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Graduate recruitment

STEM Scholarships are the Answer to the Long Term Skills Shortages

Ciaren Diante

UK Skills Shortages and the Need for Scholarships

construction.jpgIn recent years, the UK employment market has seen a steady shift in its balance of labour, as workers move away from the industrial sectors in favour of more service-oriented jobs.  

The job market is still growing in the UK, but shifting tides have created a crisis in recent years. As more and more workers leave the industrial sector in favour of more service-oriented jobs, this trend of de-industrialisation has resulted in the largest skills shortage in recent memory, and it’s interfering with the post-recession economy’s ability to rebound.

To put this in historical perspective, back in 1948, manufacturing accounted for 41% of the UK’s GDP – in 2015, that number has dropped to 10%, according to the Guardian. Conversely, in the same period of time the services industry has grown from about 46% to over 77%.


How Are Skills Shortages Affecting the Market?

Despite the fact that industrial losses have been balanced elsewhere, the lack of skills has been pervasive. Indeed, 45% of businesses report a skills shortage among current employees, and 66% are now having trouble recruiting adequately skilled workers, according to KPMG.


Unfortunately, this seems to be a trend with no real end in sight - according to a recent CBI survey, about 68% of companies expect their demand for skilled workers to grow in coming years, but 55% fear that they won’t be able to meet that demand. At this rate, it’s only a matter of time before the UK’s economy falls behind other countries with prioritised skilled labour training.

Which Sectors are Suffering the Most?

Over 40% of businesses report trouble finding graduates with adequate STEM skills, and naturally, related fields are struggling with recruitment. For example, over 400,000 skilled workers have left the construction industry since 2008 – at least 35,000 new entrants are needed in order to meet current demand.

Perhaps the hardest hit sector is engineering, which seeks to find at least one million new engineers by 2020 – in order to achieve this lofty goal, the industry will need to double its current yearly output. As it stands, there is a deficit of roughly 55,000 UK engineers each year.

Manufacturing is another area that has been affected – approximately 80% of firms have had difficulty recruiting the right candidates, and a full 30% of current positions remain unfilled.

What’s Behind the Shortage?

While the skills crisis is, in part, a product of the natural ebb and flow of evolving markets, many companies and sectors have failed to adequately invest in training and apprenticeship programs. Since the 1990s, these vital breeding grounds for best-fit candidates have fallen by up to 44%. And according to the British Chambers of Commerce, while 78% of companies think investing in training programs is important, only 39% of companies plan to invest more than £500 per employee for training.

At the same time, many skilled graduates may not even be aware of demand in their particular sector upon graduating. Shockingly, 42% of graduates have not researched entry level job availability in their field whatsoever, and 36% aren’t sure if their sector is recruiting for entry level positions at all.


How Is the Government Addressing the Issue?

The government is currently taking an active approach to stimulating the job market, and Secretary of State for Education Nicky Morgan has explained the concrete steps behind the plan to close the gap.

By offering teachers bursaries and increasing STEM scholarships by up to £40,000, the aim is to increase STEM student numbers by 50% over the next three years. This will be complemented by the addition of 32 math hubs across the UK, backed by £11 million in funding. Moreover, £8 million will be allocated towards creating a network of science centers and partnerships to improve the quality of education in this area.

By enhancing the link between schools and employers, the government hopes to increase students’ knowledge about their various vocational opportunities. Efforts will be made to increase the number of outside speakers at schools, provide workplace visit funding and enhance the mentoring of at-risk students. Moreover, students will be encouraged to pursue 12 month internships and apprenticeships as an alternative to university study, engage in more meaningful on-the-job training and receive more English and maths instruction if they’ve yet to meet the required standards.

But these plans are still in their infancy, and today, 22% of the UK’s 655,000 job vacancies remain unfilled.

How Are Industries Nurturing Talent?

Because of this, companies in some of the hardest-hit sectors have taken it upon themselves to address the widening skills gap. But many are focussing their efforts on the wrong demographics and, as a result, are making a bad situation even worse.

Today, one-fifth of all skilled jobs are filled by overseas immigrants, and nearly one third of science and maths students come from outside the UK. At the same time, just 10% of UK women work in the skilled-trade workforce. Clearly, recruiters need to reprioritise their approach to talent search and development if they want to foster a strong, next generation of skilled workers.

But in reality, it’s the businesses that are currently taking the biggest hit – many have had to raise entry-level salaries to make their industries more attractive. For example, entry-level engineering jobs at up to £35,000 per year, construction work now pays up to £1,000 per week and plumbers can expect up to £1,800 per week, according to the Guardian.


What’s not yet clear is if their efforts are actually working. Recruiters can cast their lines out all they want, but they’re never going to catch anything if there aren’t any fish left in the sea. Business investments will prove most fruitful if they increase their resources for proper outreach, apprenticeships and recruiting efforts in order to stem the tide of the skills shortage crisis.

Technology Can Help

That said, recruiters should be doing everything within their power to make the most of a difficult situation. Innovative new technologies like applicant tracking systems (ATS), video interviewing software and predictive analytics can help HR professionals recruit more effectively in the face of a limited candidate pool.

Moreover, as we begin to see government and industry-backed efforts to boost STEM education pay off, these tools will allow businesses to capitalise on the influx of tech-savvy young recruits and fill in their existing vacancies quickly with right fit candidates. Whatever the solution to close the gap and get the economy back on its feet, one thing is crystal clear: the sooner the better.

Ciaren Diante

As Launchpad's customer success director, Ciaren ensures our customers get the very best from our tool and outstanding support.