Scottish employers share skills challenges

“Keeping talent local: How Scottish employers can retain and invest in their communities” was the focus of a recent roundtable event hosted by The Open University (OU) in partnership with the Dundee & Angus Chamber of Commerce. Held in Dundee, and hosted by the chamber’s CEO, Alison Henderson, this was the third in a series of five OU roundtables in different locations around the UK.

A range of employers (small, medium sized and large), representatives from local educational institutions and business leaders came together for the event to talk about the findings of the OU’s latest Business Barometer report, their experiences of the local skills landscape and the challenges facing them now and in the future. The report was released in partnership with the British Chambers of Commerce (BCC) in 2022.

An ongoing skills shortage

The Business Barometer is a UK-wide report which provides analysis on the business landscape in each of the UK’s four nations. This latest report shows that Scotland is suffering from an acute and ongoing skills crisis, much like the rest of the UK. Marie Hendry, the OU in Scotland’s Depute Director (External Engagement & Partnerships), welcomed guests and shared some of the report’s key findings, which include:

70% of Scottish organisations participating in the report are currently facing skills shortages, a rise from 62% the previous year
77% say their organisation’s output, profitability or growth has been reduced due to skills shortages
84% say skills shortages have increased the workload of staff
53% plan to increase their investment in staff training in order to overcome skills shortages and address recruitment issues

Scotland Roundtable discussion

There were some common themes running through the event, and in particular the mismatch between what employers want and what employees entering the workplace want.

There was a big conversation around young people, with many local employers saying they are not work-ready.
Tim Lewis
Business Relationships Manager, The Open University in Scotland

Creating a talent pipeline

Scotland’s economy relies heavily on hospitality and tourism, but organisations are struggling to recruit and retain the skills they need. And because turnover is typically high, some employers have been reluctant to invest in training staff. That attitude is changing however, according to those at the roundtable. Employers increasingly recognise that they need to invest in workforce skills and build up a local pipeline of talent, even if that talent moves on after a couple of years. “It’s about developing the skills of the future, whether it’s training new recruits and getting them up to speed or reskilling and upskilling existing staff,” says Tim. “And accepting that it’s okay for people to move on. There will be a natural cycle to your workforce and they may come back and they may become ambassadors for your company.”

The need for clarity on funding

Another issue that that was evident during the roundtable was a lack of clarity around funding for training. The Scottish Government has provided a number of schemes and development opportunities, and this includes the OU’s Flexible Workforce Development Fund programme which offers training grants of up to £5,000 for SMEs and £15,000 for larger employers. But employers told us they don’t always understand how to navigate the funding landscape. “That is a big barrier to making use of some of the training,” says Tim.

One of the other main takeaways from the event is that employers and training institutions need to work more closely together to increase the local talent provision and ensure that young people are leaving education ready for work and engaged with business needs.