employment by Industry (9.4)
Not all industrial sectors will fare the same in terms of employment growth. It is forecast that there will be growth in Construction, Professional, scientific and technical activities and Administrative and Support Services whereas there will be a major decline in Manufacturing, Mining and Quarrying and Public sector jobs. Looking Forward - Employment Source: BRES, ONS workforce jobs, Oxford Economics Glasgow

The Future – Total Jobs Requirement (9.5)
Although understanding growth is important, a crucial part of skills planning is being able to understand the likely jobs that will arise as a result of both expansion demand (growth/contraction) and also replacement demand (churn in the labour market). Total jobs forecast to be filled in the period is 980,600 with most of these arising due to replacement demand and a very small proportion (c.26.5k) arising from growth. Looking Forward – Total Jobs requirement Total jobs requirement from Source: Oxford Economics Glasgow

The Future – Qualifications (9.6)
Based on the total jobs requirement for , the forecast for qualifications required shows that the vast majority of requirement is for people qualified at higher level - SCQF7 and above. Only a small proportion of opportunities will be available for people with no-low qualifications. Looking Forward - Qualifications Source: Oxford Economics Glasgow

4. Aberdeen City & Shire in Context
The context within which a region operates plays a huge part in explaining a region’s performance. Historical factors, the composition of the industrial sector, geographic location, image and demographics are all at play. It is important to provide the regional context before presenting demand and skills supply data. In this section: Aberdeen City & Shire’s contribution to Scotland’s economy Key sectoral characteristics Key labour market performance Deprivation and living standards Earnings and Commuting Patterns Aberdeen City & Shire Region SIP/Investment Glasgow

Aberdeen City & Shire Region in Context (1)
The Aberdeen City and Shire region has been a successful regional economy contributing considerable wealth to the Scottish economy, based around the oil and gas sector. To 2014, the region contributed some £16,559m to the Scotland economy, 13.9% of the total, a similar proportion to 2012 and 2013 following more than a decade of output growth. The recent downturn in the oil and gas sector is expected to show in the 2015 output data when this becomes available. For more on GVA see Section 5: Economic Performance. Aberdeen City & Shire Region’s Contribution to Scotland’s Economy Total GVA in the region and the region’s share of total Scotland GVA Source: Oxford Economics Glasgow

The historic strength of the oil and gas sector is reflecting in the 21% of all regional output coming from the mining and quarrying industrial sector. The sector supports a large service economy and the professional, scientific and technical activity sector is the next largest in terms of output, more than twice the Scotland average. For more on GVA see Section 5: Economic Performance. Industrial Structure of Aberdeen City & Shire Region (GVA by sector) 2014 Total GVA (£m) at 2013 prices Source: Oxford Economics forecasts Glasgow

There were 288,100 employed in the Aberdeen City & Shire region in 2015, tellingly 11,500 fewer than in 2014 as the effects of the oil and gas sector downturn feed through into employment statistics. This represented a 4% decline, and was the first fall in employment since the recession. Job losses have continued in These are people employed in VAT or PAYE-registered businesses and so excludes those who are self-employed and work for smaller firms.. See Section 7 on Where are the Jobs and Section 9 on the Labour Market. Key Labour Market Performance Employment change Aberdeen City and Shire region, Scotland and Great Britain Source: Business Register Employment Survey Employment change Aberdeen City & Shire region, Scotland and Great Britain Glasgow

The number of datazones in the most deprived 10% in Scotland has reduced considerably over the 10 years since Although there remain concentrations of deprivation in Aberdeen City and parts of Aberdeenshire, overall the region has performed well economically. This picture may start to change with the job losses in oil and gas, but it is too soon to say whether deprivation levels will rise. Household incomes in the region are well above average, with 26% of Aberdeen City and 30% of Shire households with earning above 40,000, well above the national average of 18%. Deprivation and Living Standards Source: Scottish Index of Multiple Deprivation Source: Scottish Household Survey Fewer Aberdeen City and Shire households have lower incomes than the Scotland average. Glasgow

Aberdeen City is the focus of the majority of jobs within the region, and many from Aberdeenshire commute into the City. Some 40% of those in Aberdeenshire commute into the City. By contrast, the vast majority of those in Aberdeen City work there. Few in the region work outside the region. More information is at Section 8: The People of the Aberdeen City & Shire region. Commuting Flows At the time of the 2011 Census, more than 40,000 in Aberdeenshire travelled into Aberdeen City for employment. Source: 2011 Census Glasgow

Aberdeen City & Shire in Context (6)
Aberdeen City and Shire Regional Skills Strategy (2016) SDS has been working with partners including NESCOL, University of Aberdeen, Robert Gordon University, Aberdeen City Council, Aberdeenshire Council, Aberdeen and Grampian Chamber of Commerce, Opportunity North East and Scottish Enterprise to develop a Regional Skills Strategy The strategy sets out a concerted programme of action around four key themes Responding to the downturn Supporting economic transition Repositioning the skills system School to work transitions A detailed action plan is being completed by partners and the Strategy will be published early in 2017 Glasgow

5. Aberdeen City & Shire: Economic Performance
The economic performance of the region is a critical driver of the demand for skills. Successful businesses need high levels of productivity, with skills an important component of this, although not the only one, particularly as business processes become more mechanised. Economic performance is measured using Gross Value Added per worker as the best measure of productivity. In this section: Total GVA and GVA growth rates GVA per employee (productivity) GVA per employee by sector Forecast GVA growth Glasgow

Economic Performance (1)
Total GVA in the Aberdeen City and Shire region has increased each year between 2010 and 2014, and the increase , at 4.1% was close to the national increase. Output had been rising sharply pre-recession, although output fell in 2009 as it did across Scotland. The recent downturn in the oil and gas sector are not yet reflected in GVA data. Total GVA in the Aberdeen City and Aberdeenshire Region ( ) Source: Oxford Economics Total GVA £m at 2013 prices Glasgow

GVA per worker is a proxy measure for productivity. It describes the region’s output in relation to the numbers in employment. Again this is heavily influenced by the sector composition of the regional economy. Sectors such as oil and gas and professional, scientific and technical services are typically more productive than others, with Aberdeen City and Shire having a greater share of these sectors than the rest of the region. The GVA per worker in Aberdeen City since the recession has increased and at a rate well above the Scotland average. GVA Per Employee (Productivity) Source: Oxford Economics Glasgow

GVA output is forecast to grow in the Aberdeen City and Shire region, although at a rate no greater than the Scotland average. Growth of 15.3% is forecast 2015 to 2024, compared to 15.9% for Scotland. The fall in oil prices which has caused job losses in the oil and gas sector and its supply chain means growth of just 0.1% is predicted for Further, uncertainty caused by the UK’s decision to leave the EU has dampened near-term growth prospects. GVA Output Growth to 2024 Source: Oxford Economics Glasgow

Growth in Aberdeen City and Shire’s economy is set to be heavily underpinned by growth in the professional services industry. Professional services will contribute around twice as much to total GVA growth as the next closest sector, wholesale and retail. Information and communications is expected to enjoy the fastest rate of growth (average 3.5% per year), followed closely by administrative and support services (3.5% per year) and professional, scientific and technical services (3.4% per year). . Forecast Output Growth by Sector Glasgow

6. Aberdeen City & Shire: Business Base
The business base of the region is a strong determinant of the economic performance described in the previous section. Successful businesses need skilled and effective employees. This section presents an analysis of the business base by its industrial sector composition and other characteristics. In this section: Total number of businesses and growth rates Business base by sector Growth sector businesses Business base by size Business density Business birth, death and survival rates Self employment Glasgow

Business Base (1) There were 23,320 VAT and PAYE registered businesses in the Aberdeen City and Shire region in The rate of growth in the region’s business base has been slower than the Scotland average since The growth rate from 2014 to 2015 was 4.9% compared to 7.3% for Scotland and this was the first time since 2010 that the rate of increase was lower than that for Scotland. Total Number of Businesses and Growth Rates Number of businesses by year from 2010 – and growth rate comparators Source: UK Business Counts Change in number of business Insert chart from ekosgen Glasgow

Business Base (2) Business Base by Sector, 2015
More than one in three businesses in Aberdeen City and Shire (34%) are in the professional, scientific and technical sector. This is almost double the proportion across Scotland. 13% of businesses are in the agricultural, forestry and fishing sector, reflecting that much of Aberdeenshire is rural, although most of these businesses will be very small. Business Base by Sector, 2015 Source: UK Business Counts Glasgow

Business Base (3) Growth Sectors
The Scottish Government’s Economic Strategy identifies six growth sectors, detailed below, where Scotland has a distinct comparative advantage. Almost six in 10 businesses in the region are in on of these identified growth sectors. A greater proportion of Aberdeen City and Shire region growth sector businesses are in energy (12% versus 5% for Scotland) and in finance and business services (43% versus 36%). The definition of the growth sectors can be found in Appendix 1. Growth Sectors Number of businesses by growth sector 2015 – and proportion of all growth sector businesses Scottish Government Growth Sectors Database Growth sector businesses as a proportion of all business, 2015 Glasgow

Business Base (4) Growth Sector Total GVA (£m), 2013
The strength of the energy sector, which is dominated by oil and gas, is demonstrated by the fact that the sector accounts for 84% of the region’s growth sector GVA. The financial and business services sector accounts for a further 9% of total growth sector GVA.. Growth Sector Total GVA (£m), 2013 Source: Scottish Government Growth Sectors Database Total GVA (£m) at basic prices of Scottish Government Growth Sectors by sector, 2013 Some figures are supressed due to data being disclosive Growth sector total GVA as a % of all growth sector GVA, 2013 Glasgow

Business Base (5) Business by Size, 2015 Business Density, 2015 ###
The Aberdeen City & Shire region has a large proportion of micro-businesses (employing fewer than 10 people), which is particularly the case in more rural Aberdeenshire. There are 100 large employers in the region (employing 250 or more). Business density in the region is 474 per 10,000 compared to 313 per 10,000 in Scotland, reflecting higher numbers self-employed in the agriculture, forestry and fishing sector, but also the recent strength of the regional economy (at least prior to the oil and gas sector downturn). Business by Size, 2015 Business Density, 2015 Number of businesses by employee size band and by proportion of all businesses, 2015 Source: UK Business Counts ### Glasgow

Business Base (6) Business survival rates in the Aberdeen City & Shire region are higher than for Scotland and Great Britain. In all, 56% of businesses starting in 2010 in the region had survived until 2014, compared to 48% across both Scotland and Great Britain. The business birth rate has consistently been above the Scottish average, although in 2014 the business birth rate dropped below the Great Britain rate. Business Birth and Death Rates ( ) and Survival Rates ( ) Note: A business is deemed to have survived if still active 5 years after birth. Source: ONS Business Demography and Mid-year Population Estimates Glasgow

Business Base (7) Self Employment
Self employment rates in the Aberdeen City & Shire region have fallen since 2011, partly as a result of the rise in employees in employment as the economy has performed well. This may start to change given the current difficulties facing oil and gas sector businesses. Self employment rates are the proportion of the resident working age (16-64) population who are self employed. Self Employment Source: Annual Population Survey – Jan-Dec each year Glasgow

7. Aberdeen City & Shire: Where are the Jobs?
Analysing the employment base of the region provides important information on the nature and functioning of the labour market. There have been significant occupational shifts in Scotland, reflected in changes in the Aberdeen City & Shire region, where higher skilled occupation employment continues to increase. There has been jobs recovery since the recession, but not all of these have been good quality jobs. In this section: Total employment and rate of change Employment by sector and change over time Sectoral specialism Employment by occupation and change Non standard jobs – part time and non permanent Resident and workplace earnings Glasgow

Where are the Jobs (1) Total Employment and Change 2009-2015
In 2015, the latest data available, there were 288,100 employees in VAT and PAYE registered businesses in the Aberdeen City & Shire region. This is a 3% fall from 2014 and a loss of 11,500 jobs. Redundancies in the oil and gas sector account for these losses, which in turn may affect supply chain and related service sector employment. The fall in employment followed strong jobs growth from 2010 to 2014. Total Employment and Change Source: Business Register and Employment Survey Glasgow

Where are the Jobs (2) Employment by sector provides important information on the industrial composition of the regional economy. Employment in the production sector (which includes oil and gas) still comprises the largest share employment at 20% of the total, some 59,000 jobs. The professional, scientific and technical sector is also well represented, twice the proportion for Scotland. Although agriculture, forestry and fishing represents a large number of businesses, this is only 1% of employees in employment. Employment by Sector and Proportion of Total Employment 2015 Source: Business Register and Employment Survey Glasgow

Where are the Jobs (3) Sector Specialisms
Marrying employment growth trends by sector with the size and concentration of the sector in a region can provide important information on the dynamics of the labour market. Concentration of a sector is the extent to which employment in the sector is above (or below) sector concentration at the Scotland level. Sector Specialisms Sectors above the horizontal line are more concentrated in the region than in Scotland, those below the line less so. Sectors to the right of the vertical line are larger in employment terms than five years ago, to the left less so. Larger bubbles reflect higher sector employment. The large and concentrated production and professional, scientific and technical sectors are illustrated right. The financial and insurance and information and communication sectors are less concentrated and have declined in size in the last five years. Note: SIC Section A: Agriculture, Forestry and Fishing omitted as data for farm agriculture (SIC subclass 01000) is not available sub-nationally Glasgow

Where are the Jobs (4) Employment by Occupation (2015)
The occupational profile of the region is important because occupation is often linked to skills requirements. There has been a steady and continuing shift to more professional occupations. In Aberdeen City & Shire almost one in four residents work in professional occupations (23%), higher than the Scotland and Great Britain averages. A further 13% work in associate professional and technical occupations. The proportion occupied in skilled trades remains high and above the Scotland average, linked to the production sector and also construction. Fewer are occupied in the caring and other service sector, which is a challenge for the region, given an ageing demographic and – until recently – strong competition for labour. Employment by Occupation (2015) Change Over Time Source: Annual Population Survey Glasgow

Where are the Jobs (5) Part Time Employment 2005-2015
Just over a quarter (26%) of those in employment work part-time and this is the same proportion as Scotland and Great Britain. The proportion working part-time was above average in 2010 and 2012 but had fallen to below average in More of the jobs created in the economic recovery have been part time jobs. A lower proportion than Scotland and UK averages are in non-permanent employment, which is linked to the success of the regional economy until the recent oil and gas sector difficulties. Part Time Employment Non-Permanent Employment, Source: Annual Population Survey Non-permanent employment is the proportion of all of those of working age in employment types such as fixed- term contracts, temporary agency, casual or seasonal work. The increase in non-permanent employment reflects the changing nature of employment. Source: Annual Population Survey Glasgow

Where are the Jobs (6) Some sectors are typically better paid than others, and the industrial base of the region is often an indicator of average wage levels. The composition of the industrial base within a region also affects workplace pay levels. Average workplace earnings in Aberdeen City are £617 for all workers, well above the Scotland average of £492. In Aberdeenshire, however, average workplace earnings are much lower, and below the Scotland average. By contrast, those resident in Aberdeenshire earn well above the Scottish average, close to the average for residents in Aberdeen City, reflecting the significant levels of in-commuting from the Shire into the City. Average Weekly Workplace and Residence-Based Earnings, 2015 Source: Annual Survey of Hours and Earnings Glasgow

8. Aberdeen City & Shire: Its People
The demographic characteristics of the region are extremely important in determining current and future demand for skills. The age profile of the population, the number of young people and elderly, the increasing proportion of retirees, are all contributory factors. The movement of people within a region, and into and out of a region, also affect the labour market and the supply of skills available to employers. In this section: Population growth Population profile Population projections Net migration Travel to work data Glasgow

People (1) Population Change over Time
Aberdeen City and Shire’s population has grown faster than the Scotland average over the 10 years 2005 to 2015, although both lag behind the rate of growth in Great Britain of 7.8%. The population of Aberdeen City and Shire continued to increase slightly faster than the rate over the previous year ( ), +0.6% compared to +0.5% in Scotland. Population Change over Time Source: Mid-Year Population Estimates Aberdeen City and Shire Scotland 2005 446,260 5,110,200 2006 450,800 5,133,100 2007 456,850 5,170,000 2008 460,860 5,202,900 2009 466,040 5,231,900 2010 471,160 5,262,200 2011 476,110 5,299,900 2012 480,470 5,313,600 2013 484,840 5,327,700 2014 489,450 5,347,600 2015 492,310 5,373,000 Change 46,050 262,800 % Change 10% 5% Glasgow

People (2) Age profile of the Region
Aberdeen City and Sire has a younger age profile than the Scotland average. This is driven by growth of the age band since (+25%, 13,900) compared to Scotland ( +12%.) The region has also seen a lower decline in the age band than Scotland (-5% versus -16%.) However, it has seen higher growth of the 65+ age band (+19%, 13,100) than Scotland (+18%). Overall, the working age population of the region increased by 29,600 over the 10 years to 2015. Age profile of the Region Glasgow

People (3) Population Projections (2014-2037)
Aberdeen City and Shire’s population is projected to grow more quickly than in Scotland as a whole to (+21% compared to +8%). The working age population is also projected to grow compared to a national fall (+11% compared to -4%). Over the longer term, the age structure of the region’s population is projected to become older, with a higher rate of 65+ projected than Scotland Aberdeen City and Shire Scotland 2014 488,036 5,346,120 2015 492,115 5,365,420 2016 496,286 5,385,719 2017 500,648 5,406,997 2018 505,159 5,429,012 2019 509,724 5,451,660 2020 514,325 5,474,391 2021 518,952 5,497,079 2022 523,602 5,519,588 2023 528,251 5,541,816 2024 532,878 5,563,670 2025 537,479 5,585,040 2026 542,052 5,605,814 2027 546,581 5,625,892 2028 551,040 5,645,150 2029 555,447 5,663,541 2030 559,793 5,681,121 2031 564,072 5,697,808 2032 568,287 5,713,523 2033 572,422 5,728,318 2034 576,515 5,742,297 2035 580,559 5,755,558 2036 584,590 5,768,217 2037 588,601 5,780,371 Change 81,201 434,251 % Change 21% 8% Glasgow

People (4) Net Migration
There has been variable net migration into Aberdeen City and Shire in recent years. Between 2010/11 and 2011/12, net migration decreased from 4,462 to 3,233, before increasing slightly between 2011/12 and 2013/14 to 3,453. Between 2013/14 and 2014/15 net migration decreased sharply to 2,071. The age band with the highest net migration in 2014/2015 was (1,779), partly reflecting the region’s age profile and its attractiveness as a place to work and study. Net Migration Source: National Records of Scotland Source: National Records of Scotland Glasgow

People (5) Travel to Work (2011 Census)
There are significant levels of out-commuting from Aberdeenshire into Aberdeen City, which reflects that Aberdeen City is the major regional employment centre. 40% of those employed and living in Aberdeenshire work in Aberdeen City, which reflects a significant level of out commuting. Aberdeen City is the most self-contained labour market, with 90% of those employed working locally. Travel to Work (2011 Census) Please note, location of employment figures exclude those working outside the UK, on offshore installations or with no fixed place of work Glasgow

Inflow of workers - number Outflow of workers - number
People (6) The workplace population of Aberdeen City at the time of the last Census was 140, 815, and of these workers, 63% were resident in the City (89,223). A lesser number of Aberdeen City workers were commuting from elsewhere in Scotland into the City (48,087). Overall, there was a net flow of workers to Aberdeen City of 39,011. By contrast, there were more than 43,000 workers in who commuted out of their local authority area to work. Travel to Work (2011 Census) Note: Currently not available in the Data Matrix Council area of workplace Total workplace population Lives and works in the area Inflow of workers - number Outflow of workers - number Net flow of workers Works in the area but lives elsewhere in Scotland Works in the area but lives in the rest of UK Lives in the area but works elsewhere in Scotland Lives in the area but works in the rest of the UK Within Scotland From the rest of the UK Total Aberdeen City 140,815 89,223 48,087 3,505 9,076 311 39,011 3,194 42,205 Aberdeenshire 70,873 57,873 12,125 875 43,475 468 -31,350 407 -30,943 Please note, location of employment figures exclude those working outside the UK, on offshore installations or with no fixed place of work Glasgow

9. Aberdeen City & Shire: Labour Market
The functioning of the labour market is influenced by labour market participation. Those unemployed or economically inactive will not be directly contributing to the economic success of the region, although their situation may be temporary, or indeed those inactive may be learning and studying and be a future contributor to the region. In this section: Age composition of workforce Economic activity Qualifications Participation Unemployment Glasgow

Labour Market (1) Economic Activity Rates Economic Inactivity Rates
Aberdeen City and Shire’s economic activity and inactivity rates have remained relatively stable between 2005 and 2015, between 81% and 84% for activity and 15% - 18% for inactivity, both better than Scotland’s rates. The best levels (81% and 15%) were reached in Scotland’s rates have remained stable throughout, staying at 77-78% and 22-23% respectively. Economic Activity Rates Economic Inactivity Rates Source: Annual Population Survey Glasgow

Labour Market (2) Qualifications
The highest level qualifications of the resident working age population is a useful barometer of skills attainment levels. There remains a cohort in regional economies with no formal qualifications which used to be associated with older workers. Jobs increasingly require higher levels of qualification, including so-called entry level jobs. The increasingly qualified working age population in Aberdeen City and Shire is illustrated, with 47% now qualified to SCQF Level 7-12, compared to 43% for Scotland. There is a lower proportion of the working age population with no qualifications, 5% compared to the Scotland average of 9%. Qualifications Source: Annual Population Survey Source: Annual Population Survey Glasgow

Labour Market (3) Participation
The Participation Measure is a new measure which provides the ability to identify the status of the wider cohort – not just those who have left school. Participation of young people aged in Aberdeen City and Shire was higher (92%) than the Scottish rate of 90%. Participation Source: Skills Development Scotland Aberdeen City and Shire Scotland Number % Total Cohort (16-19) 18,323 Participating (16-19) 16,778 92% 90% Education 12,751 70% 71% Employment 3,798 21% 17% Other Training & Development 229 1% 2% Not Participating (16-19) 603 3% 4% Unemployed Seeking 423 Unemployed not Seeking 180 Unconfirmed Status (16-19) 942 5% 6% Glasgow

Labour Market (4) The way unemployment is measured is changing with the introduction of Universal Credit. As such, the data is regarded as ‘experimental’ and care is needed when comparing to previous data (all regions have recorded a fall in claimant count unemployment under the new measure). Unemployment – Claimant Count (includes Universal Credit) – experimental measure Source: Job Seekers Allowance Aberdeen City and Shire Scotland Great Britain May 2005 470 12,760 115,375 May 2006 415 13,265 141,970 May 2007 350 12,490 145,310 May 2008 185 7,825 99,735 May 2009 285 10,320 123,545 May 2010 435 20,870 252,170 May 2011 590 20,340 203,195 May 2012 1,100 35,725 378,480 May 2013 965 38,090 410,710 May 2014 605 29,470 310,865 May 2015 340 19,145 197,275 May 2016 565 16,515 158,520 Glasgow

10. Aberdeen City & Shire: Skills Challenges
Employers can have difficulties accessing the skills they need, skills deficiencies can be amongst those they are seeking to recruit and amongst those in their existing workforce. Skills shortage vacancies (SSVs) relate to the skills shortages amongst those being recruited, and skills gaps are a deficit within the existing workforce. The 2015 UKCES Employer Skills Survey provides timely data in relation to these and other issues. In this section: Skills shortages Skills gaps Recruitment activity Skills under-utilisation Glasgow

Skills Challenges (1) Skills Shortages
The UKCES Employer Skills Survey 2015 indicated that across Aberdeen City and Shire skills shortage vacancies were in line with Scotland at 0.8%. Hard-to-fill vacancies due to skills shortages accounted for 1.2% of the workforce, compared to 1.1% across Scotland as a whole. In all, 8% of establishments in Aberdeen City and Shire reported at least one hard to fill vacancy, this was higher than the 6% across Scotland. Skills Shortages Source: UKCES Aberdeen City and Shire Scotland Hard to fill vacancies as % of workforce 1.2% 1.1% Skills shortage vacancies as % of workforce 0.8% Glasgow

Skills Challenges (2) Skills Gaps
Skills gaps occur when employers think their employees lack some of the skills required to be fully proficient at their job. Around 7% of the workforce in Aberdeen City and Shire had a skills gaps compared to 5% nationally. Aberdeen City and Shire businesses reported more skills gaps than the Scottish average. Skills gaps particularly prevalent in sales and customer services staff in Aberdeen City and Shire 65% of employers with a skills gaps say there is an impact on the business (70% nationally) Skills Gaps Source: UKCES Glasgow

Skills Challenges (3) Recruitment Challenges Skills Under-utilisation
Overall, 52% of Aberdeen City and Shire businesses had recruited staff in the year prior to the 2015 UKCES survey, this was in line with the national average. The number of vacancies was below the Scottish average with 17% of employers in Aberdeen City and Shire having at least one vacancy. In addition, 31% of employers in Aberdeen City and Shire have staff who are under-utilised, which is slightly lower than the national average. Recruitment Challenges Skills Under-utilisation Source: UKCES Glasgow

11. Aberdeen City & Shire: Schools Data
The number of young people at school and projected school roll numbers are important as those at school will form part of the future labour market. The destination of those leaving school also has an impact on the labour market, as young people might enter employment, education and training, or none of these after school. In this section: School roll numbers School roll projections School leaver destinations Glasgow

Schools Data (1) Secondary School Roll Numbers and by Year Group
There were 23,026 secondary school pupils in Aberdeen City and Shire in The region had slightly lower proportions of S6 pupils (10% v 12%) than Scotland. There were higher proportions of S2 and S4 pupils in Aberdeen City and Shire than Scotland (both 19% v 18%) Secondary School Roll Numbers and by Year Group Source: Scottish Government Pupil Census Aberdeen City and Shire Scotland S1 4,213 50,813 S2 4,315 49,514 S3 4,124 50,197 S4 4,331 51,078 S5 3,677 45,817 S6 2,366 33,936 Total Pupils 23,026 281,355 Glasgow

Schools Data (2) Secondary School Roll Number Projections
Based on the latest available projections (2012), secondary school roll numbers in Aberdeen City and Shire are projected to increase by 3% up to This is compared to a 2% drop in numbers for Scotland in the same period of time. Secondary School Roll Number Projections Source: Scottish Government Pupil Projections Aberdeen City and Shire Scotland 2014 22,800 282,800 2015 22,500 278,000 2016 22,400 275,300 2017 22,600 275,100 2018 23,000 277,900 Glasgow

Schools Data (3) School Leaver Destinations
From 2013/14 to 2014/15, Aberdeen City and Shire had no change in school leavers entering a positive destination. More school leavers in the region entered a positive destination compared to the national average. The proportion of Aberdeen City and Shire leavers entering Higher Education increased by one percentage point between 2013/14 and 2014/15; this was in contrast to a two percentage point decline across Scotland. School Leaver Destinations Source: Scottish Government School Leaver Destinations Dataset 2013/14 2014/15 Aberdeen City and Shire Scotland Positive Destination 93% 92% Higher Education 37% 39% 38% Further Education 23% 24% 25% Training 1% 3% Employment 31% 28% Voluntary Work 0% Activity Agreement Unemployed Seeking 5% 7% 6% Unemployed Non-Seeking 2% Unknown Glasgow

12. Aberdeen City & Shire: Skills Provision
There is a wide variety of skills and learning provision available which is designed to meet the future skills needs of the economy. Amongst this is the provision commissioned by Skills Development Scotland, notably via the Apprenticeship family of products (Modern Apprenticeships, Foundation Apprenticeships and Graduate Level Apprenticeships) and the Employability Fund and delivered by approved training providers including Colleges, Universities and Private training providers. In this section: Modern Apprenticeships by participant characteristic and framework grouping Foundation Apprenticeships Graduate Level Apprenticeships Employability Fund and Certificate of Work Readiness starts Glasgow

Skills Provision (1) MA Total Number of Starts
Modern Apprenticeships (MA) help employers to develop their workforce by training new and existing employees. For individuals, an MA lets them earn a wage while gaining a qualification. MA uptake in the region and nationally was at a peak in 2011/12. The number of MAs in Aberdeen City and Shire has since decreased annually to 2015/16. In Aberdeen City and Shire, 52% of apprentices were aged 16-19, slightly higher than the national picture (50%). MA Total Number of Starts MA Starts 2015/16, by Age Glasgow

Skills Provision (2) MA Starts by Gender 2010-2016
The gender divide in MA uptake in Aberdeen City and Shire was slightly wider than the national picture over the period 2010/11 to 2014/15, however in 2015/16 when the region had greater MA uptake from female participants than the national picture. In 2015/16 the representation of disabled individuals in MAs across Scotland remained low, 4% of individuals starting an MA had a disability however 19% of the working age population in Scotland had a disability. MA Starts by Gender MA Starts by Disability Glasgow

Skills Provision (3) MA Starts by Ethnicity 2015/16
The uptake of MAs in the Aberdeen City and Shire Region had a similar mix of ethnicity to the overall national picture. Only 1% of MAs had a Black Minority and Ethnic (BME) background. This level of participation is well below the overall BME working population in Scotland of 3.1% (APS 2014). MA Starts by Ethnicity 2015/16

Skills Provision (4) The most popular Framework group for MAs in Aberdeen City and Shire was Construction & Related (includes trade such as plumbing and joinery), which was also one of the most gender segregated groups with 98% male starts. Other male dominated groups included Automotive (97%) and Engineering & Energy related (92%). Females accounted for the greatest proportion of MAs in Personal Service (includes hairdressing) (95%), Sport, Health & Social Care (89%) and Administration & Related (88%). Modern Apprenticeship Starts by Framework Group and Gender Note: figures rounded to the nearest 5, figures less than 5 have suppressed. Percentages have been calculated on unrounded figures. Glasgow

Skills Provision (5) MA Achievement Rates 2010/11- 2015/16
MA achievement rates give the proportion of MA starts who completed their apprenticeship, gaining their target qualification and reaching work-based learning aims. Achievement rates in Aberdeen City and Shire have been consistently below the Scottish average but have been improving over time and in 2015/16 were at the highest rate (75%) and only one percentage point behind the national average. MA Achievement Rates 2010/ /16 Glasgow

Skills Provision (6) Foundation Apprenticeships (FA) were developed to help school pupils gain work experience and access work-based learning. S4 and S5 students spend time at college or with a local employer, and complete the FA alongside other subjects like National 5s and Highers. The qualification takes two years and can lead to employment or further study at college or university. FAs were piloted in some regions in 2014 and participation has grown over the past three years. The data shows uptake from the past two years and anticipated uptake for 2016/18. Foundation Apprenticeships, National Uptake 2014/ /18 Foundation Apprenticeships In 2016/18, the national uptake of FAs is expected to be over 300. In 2016/18 there are eight frameworks available, linked to six key sectors: Business Skills, Civil Engineering, Engineering, Financial Services, IT Hardware, IT Software, Social Services CYP, Social Services & Healthcare SDS aims to make FAs part of every secondary school’s offer by 2020. Glasgow

Skills Provision (7) Graduate Level Apprenticeships Future Development
Graduate Level Apprenticeships (GLAs) provide work-based learning opportunities up to Master’s degree level for employees. They have been created in partnership with industry and the further and higher education sector. Graduate Level Apprenticeships Future Development GLAs are currently available in: ICT/Digital: Software Development ICT/Digital: IT Management for Business Engineering: manufacturing and Design Civil Engineering Over the course of 2017 the intention is to expand the offer to include: Business and Management SCQF Level 10 Engineering (Instrumentation, Measurement and Control SCQF Level 10) IT and Digital (Cyber Security SCQF Level 10) IT and Digital (Digital Media SCQF Level 10) Life Sciences SCQF Level 10 Children and Young People SCQF Level 8 Glasgow

Skills Provision (8) The Employability Fund (EF) supports locally delivered services that are designed to encourage unemployed people to move towards work. SDS administers the EF on behalf of the Scottish Government*. The uptake of EF starts in Aberdeen City and Aberdeenshire represented 3% of the total participants in Scotland. Females accounted for proportionately fewer starts in the region compared to the national average (23% vs. 36%). Employability Fund Starts 2015/16, Total and by Gender *All data provided relates only to SDS funded activity. As other entities administer EF programme the data will not reflect total participation Glasgow

Skills Provision (8) The Certificate of Work Readiness (CWR) addresses the challenge that young people have of gaining work experience and workplace skills prior to entering the labour market. The CWR provides young people with 190 hours of work experience and an assessment from an employer to certify that they have established workplace competencies. In 2015/16, 3% of all individual starts were from Aberdeen City and Shire. Whilst 5% of employers involved in the scheme were located in the Aberdeen and Aberdeenshire. Certificate of Work Readiness 2015/16, Starts and Employers Glasgow

13. Aberdeen City & Shire: College Activity
Colleges provide a range of opportunities for all students, regardless of prior achievement, from access courses to degree level qualifications to meet national, regional and local economic needs. Qualifications include National 4 & 5s, NQ, HNC, HND and Degrees. Colleges also provide qualifications towards Foundation and Modern Apprenticeships. Data in this section relates to enrolments at North East Scotland College and was provided by Scottish Funding Council (SFC). In this section: College activity by age and gender Travel to study: location of students College activity by subject Gaelic language activity College activity: FE/HE Outcomes and destinations Glasgow

College Activity (1) 2015/16 college enrolments
In 2015/16, there were 21,475 enrolments at North East Scotland College, 8% of all enrolments across Scotland. Most enrolments were on part-time courses, similar to the trend nationally. Both regionally and nationally, the 25+ group was the largest overall in terms of enrolments. This age group accounted for 19% of full-time enrolments and 54% of part-time enrolments. This suggests that college activity is characterised by older students on part-time courses and younger students on full-time courses. 2015/16 college enrolments 2015/16 college enrolments by age Note: Unless otherwise stated all data is for total college enrolments Glasgow

College Activity (2) 2015/16 college enrolments by gender
Nationally in 2015/16, females (51%) accounted for slightly more enrolments than males (49%). This was also true of North East Scotland College, with a slightly wider gender gap (53% female, 47% male). In terms of home area, the majority of students (66% of enrolments) came from within Aberdeen City and Shire. However, the college had more enrolments from students outside the UK than the national average (1% vs. 0%). 2015/16 college enrolments by gender 2015/16 college enrolments by home area Glasgow

College Activity (3) College enrolments by SIMD
The Scottish Index of Multiple Deprivation (SIMD) measure shows that in 2015/16 a lower proportion (5%) of college enrolments at North East Scotland College came from the 10% most deprived areas, compared to Scotland as a whole (15%). Compared to colleges across Scotland, North East Scotland College had proportionally more enrolments in Higher Education (HE) (21% vs. 18%) and fewer in Further Education (FE) (79% vs. 82%). College enrolments by SIMD College enrolments by HE/FE Note: Further Education (FE) refers to courses leading to qualifications up to SCQF level 7. Higher Education (HE) refers to courses at SCQF level 7 and above. Glasgow

College Activity (4) Of the 21,475 enrolments at North East Scotland College, over one quarter (27%) were in Science, Technology, Engineering and Maths (STEM) subjects. The proportion of full-time and part-time enrolments that were in STEM subjects was broadly similar, 29% and 27% respectively. Nearly half of the males enrolled in the college studied a STEM subject, whereas the figure was much lower for females (8%). Mechanical Engineering had the greatest number of STEM enrolments in 2015/16 and accounted for more than one third (35%) of all STEM enrolments. College enrolments - STEM subject and mode of study Ten largest STEM subject areas by total enrolments Glasgow

College Activity (5) Engineering was the largest subject area in terms of full-time enrolments at North East Scotland College in 2015/16. It was also one of the most gender segregated subjects with males accounting for 91% of those studying the subject. Across Scotland, Care was the largest subject area by full-time enrolments. Regionally, gender segregation was greatest in Hairdressing (99% female) and Construction (92% male). Science was the most gender equal subject area (50:50). College enrolments by full-time subject, total and % male, female Glasgow

College Activity (6) In 2015/16, similar to the national picture Care had the greatest number of part-time enrolments at North East Scotland College. This subject accounted for almost a third of all part-time enrolments in the region. Gender imbalance was greatest in Construction (94% male) and Hairdressing (94% female). On the other hand, Hospitality and tourism was the only part-time subject to have a gender balance (50:50). College enrolments by part-time subject, total and % male, female Glasgow

College Activity (7) Gaelic FE enrolments
Enrolment of students on Gaelic FE courses varies considerably across the country. The Highlands & Islands had the greatest uptake, with enrolments increasing by 14% from 2014/15 to 2015/16. Gaelic uptake across other regions is mixed, with nine regions, including Aberdeen City and Shire reporting no Gaelic college activity. Overall Gaelic enrolments across Scotland increased by 12% from 2014/15 to 2015/16, rising from 1,260 to 1,405. Gaelic FE enrolments Note: Data is institution rather than resident-based Glasgow

College Activity (8) 2015/16 FE student outcomes
In 2015/16, 67% of North East Scotland College FE students successfully completed their course. This was higher than the 66% success rate achieved across Scotland. In terms of destination (2014/15), 16% entered employment and 72% of learners progressed onto additional education or training including higher level study or Modern Apprenticeships. 2015/16 FE student outcomes 2014/15 college destinations Note: Completed partial success indicates that a student completed the course but did not gain the qualification. This also includes students who gained employment before finishing the course or transferred to another course. Glasgow

14. Aberdeen City & Shire: University Provision
Scotland has strong university provision with more world-class universities than any other country by head of population. There are five universities in Scotland that are ranked in the world’s top 200 (2015 Times Higher Education rankings). Scotland’s universities play a major role in developing a skilled workforce. In Aberdeen City and Shire, the University of Aberdeen, Robert Gordon University and SRUC Aberdeen provide educational opportunities to residents and also attracts students to the region. Data in this section was provided by the Scottish Funding Council (SFC). In this section: Study destination for region’s residents Students numbers within the region by gender, age and home area Subject choice Student graduation by level Student destinations by employment and industry Glasgow

University Provision (1)
There were three Higher Education Institutions (HEIs) in Aberdeen City and Shire in 2014/15. These were the University of Aberdeen, Robert Gordon University and the SRUC Aberdeen campus. The largest institution was the University of Aberdeen which accounted for over half (53%) of university students in the region. Students at HEIs in Aberdeen City and Shire 2014/15 Note: Unless otherwise stated, data on this and subsequent slides is institution, not resident based and refers to university campuses located in Scotland and excludes study with the Open University Scotland, campuses outside of Scotland and incomplete records

In 2014/15, the number of students at HEIs in Aberdeen City and Shire was the same (0% growth) to the previous year and comprised 13% of the Scotland total. Across Scotland HE students numbers grew by 1%. The gender split was 57% female and 43% male uptake, similar to the respective national uptake of 58% female and 42% male across Scotland. 2013/14-14/15 total student number 2014/15 HEI students, by gender Glasgow

In 2014/15, the largest student cohort by age at university campuses in Aberdeen City and Shire were those in the age range. This was similar to the national picture. Universities in Aberdeen City & Shire attracted broadly similar proportions of students from within the region and elsewhere in Scotland. Universities in the region had proportionally fewer students from elsewhere in the UK compared to the national trend and a slightly greater proportion from outside the UK. 2014/15 university students, by age 2014/15 university students, by home area Glasgow

In 2014/15, residents of Aberdeen City and Shire studied at a number of Higher Education Institutions across Scotland. Within the top 5 were two local institutions - Robert Gordon University and the University of Aberdeen. The Open University was also a popular choice for Aberdeen City and Shire residents and attendees from the region represented 10% of the total Open University uptake across Scotland. Top 5 universities attended by Aberdeen City and Shire residents 2014/15

In 2014/15 at university campuses in Aberdeen City and Shire, Business and Administrative Studies accounted for the greatest proportion of students (15% of total) and this was also the case across Scotland (14% of total). Subjects Allied to Medicine, Engineering and Social Studies were the next largest subject areas by student enrolments. 2014/15 total enrolment of students at HE Institutions, by subject Glasgow

In 2014/15, 63% of students who studied at HEIs in Aberdeen City and Shire, graduated with a first degree. The remaining 37% achieved a postgraduate qualification. Which was very similar to the national trend with 65% of all Scottish graduates completing a first degree and 35% completing a postgraduate course. Universities in the region accounted for nearly all (78%) of students in Scotland that graduated with another undergraduate qualification, although absolute numbers are low. 2014/15 university graduates by level of study Glasgow

Data on this and the following two slides was provided by the HESA Graduate Destinations Survey which surveys a sample of Higher Education Institutes graduates six months after leaving university. In 2014/15, the majority of graduates from HEIs in Aberdeen City and Shire entered full-time work (63%), which was slightly higher than the percentage nationally (61%). Of those surveyed 3% were unemployed, which was below the national trend (5%). 2014/15 university graduates by employment status Glasgow

In 2014/15, graduates from universities in Aberdeen City and Shire went on to work in a range of occupations. The largest percentage (46%) were engaged as professionals and the smallest percentage (0.4%) as operatives. Proportionally more graduates from HEIs in Aberdeen City and Shire went to work in higher level occupations compared to the trend nationally. 2014/15 university graduates by occupation Glasgow

In 2014/15, graduates from university campuses in Aberdeen City and Shire worked in a wide range of industries. The largest group entered the health and social work sector (16%) closely followed by education (14%) and professional, scientific and technical activities (9%). This is similar to the national profile of industry destinations. 2014/15 university graduates, employment by industry Glasgow

15. Aberdeen City & Shire: Jobs and skills changes
This section will outline forecasted changes in employment from 2015 to 2024, and the nature of changing demand for qualifications in specific occupational areas. It will also consider longer term changes in the labour market and future expansion and replacement employment demand. In this section: Forecasts demand for jobs and how these may change Changing occupational and qualification demand Long-term changes in the labour market Glasgow

Jobs and Skills Changes (1)
Total employment (jobs) is forecast to remain relatively flat over , compared to 0.2% growth each year on average across Scotland. Accommodation and food services and transportation and storage are expected to enjoy growth of 4,400 jobs and 2,900 jobs respectively over the period The financial and construction sectors are also expected to growth, creating 1,700 and 1,000 jobs. However such gains will be offset by falling employment within the manufacturing sector and public administration and defence. The number of jobs within manufacturing is expected to fall by almost 6,000 over the forecast., whilst those in public administration and defence are forecast to fall by over 3,000 jobs. Forecast Demand for Jobs ( ) Total Employment Growth Aberdeen City & Shire Employment % annual average change Change in total jobs (‘000s), Note: chart uses total employment (jobs) rather than total employment (people). The former figure will be higher as a person can have more than one job. Source: ONS / Oxford Economics Glasgow

Growth is forecast to be strongest in elementary occupations over the period (1,300 people). Growth is also forecast in caring, leisure and other service occupations (900 people), sales & customer service occupations (700 people) and professional occupations (300 people). However, the number of workers in process, plant and machine operatives and skilled trades occupations in Aberdeen City and Shire is expected to fall by around 900 and 800 people respectively. Associate professional and technical occupations and managers, directors and senior officials are also expected to fall over the forecast whilst administrative and secretarial occupations are expected to show little change. Forecast Changes in Occupational Demand Aberdeen City & Shire Employment Change in number of workers (‘000s), Note: chart uses total employment (people). Source: Oxford Economics ‘000s Glasgow

The majority of openings in Aberdeen City and Shire over the forecast will require individuals with higher level qualifications, in part a reflection of the sectoral and occupational trends expected over this period. Individuals qualified to SCQF level 7 or above will account for 60% of the 86,700 openings expected to be created between 2016 and The remaining opportunities will mainly be for individuals qualified to SCQF levels 5-6, equivalent to 30% of openings over the forecast period. The net requirement at these levels, however, will be driven solely by replacement demand. Forecast employment change by Qualification ( ) Notes: table uses total requirement (people) totals may vary from previous slide due to rounding within the body of the table Source: Oxford Economics Glasgow

Replacement demand will result in over 87,000 openings within Aberdeen City & Shire over the forecast. Expansion demand is expected to fall by 400 between Together with replacement demand, this will result in 86,700 openings over this period. Openings will be highest in professional occupations, driven by replacement demand. The total requirement for workers in elementary occupations and sales and customer service occupations is also expected to rise significantly over the period in which both are expected to experience expansion and replacement demand Forecast Demand for Jobs ( ) Notes: table uses total requirement (people) totals may vary from previous slide due to rounding within the body of the table Source: Oxford Economics Glasgow

16. Aberdeen City & Shire: What are the key implications?
The Regional Skills Assessments provide the national policy context, the national economic picture and trends and the regional position. The regional perspective covers in some depth the demand for skills, current and forecast, as well as skills activity in place to meet these needs. There is a wide range of data, with further data available in the accompanying data matrix. This final section draws out some of the key implications for improving the performance of labour markets. These are not solutions for partners, but rather implications from the analysis upon which skills investment planning decisions can be made. In this section: Review of the demand for skills Review of current skills activity to meet need Key implications for skills investment planning and recommended focus for action Glasgow

Aberdeen City & Shire: Headline Summary (1)
. Key Labour Market Changes and Dynamics The downturn in the oil and gas sector, the driving force for regional employment and GVA growth over recent years, is starting to show through in the economic data. The number of jobs fell by 3% in 2015, following four years of jobs growth, a loss of some 11,500 jobs. There have been more job losses in 2016, although the scale of these is not yet known. The oil and gas downturn has resulted in 3,300 job losses directly in production, 600 in professional, scientific and technical services and 1,600 in construction. This is already affecting services, with 900 fewer jobs in retail, and 1,800 in business administration and support. There are also 1,500 fewer jobs in health, although accommodation and food services jobs increased. There remain some 59,000 employed in production, 20% of all jobs, twice the proportion for Scotland. There are also 39,000 employed in the professional, scientific and technical sector, also twice the Scotland average representation. The health sector is third largest in employment terms. Glasgow

. Key Labour Market Changes and Dynamics (continued) Although the oil and gas sector job have been the most significant, there have also been 800 job losses in agriculture, forestry and fishing, affecting Aberdeen-shire. All occupations were affected by redundancies in 2015, except for elementary occupations (unchanged) and sales and customer services, where employment increased. Professional occupations and manager/senior officials have been less affected by job losses than associate professionals, administrative and secretarial, skills trades, care and leisure occupations and operatives. A downturn in the oil and gas sector has far reaching consequences across employment groups. The 2016 deprivation index is based on data from previous years, and so the oil and gas sector downturn is not reflected in the data. The 2016 index shows relative deprivation in the region falling further, from already low levels, although there are pockets of deprivation concentrated in Aberdeen City. The new measure of unemployment including Universal Claimants has shown falling claimants across Scotland and in most regions – this is not the case in Aberdeen City and Aberdeenshire, where claimants increased by two thirds in the year to May 2016. Glasgow

. Skills Challenges Over the 10 years to 2015, the population of the region increased by 10%, and 2014-based projections anticipated 21% growth to 2037, two and a half times the Scotland forecast increase. The challenges facing the oil and gas sector, and sectors dependent on it, may dampen these projections. Until recently, there was a very tight regional labour market. More employers than the Scotland average were reporting hard-to-fill vacancies, which represented a higher than average proportion of the workforce. Skills under-utilization was less commonly reported. The tight labour market also resulted in skills gaps in most occupations, notably sales and customer services, and professionals. In these occupations in particular employers reported in-work skills gaps – these will be those most vulnerable to redundancy given the regional economic downturn. Glasgow

. Skills Activity to Meet Current and Future Demand Work-based learning is critical to meeting skills development needs. There were 1,961 MA Starts in 2015/2016, a reduction from the previous year and reflecting a general fall in numbers since 2011/2012. This reflects the region’s challenges in increasing work-based learning through MAs. The top five MA frameworks largely reflect the composition of the regional economy – construction, hospitality & tourism, health and social care (with sport), engineering & energy, retail & customer services. Other services including ICT professionals and financial services are modestly represented, particularly so now given the need to diversify the regional economy. There is a continuing gender imbalance in many MA frameworks and MAs are still not commonplace in some sectors, such as the Creative Industries. Glasgow

. Future Trends There are expected to be 400 fewer jobs in the region by This belies significant changes expected within the jobs market. Further losses are expected in oil and gas (mining) of 10,000, whereas increases are expected in the professional, scientific & technical services (+5,300) and administrative & support services (+2,900). Despite minimal net change in overall jobs, replacement demand means that 87,000 openings are expected to Half of these will be SCQF level 7 and above and 90% will be level 5 and above. This reaffirms the need for a strong skills base. The greatest number of openings will be in elementary occupations, professional occupations and sales, although replacement demand means there will still be openings in all occupations. Glasgow

Aberdeen City & Shire: Key Implications (1)
. Recommended Areas of Focus Responding coherently and rapidly to the employment (and people) impacts of the economic downturn and position the region to make the most of the new opportunities. Job losses in the oil and gas sector have been swift and significant following the 2015 fall in global oil prices. 10,000 more jobs are forecast to go and the region will need to compensate for these lost jobs. Diversifying the employment base is a priority as is retaining and anchoring people, skills and work in the region to support the economic transition and meet future opportunities. Creating high quality of jobs. In diversifying the economy there must be a focus on professional services and occupations to ensure lost higher value added jobs are replaced. These are forecast growth sectors for Scotland. Develop a culture of employer investment. Employers will need to invest and innovate, which includes investment in skills to increase their competitiveness and develop new markets. Skills gaps suggest there may have been a certain under- investment in the workforce in recent years. The supply of skills must also be available to satisfy increased and stimulated demand. Glasgow

. Recommended Areas of Focus Maintain levels of more enterprise. A key route to the creation of new jobs is to increase the start-up rate and business density. Business birth rates have been consistently above the Scotland average, and it will be important to sustain this. The specific needs of the oil and gas sector will need to continue to be met. There will be challenging times ahead for the sector, yet production still accounts for almost 60,000 jobs, and skills can help to maximise sector productivity. Sectorally, there is a need to meet the needs of employers (1). There are other key sectors and occupations in the regional economy where replacement demand is strong, including sales and administration & support services. These require work-based learning routes into, and upwards, within sectors. Sectorally, there is a need to meet the needs of employers (2). This also includes the health and social care sector. The population is ageing and increasing. It has been challenging to attract sufficient numbers into the public sector, including the health service during the period of growth. Glasgow

. Recommended Areas of Focus A need for progression routes and pathways. Demand for skills in the region is strongest at the upper and lower skills levels – professional and elementary occupations – and so progression to upper skills levels needs to be engendered and facilitated. This is linked to employer investment in skills. Repositioning the skills system to reflect a changing economic structure which includes: Recognising the region’s Universities and Colleges as major assets; and Broadening and re-aligning the provision of work based learning and apprenticeships. A need to support re-skilling. There are many who were working in the oil and gas sector who have out-dated, or the wrong skills for other sectors. Whilst many skills will be transferable, others will need retrained and/or to develop new skills. Glasgow

. Recommended Areas of Focus A need for flexible provision. Non-permanent employment is increasingly a feature of the Scotland economy and more of the future jobs are expected to be part-time. Non traditional employment also means less conventional career paths, and movement between sectors. Skills provision must be equally flexible, and work-based learning is a feature of this. A need to meet the region’s infrastructure needs. This will require adequate construction, engineering and professional skills given anticipated levels of Aberdeen City Region Deal and other investment. Tackling gender imbalances in the sector can be part of meeting these needs. Improving our understanding of the labour market. Transition will necessitate the need for ongoing evidence on the skills needs of the regional economy. De-cluttering the landscape is necessary as will be co-designing solutions and joining up decision making, putting delivery and accountability in the right places. Glasgow

. Recommended Areas of Focus In addressing these recommended areas of focus partners, in developing and implementing the Regional Skills Strategy, will prioritise around four key thematic objectives: Continuing to support the ongoing restructuring of the oil and gas sector and ensuring that the appropriate number, level and type of skills are available to support the industry in the future. Providing resources to support the growth of the identified key economic growth sectors in line with the identified economic priorities. Providing ongoing support to volume employment markets including Health and Social Care, Public Sector and Construction. Delivering on the Governments inclusion and young people’s agenda. Glasgow

Appendix: Explanation of Sector Trends and Specialism diagram
The Sector Growth diagram allows three pieces of sector information to be displayed, providing a useful overview of the local economy. The diagram includes: Sector size (in terms of employment) – shown through the relative size of the dot representing the sector. Sector concentration relative to the Scottish average – The level of concentration is illustrated on the vertical axis through the Location Quotient. The Location Quotient is a measure of the concentration of industry in an area compared to the national average. It produces an index whereby a score of 1 indicates the industry employment concentration is the same both in the local area and nationally, more than 1 represents a higher concentration and less than 1 a lower concentration. Sector average annual growth rate – The horizontal axis shows the average annual employment growth rate of each sector over the past five year period. The diagram includes four quadrants: Top right quadrant - sectors that have shown employment growth and are more highly concentrated in the local area than the national average Bottom right quadrant – sectors that have shown employment growth but are less highly concentrated in the local area than the national average Top left quadrant – sectors that sectors that have shown employment decline and are more highly concentrated in the local area than the national average Bottom left quadrant - sectors that sectors that have shown employment decline and are less highly concentrated in the local area than the national average Click here to go back to the main presentation: Where are the Jobs (3) - Sector Specialisms

Regional Skills Assessment 2016

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