In a CBI/Pearson survey of 542 companies employing around 1.6 million people, 61% say school and college leavers don’t have enough self-management skills.

The number of employers who are dissatisfied with school and college leavers’ basic skills remains stuck at around a third – the same as a decade ago(1) – with 42% reporting that they have had to provide remedial training for school and college leavers.

The persistence of this finding suggests that there are structural issues within our schools that need to be addressed if we are to ensure every young person gets a good start in life. The CBI has recently launched a major project designed to address this issue.

The survey also finds that as the UK competes ever more for business and talent in global markets, employers are looking to up-skill their workforces. Over the next three to five years, employers expect to need more people with leadership and management skills (a balance of +67%) and other higher skills (+61%), whereas for lower-skilled workers, they expect to slightly cut numbers (-3%).

While half of employers (a balance of +51%) are confident that they will fill their low-skilled vacancies, they are not confident of meeting their need for higher-skilled employees (-15%).

John Cridland, CBI Director-General, said:

“The UK’s growth will depend on developing a wider and deeper pool of skills so that our economy can prosper in the face of fierce international competition for business.

“There is nothing more important to the future economic success of our country, and the lives of young people, than education.

“The foundations for the development of higher-level skills and the essentials for working life, that employers require, are laid at school.

“With the right start at school our young people can go on to have successful and fulfilling careers and have a strong base from which to learn more at college, university, or in the workplace.

“But levels of educational attainment are rising fast in many leading and emerging economies, so in the UK we must ensure that our education and skills system can continue to compete at the cutting edge.”

Rod Bristow, UK President of Pearson said:

“The connection between education and the world of work is critically important. Employers and all of us working in education have a big task to address that connection properly. Despite improvements in the past decade, employers want to see an even sharper focus on literacy and numeracy, beginning at primary school. Literacy and numeracy are the basic building blocks that help young people learn other subjects, get on in life and find rewarding work.

“But it’s not just about literacy and numeracy. Even the best-performing nations say the number one issue in education is to better equip school leavers with the broader skills needed for working life, and we are no exception. Employers still find that some young people lack the initiative, problem-solving and communication skills to succeed at work.”

“But this survey should fuel optimism that the best and brightest firms are continuing to invest in education, work with schools and colleges and maintain their own investment in training.”

Importance of school performance underlined by more businesses building links with schools

Employers recognise that they have an important role to play helping students and schools understand what skills are needed for working life. More than a third have increased their engagement with schools in the past year (+39%), while just 7% have reduced it, giving a balance of +32%.

• 57% have links with secondary schools
• 56% with further education colleges
• But only 20% with primary schools

One of the most important roles which half of all employers already carry out is providing careers advice (51%), but it’s clear that more work needs to be done in this area, with 68% saying that the general quality of advice is still not good enough. More than 60% of respondents say they would like to play a greater role in delivering careers advice.

In other areas, more than two thirds of employers (70%) provide work experience to students and around a third of employees (29%) act as governors. The survey found that some of the barriers to stepping up business involvement include insufficient guidance and support on how to make work experience placements worthwhile (26%), and onerous health and safety requirements (22%).

When asked which areas of education they think primary schools should focus on, 61% of employers said numeracy, 58% writing, 45% reading, and 42% said communication skills. For secondary schools, employers say the main focus should be on developing broader skills for working life:

• Employability skills – 71%
• Literacy – 50%
• Numeracy - 45%

But, the survey finds that no one current qualification addresses the combination of literacy, numeracy and employability requirements effectively. While employers think that for numeracy, GCSE maths is the best qualification, they say that vocational qualifications best equip young people with the broader employability skills.

Big growth in employer interest in ‘learn-while-you-earn’ approach

One in five jobs (20%) requires graduate-level skills, particularly in professional services (70%). But most employers (63%) expect increases in tuition fees to change the market for graduate-level skills, with 30% expecting to receive fewer graduate applications in the future. As a result, more than a third of firms (38%) expect to expand their recruitment of school leavers and / or apprentices with A-levels to provide an alternative to graduate-level training. Among the largest employers, with more than 5,000 staff, this figure rises to 68%.

John Cridland said:

“With extra pressure on student budgets from changes to tuition fees, more employers are stepping in to offer a range of innovative ‘learn while you earn’ routes to higher-level skills.”

Employers have increased apprenticeship places and maintained their spending on training

Since the start of the Education & Skills survey five years ago, the number of businesses involved in apprenticeships has grown rapidly from 48% to 63% this year. More than half of employers (58%) say that they intend to expand their current apprenticeship programmes or plan to start providing apprenticeship places in the next three years. This is particularly encouraging in view of the end of government funding for programme-led apprenticeships and the need for all apprentices in the future to be sponsored by an employer.

Small and medium-sized companies are still a relatively untapped market for apprenticeships. While 89% of organisations with over 5,000 staff are providing apprenticeships in 2012, this figure falls to 22% for firms with under 50 employees.

In terms of action required to get more employers involved in apprenticeships, respondents highlighted the following:

• Qualification programmes that are more relevant to business needs – 46%
• Government support for firms to train more apprentices than they need – 37%
• Greater flexibility for employers to design bespoke frameworks – 36%
• More suitably qualified and motivated young people applying – 34%
• Reductions in bureaucracy – 28%, rising to 57% for larger firms

In November, the Government announced measures to reduce the amount of red tape around apprenticeships, but so far only 6% of employers say they have experienced a change.

In the face of challenging economic conditions, the vast majority of employers (81%) plan to maintain or increase their spending on training over the coming year, but there are major differences between sectors. A balance of +17% of manufacturers say they are planning to increase spending, while -36% of public sector employers plan reductions. Two thirds of employers (67%) report that they intend to seek more cost effective ways of delivering training in the next year.

John Cridland said:

“Even in the difficult economic climate, business leaders recognise the importance of training and skills to their success and are investing now for the future.

“It’s great news that apprenticeships are on the increase, but the system must be simplified to make it easier, especially for small and medium-sized firms to be involved. The Government has set out promising plans to cut red tape for apprenticeships, but we now we need to see urgent delivery on the ground.”

Businesses need strong STEM skills to compete for growth

Recruiting staff with strong science, technology engineering and maths (STEM) skills will help underpin the UK’ ability to compete and achieve growth in many major sectors like manufacturing, construction and engineering. People with STEM skills are recruited at every level from apprenticeship entry (43%), technicians (40%) and graduates (53%). But 42% of firms struggle to find the STEM talent they require.

Businesses are well aware of the need to take steps to grow the talent pool of STEM skills, with 64% taking some action to encourage young people to pursue STEM subjects. 42% of organisations provide high-quality work placements, 39% engage with schools to encourage pupils to study STEM subjects and 35% provide STEM apprenticeships. More than two-thirds of employers (68%) think the Government can help future shortages by better promoting science and maths in schools, especially post-16.

Languages will help open up new markets to UK companies

Operating effectively in a global economy relies on the right language skills, but the UK has the worst language proficiency in Europe, according to the Education & Employer Taskforce. An overwhelming 72% of businesses say they value foreign language skills, most importantly for building relations with overseas contacts (39%). The major European languages continue to be the most in demand, but language skills geared towards doing business in China and the Middle East feature prominently:

• German – 50%
• French – 49%
• Spanish – 37%
• Mandarin – 25%
• Polish 19%
• Arabic – 19%

John Cridland said:

“Rebalancing our economy will mean tapping into high-growth markets in places like Asia and Latin America, so companies will need people with the relevant language skills to do business in these countries.”

Notes on this story

(1)- 35% are dissatisfied with school and college leavers’ literacy skills and 30% with their levels or numeracy. These figures are broadly unchanged from 2003 when CBI data showed that 34% were unhappy with the basic skills of school leavers.

The CBI is the UK's leading business organisation, speaking for some 240,000 businesses that together employ around a third of the private sector workforce. With offices across the UK as well as representation in Brussels, Washington, Beijing and Delhi the CBI communicates the British business voice around the world.