The impact of the pandemic on business activity, labour mobility and apprenticeship numbers, combined with changes to the UK’s immigration system, have contributed to this challenging environment. However, our recent survey, conducted for the CIPD by YouGov, shows there are clear gaps in what employers are doing to address the problem, and some remarkably low levels of awareness of key Scottish skills initiatives that could be of help.

The aim of this report is to shine a light on some of the experiences and perceptions of employers in Scotland in relation to skills development and training, and to offer a series of conclusions and recommendations in six key areas:

• labour and skills shortages
• employer approaches to training
• relationships with training providers
• young people and work
• apprenticeships
• Scottish skills initiatives.

Key findings

• The biggest gaps in recruitment, as well as for existing employees, are in technical, vocational and specialist skills. This underlines the crucial importance of apprenticeships and further education in meeting the skills demand of organisations.
• There is a considerable lack of awareness of some key Scottish skills initiatives, with over half of all Scottish small businesses surveyed never having heard of a single one of the nine initiatives offered.
• There is an increased willingness to hire apprentices and upskill employees, which presents a golden opportunity for public policy to harness this. More funding for apprenticeships and boosting upskilling opportunities, alongside better awareness of existing schemes, should be a priority.
• There is evidence that the Apprenticeship Levy has not had the desired impact, with less than a third of levy payers saying they increased their spending on training as a result of its introduction.
• Over half of employers who recruited directly from school felt that young people were poorly prepared for work. Bringing employers and the education system closer together can result in benefits for young people as well as organisations’ talent pipelines.
• Employers who implement strategic skills interventions – for example, conducting a workforce planning exercise, putting a training plan in place and having a training budget – report a better understanding of skills in their organisations and feel better prepared for the future.
• There is a strong relationship between organisations who report adequate people management training and their understanding of skills and future preparedness.