More than three-quarters (79 per cent) of businesses expect to increase the number of higher-skilled roles over the coming years. Yet two-thirds (66 per cent) fear that there will be a lack of sufficiently skilled people to fill vacancies.

That’s according to the 2018 CBI Education and Skills Annual Report, in partnership with Pearson.

The report represents 28,000 businesses and reveals that 85 per cent of firms are expecting to maintain or increase investment in training in their workforce. Currently UK employers spend £44.2 billion on training expenditure each year.

When asked about the impact of the apprenticeship levy, the report highlighted a drop in the number of firms offering apprenticeship programmes (from 83 per cent in 2017 to 70 per cent in 2018). Worryingly, 59 per cent of those firms that offer such programmes have experienced difficulty in recruiting apprentices or expect to do so in the next three years.  And over a quarter (26 per cent) have taken the decision to absorb the levy as an added cost of doing business.

Business engagement with young people in education reduced from 81 per cent in 2017 to 75 per cent in 2018.  Encouragingly, two-thirds of respondents (65 per cent) want to play a greater role in supporting schools and colleges.

John Cope, CBI Head of Education and Skills Policy, said:

“This year’s survey shows the scale of the challenge to address skills gaps, with two-thirds of businesses deeply worried that there aren’t enough sufficiently skilled people to fill vacancies.

“Yet there’s room for optimism.  The vast majority of firms do expect to maintain or even increase their investment in staff training, as well as increase the number of higher-skilled roles over the coming years. This is the first time since 2014 that these numbers have been so positive.

“Policymakers, business, the education sector and the CBI all have their role to play, in helping the two-thirds of companies wanting to support schools and colleges.”

Technical education is highly valued by firms, but requires urgent improvement

Businesses are committed to making the apprenticeship levy and T-levels work. Ongoing reform of the levy announced at Budget 2018, as well as collaboration with companies on T-levels and retraining reflects long-standing business advice and will help people adapt to the fast-changing world of work.

Firms look forward to working with the Government in the lead up to the Spending Review to agree how the apprenticeship levy can evolve into a more flexible ‘skills levy’.

Links between business & education remain strong, but progress is stalling

Effective business-school and college partnerships have a key role to play in raising levels of academic attainment and helping young people develop their careers.

Survey results show that the top three ways businesses currently engage include visiting schools (83 per cent), offering information about apprenticeships and traineeships (70 per cent) and giving careers advice and talks (68 per cent)

The top two reasons firms struggle to engage with schools include 48 per cent of firms say that there is too little guidance/support on how to make encounters worthwhile for young people.

47 per cent find processes difficult and time consuming (including DBS checks and health and safety requirements) and 81 per cent of employers indicated that readiness for work is one of their three most important considerations when recruiting school and college leavers.

Higher education must meet the UK’s future skills needs critical for global competitiveness

A successful post-18 education system must prepare all our young people, regardless of background, for the changing world of work.  It must also provide the opportunity for those already in work to retrain and upskill.

Survey findings show 87 per cent of businesses that employ graduates have maintained or increased their levels of graduate recruitment over the last year.

54 per cent of those firms with ties to higher education have increased their engagement over the past year, with just 6 per cent cutting back.

There’s fresh impetus to re-skill existing workforces & instil a culture of lifelong learning

While it has been common practice to encourage employees to continue learning and developing throughout their careers, it’s now essential to upskill and retrain employees to stay competitive with technological advances changing the nature of work. Businesses will need to incorporate a culture of lifelong learning to provide training and development opportunities that meet the demands of the future.

The survey found that 62 per cent of firms are expecting to retrain at least some employees to take up new roles in the year ahead, with over half of those businesses identifying new technologies or new services driving the need to retrain

Nearly nine in ten (87 per cent) anticipate upskilling employees in their current roles during next 12 months.

The single most common driver behind upskilling is the need for employees to acquire new skills/knowledge to raise productivity (reported by 74 per cent) followed by the introduction of new technologies or services (63 per cent).

John Cope, CBI Head of Education and Skills Policy, said:

“Automation, AI, and increasing use of technology is changing our world of work, so our education system must keep pace. The workplace into which today’s pupils emerge is unrecognisable from a generation ago. Many of the companies transforming the world today didn’t even exist 5 or 10 years ago.

“The Government, the CBI and the TUC have an unmissable opportunity through the National Retraining Partnership to address this.”

REC chief executive Neil Carberry said:

“Recruiters are Britain’s jobs experts, and what they tell us about skills shortages is reflected in this new survey from the CBI (which confirms the increasing need for more skilled people). Availability of skilled candidates is already tight, so improved investment in education and training from government and employers is essential, alongside a pragmatic approach to post-Brexit immigration.

“Last week’s Budget provided some welcome progress on the Apprenticeship Levy – and careers advice changes have quickened – but the pace of reform is too slow. The Levy needs reform now to deliver the skilled workforce this research shows we need – including opening up support to temporary workers.”

Read the full CBI Education and Skills Annual Report





Rebecca joined the HRreview editorial team in January 2016. After graduating from the University of Sheffield Hallam in 2013 with a BA in English Literature, Rebecca has spent five years working in print and online journalism in Manchester and London. In the past she has been part of the editorial teams at Sleeper and Dezeen and has founded her own arts collective.