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Report on the 2014 Employer Skills Survey

Executive Summary

Since its inception Skills Guernsey has undertaken a number of workstream studies, the purpose of which has been to help to identify an overarching skills strategy for Guernsey. At the outset it was recognised that a Skills Strategy required an evidence base, both to prompt the right questions and to inform possible interventions, whether via States policy, training provision (private and public sector), employer engagement or the channeling of financial and non-financial resources.

At the start of 2014, the case was made to focus Skills Guernsey activity into two work areas - the Employer Skills Survey, reported on here, and the development of a proposal for a digital drop-in centre for the community, which has latterly become part of the 'digital greenhouse' project.

In order to deliver the first of these work programmes Skills Guernsey decided to use an experienced market research company to conduct a telephone survey and the services of BMG Research Ltd were secured (BMG conducted the UK Employer Skills Survey).

The BMG report, which is attached herewith, provides insights into island wide skills gaps and skills shortages from the employers’ viewpoint.

As with any sample based survey limited by time, money and access, it has its limitations, but detailed discussions with employers and others indicates that findings from the survey can be used to inform policy makers. The BMG report does not provide the answers; these will come from the work that follows this report, but it will help in creating an effective, informed Skills Strategy for the island.

The States of Guernsey's Commerce and Employment Department and Skills Guernsey commissioned the 2014 Guernsey Employer Skills Survey which was undertaken in July and August 2014.

The main aims of the survey were to:

• Establish the composition of the island’s workforce and its sources of labour supply

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• Examine the extent to which the Island's labour force had, to date engaged in training and the extent to which employer training provision had underpinned an island wide enhancement of skills

• Identify skills gaps, current and potential, and sources of training provision

Of these aims, the main focus is the identification of skill shortages and gaps with a view to addressing those skills gaps to increase productivity and competitiveness across the Guernsey economy and assist in reducing reliance on imported labour.

The survey consisted of 318 telephone interviews conducted with Guernsey employers in both the private and public sector. The data reported is related to the establishment at which the respondent is based rather than in the case of multi-site organisations, the entire enterprise.

Composition of the island’s workforce

Based on information provided by the Guernsey Quarterly Labour Market Bulletin of March 2014, there are approximately 1800 employers (with two or more employees) located on the island of Guernsey.

• 70% are micro-businesses, employing between two and 10 employees;

• 26% are small businesses, employing between 11 and 50 employees;

• 5% are medium to large businesses employing more than 50 employees.

In terms of the proportion of the island’s workforce that they employ, medium to large businesses account for a third of the workforce (36%) and the majority of employers (91%) operate within the private sector.

The three most significant industry sectors in Guernsey are finance (17% of employers); wholesale and retail (16%) and construction (15%). A further 10% operate in the hospitality trade.

Within the private sector the majority of the workforce is made up of managers, directors and senior officials (24%); professional and associated and technical occupations (20%); administrative and secretarial (23%); with the remainder split primarily between blue collar trades and hospitality trade employees.

The high proportion of senior and professional staff (44%) is largely driven by the constantly evolving nature of the finance industry and associated businesses as they continue to move up market away from low margin, high volume work to high margin, higher skilled business. This has been made possible by the commitment of employers and their staff to the development of knowledge, skills and specialist expertise which has seen the establishment of a highly skilled

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and in many cases professionally qualified workforce with in-depth expertise in financial administration.

The largest public sector employer on the island is the States of Guernsey which employs approximately 5,500 people. Within this sector the split is somewhat different, made up of managers, directors and senior officials (9%); professional and associated technical occupations (49%); administrative and secretarial (15%); and care and service occupations (10%).

The obvious inference from the structure of the workforce identified in the report is that Guernsey has a much higher proportion of workers employed in skilled office and technical work than would be found in a more balanced economy and therefore much higher needs for technical and professional training.

Workforce growth or reduction?

The BMG survey showed that during 2015 twenty five per cent of Guernsey’s employers expect to grow their workforce. Amongst private sector employers:

• The finance industry has seen considerable consolidation and some reduction over the last 6 years. However, of the employers who responded to the BMG survey 40% anticipated growing their workforce in 2015, with 54% expecting to remain the same size.

• The same trend is apparent in associated professional, technical and scientific businesses with 43% anticipating growth and 54% remaining the same.

• In the wholesale and retail sector, the recession, the loss of Low Value Consignment Relief (LVCR) and the growth of online shopping have undoubtedly taken a toll. Notwithstanding the negative effect of such factors on the market local traders do not appear to anticipate much further reduction, with 75% expecting their workforce to remain the same size in 2015 and 18% anticipating some growth.

• The survey sample from the construction industry was too small to draw meaningful conclusions but anecdotal evidence would indicate that reduction is more likely than growth as construction industry leaders are highlighting that there are few major construction projects in the pipeline.

• The hostelry sector anticipates a relatively stable workforce with 70% of employers expecting to remain the same size and a slightly bigger proportion of the remainder expecting growth rather than reduction.

In the public sector, education, health and public administration anticipate limited growth with 72% expecting their workforce to remain the same and 25% anticipating some growth. This is congruent with current States policy of trying to reduce State expenditure.

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Recruitment and Labour Supply

Guernsey has a limited labour market, which is significantly influenced by controls on the issuing of essential worker licenses. However despite the lingering impact of the recession over the past two to three years 75% of employers have recruited staff. As a consequence of the Island experiencing almost full-employment, there were only 343 wholly unemployed jobseekers registered as unemployed at the end of December 2014.

Most sectors expect some further recruitment, however not surprisingly the greatest demand appears, to derive from the finance and professional, scientific and technical services sectors. Available sources of labour include recruiting from within the island, school and higher education leavers, or from off-island via the essential licence route. Recruiting from within the island does not add to the pool of available skilled labour, though it does rapidly absorb any redundancies when firms consolidate. A quarter of all employers recruit school or higher education leavers, with the majority being hired by the larger employers at the 17-18 year point. Employers report that that the degree to which education leavers are well prepared for their first job varies from not well prepared in 16 year olds to well prepared in 17-18 year olds and those coming from university or other higher education institutions. The apparent dissatisfaction in respect of the "work preparedness" of 16 year olds is a common and recurrent phenomenon across all jurisdictions and seems to be associated with their attitude and work ethic rather than their skill level. In contrast employers are generally pleased with the 17- 18 year old school leavers and above that they recruit. Of those employers surveyed 14% reported difficulty in recruiting from the local available workforce due to skills shortages in technical and job specific skills. This is not particularly surprising given a limited pool of available labour. A quarter of all employers have had to recruit via the licence route to acquire the particular skills/experience that they needed, with the majority of these again being the larger companies. This is likely to continue as companies continue the drive to higher value work and as the creative/digital sector in Guernsey grows. Due to stiff competition in the labour market and the limited period for which licences are normally available hostelry, education, health and public administration report the greatest difficulty in retaining staff.

Labour Force Training

It is worth recognising that Guernsey's economy did not experience the same post 2008 downturn in growth that other jurisdictions did and consequently in experiencing some labour and skills supply shortfalls, the island is ‘the victim of its own success’. Such problems tend to be more prevalent in strong economies with the obvious point being that it is difficult, at any one time and place, to achieve a perfect balance between labour and skills demand and supply. It is

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therefore vital that the island and its businesses are able to train (and re-train as business evolves and new businesses emerge) the workforce to meet current and future needs. The survey showed that the majority of employers have some if not all of the key infrastructure to achieve this in place, with 81% using detailed job descriptions; 64% having appraisal systems and 54% using training plans. In addition nearly half of the employers who took part had training budgets. 61% of those surveyed provide on-job training, and 65% provide off-job training with at least some of that coming from off-island sources. Half of all employers who train make use of online training and this may be an aspect which could be expanded in the future. It is evident that the vast majority of Guernsey employers are putting considerable effort into training their workforce - three quarters (76%) of employers had arranged training for staff in the last 12 months. Of the 8% with staff who are not fully proficient in role, partially completed training and being new to the role are the main reasons. Amongst those employers who had not provided training, by far the most common reason for not doing so was that staff were already fully proficient i.e. there was no need for further training. However, there may be a requirement to better understand how those regarded as “fully proficient” are contributing to business growth and also preparing themselves for longer working lives as a result of changing demographics and pension age changes. Sources of On-Island Training

The majority of off-job training provided on-island is sourced via three routes:

• Professional qualification training for a wide range of professions has been brought into the island by the relevant professional bodies which now provide on-island qualification courses, many in concert with the GTA University Centre. The Institute of Health and Social Care Studies forms the training and education arm of the Health and Social Services Department. It provides a range of education and training opportunities in response to the health and social care needs of the Bailiwick.

• The GTA University Centre has developed into a unique facilitating institution for sourcing a wide variety of training, ranging from professional qualifications and specific technical knowledge and skills to a variety of soft skills. Through its accreditation as a University Centre by Bournemouth University it has been able to provide for the delivery of post graduate and undergraduate degree courses on-island.

• The College of Further Education provides tertiary education, in both academic and vocational subjects, as well as CMI management qualification training, flexible learning IT training and certificated courses, and various adult education courses. The CFE also runs the States Apprenticeship Scheme, training 70 or so students per year in a variety of trades.

In addition there are private training companies providing training in a range of subjects from IT to soft skills and executive coaching.

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Satisfaction with local training was generally high. When employers were asked to identify specific gaps in local provision, the wide range of types specified, with no single clear focus of demand, illustrated the considerable difficulty in cost effectively supplying the variety of diverse training opportunities for small cohorts which would be needed to satisfy those who were currently dissatisfied.

Interestingly, the majority of the areas of training most frequently mentioned by employers as lacking on the island are actually available through one or other of the above sources. This suggests that more work may be required by providers to raise employer awareness of what is available and the benefits of the investment in training. Cross Sector Themes

There is no scientific way of consolidating the diverse outputs from the survey and the subsequent discussions with employers but it may still be useful to offer some views on the themes that seem to apply across most sectors. This may suggest a number of cross-sector initiatives which could be explored by Skills Guernsey in the future.

• Management skills are an area which may have been neglected in the past the focus instead having been on the development of technical skills.

• Staff retention and performance management are recurring issues across sectors, but particularly in hostelry, education and health. Guernsey's finance sector is always going to attract many of the most talented and professionally qualified members of the workforce. Consequently there may be value in better understanding how organisational culture and the way people are valued relates to business prosperity, growth and job satisfaction.

• 16 year old school leavers (of which there are a relatively small number – 67 in 2014, excluding those who joined the Apprenticeship Scheme) are not viewed as well-equipped for work. It might be that a clearer understanding by both potential employees and employers of the expectations of the workplace for the youngest group of employees would assist the transition from school to employment.

• A small proportion of young entrants into the workplace can have unrealistic expectations, attitude issues and thus need close supervision. That said, 70% of 17 year olds entering the workplace from school are thought to be well prepared, which is higher than suggested by anecdotal feedback.

• Young entrants who have work experience through placements, Saturday and holiday jobs and voluntary work are much more likely to be work-ready.

• Business communication (literacy, report writing, numeracy) skills are a problem across most sectors.

• The current housing licence system is seen as a constraint on business, as is the cost of living in Guernsey.

• Sectors other than finance struggle to attract people to work in Guernsey.

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• There are skill gaps and shortages across all sectors. Taking specialist and sector specific technical skills aside, there are generic skill gaps in the areas of leadership, management, organisation, problem solving and communication skills, yet the uptake of management training ranks low in terms of training taken up in the last 12 months (Figure 6.8 in BMG report). A cursory look at training provision in these management skill areas (a full review of training provision being outside the scope of this exercise) suggests that there are plenty of on-island training opportunities. This raises the question of whether it is provision or take-up that is the issue.

• Future skill requirements will include higher order leadership, management, creativity, digital and customer service skills.

• Smaller businesses are a key part of Guernsey’s economy but often struggle to access those training opportunities that there are on-island. They are less likely to have training plans in place, have formal role descriptions, and conduct annual performance reviews (Figures 6.2 and 6.3 in the BMG report), which may be an entry point for greater engagement with training. Methods need to be found for training provision and support for training to be tailored to meet their needs (flexibility, costs, breadth of skills etc).

• Satisfaction with on-island training provision is generally high, but there is scope to look at further on-island provision, and possibly to help reduce costs for employers (Figures 6.11 and 6.13 in the BMG report)

The Next Steps

The BMG research report and consequent discussions with businesses groups and other stakeholders has provided useful information which will provide a platform for continued dialogue between Skills Guernsey, the providers of training and education and the business community. The Skills Guernsey Policy Group which comprises political representation from the Departments of Social Security, Commerce and Employment, Education and Health and Social Services have agreed that this work will be initiated and led by a consortium consisting of the key providers of education and training on the Island. The Skills Guernsey Policy Group in discussion with the Skills Guernsey Agency Consortium will agree medium and long term objectives for addressing and delivering those objectives identified within the BMG report and agree the resource requirements needed to support the Agency Consortium in the delivery of those objectives.

Deputy Allister Langlois Chairman Skills Guernsey Policy Group March 2015

t: 01481 234567 e: skillsguernsey@gov.gg w: www.gov.gg/skillsguernsey