The demand for higher-level skills in British industry is set to grow in the years ahead, with sectors central to future growth, including manufacturing and construction, particularly hard-pressed according to this year’s CBI/Pearson Education and Skills survey.

The survey of 310 companies, which together employ over one million people, underlines the skills challenge facing the UK. It reveals:

2 in 3 businesses (68%) expect their need for staff with higher level skills to grow in the years ahead, but more than half of those surveyed (55%) feared that they will not be able to access enough workers with the required skills

Demand for highly skilled workers is particularly strong in sectors critical to the rebalancing of the economy – engineering, science and hi-tech (74%), construction (73%) and manufacturing (69%).

Firms are reporting widespread difficulties in recruiting staff with the necessary science, technology, engineering and maths (STEM) skills, with half (52%) of firms experiencing (or expecting within three years) a shortfall of experienced staff. As a result STEM study carries a real premium with 2 in 5 employers (40%) preferring graduates to have STEM skills.

Close to half of businesses (45%) recognise foreign language skills as beneficial to them with European languages heading the list of those in demand – French 53%, German 49%, Spanish 36%.

With an apprenticeship levy for larger employers set to be introduced following the Budget, the CBI is concerned that while it may fund more apprenticeships to meet the Government’s target of 3 million, it will not deliver the high-quality, business-relevant training needed, and do little to help small or medium sized businesses.

Of apprenticeships starts in 2013/14, just 2% were higher apprenticeships, which lead to qualifications at a level equivalent to higher education. Business is clear that the Government must accelerate reforms and ensure employers are in control when it comes to the design and delivery of apprenticeships to boost quality.

Katja Hall, CBI Deputy Director-General, said:

“The Government has set out its stall to create a high-skilled economy, but firms are facing a skills emergency now, threatening to starve economic growth. Worryingly, it’s those high-growth, high-value sectors with the most potential which are the ones under most pressure. That includes construction, manufacturing, science, engineering and technology.”

“The new levy announced in the budget may guarantee funding for more apprenticeships, but it’s unlikely to equate to higher quality or deliver the skills that industry needs. Levies on training already exist in the construction sector where two-thirds of employers are already reporting skills shortages.”

Rod Bristow, President of Pearson’s UK business, said the UK needed more higher-level apprenticeships in high growth sectors like biotech, engineering, and technology.

However, he warned that the UK’s further education sector, which provides the Higher National Diploma courses that deliver these technical skills, sits on the edge of a funding precipice and may suffer damage for years to come. 

“Proper funding of further education would provide a huge boost to British businesses and productivity. Without improving the supply of skills, the UK will find it hard to remain competitive in the global economy” he added.

Click here to download the survey