Advanced Oxford – Written evidence (PSU0051)

 

Introduction and background

Advanced Oxford is a not-for-profit membership organisation with members drawn from R&D based/innovative companies working across Oxfordshire.

 

Advanced Oxford is research-led, providing analysis and a united voice for our members on the key issues affecting the development of the innovation ecosystem. We generate our own research and work to support and inform key stakeholders involved in the development of the business environment, infrastructure and policy.

 

Access to skills and talent is one of the key drivers of growth and success and is a high priority issue for our members.

 

This submission draws on research undertaken by Advanced Oxford between May and October, 2021 looking at challenges relating to the acquisition and retention of skills within innovation-based businesses in Oxfordshire. Qualitative research drew on the experience of innovation-based businesses across a range of sectors, company size and age.

 

The research report is available on Advanced Oxford’s website: https://www.advancedoxford.com/project/skills-and-talent/

 

A global labour market

Our research shows that STEM companies source talent from the widest possible talent pool, frequently looking globally for specialist roles, with a greater focus on the local labour market when required skills and experience are more readily available. While companies are keen to recruit from the locally, i.e., Oxfordshire, they struggle to do so and rely on attracting talent from across the UK. This has been facilitated in some cases by changes in working practices associated with the Covid pandemic. Many companies are now willing to accept or offer remote working and this has opened up opportunities to recruit talent, since a relocation to Oxfordshire is no longer a fixed requirement.

 

Companies pride themselves on their international outlook and celebrate the fact that they have a multinational workforce, valuing the talent and diversity that this brings.

 

Most companies benefitted from freedom of movement within the EU and have a workforce that reflects a mix of nationalities. The majority of companies still recruit from across Europe. However, many firms have seen the number of applications or interest in the UK as a destination decline significantly, which is creating difficulties in sourcing skilled and experienced staff. A significant number of companies (62%) also recruit from the global labour market. There is wide variation in terms of which countries are seen as attractive for sourcing talent. There are also some regions which are considered to be less affordable for recruitment, particularly where there are high expectations in relation to salaries, housing provision, relocation and benefits packages. A global search for talent is mostly applied to specialist roles where the overall global supply of skills is small, yet companies also indicate the need to look broadly, geographically, when they fail to identify or attract suitably qualified candidates from the UK.

 

Companies were asked to rate the impact of Brexit from a skills and talent perspective, where 1 was very negative and 10 very positive. Not all companies responded to this question, in all instances, where they had no or limited experience to draw upon. Responses to this question produced a mean response of 3.2, with a range from 1 to 7. It is also worth noting that some companies stated that it was difficult to disaggregate the impact of Brexit from the impact of the Covid pandemic and that these two issues have become conflated to create challenges in finding suitable candidates.

 

The key impacts of Brexit identified were (i) challenges in acquiring staff, (ii) extended time to recruit, (iii) additional cost. Regarding this latter point, most comments related to additional costs in acquiring visas and specialist immigration advice, but some companies had also experienced increased costs for relocation and increased salary expectations from candidates. A small number of companies stated that they had lost staff due to Brexit and a similar number also identified loss of staff due to Covid, where staff members had returned to their country of origin.

 

One respondent noted, “Visa applications are costly and also time consuming. I feel Oxford needs an advice centre that businesses can go to obtain help.”

 

Despite this generally negative view of the impacts of Brexit, it is recognised that Brexit has happened, and companies need to move forward working within the new rules and systems. It seems unlikely however, that the need to attract skills and talent from outside the UK resident labour force will decline any time soon.

 

STEM skills – challenges and future requirements

We asked companies to identify the roles that they find most challenging to fill. Respondents could identify as many roles or skill types as relevant. Some roles identified that were very specific to the mission and core technological of the company, however there were some clear areas of commonality.

 

Hard to fill roles of similar types were grouped for the analysis. Engineer was the most frequently cited role that companies struggled to fill, however, a variety of sub-types of engineers were identified, such as electrical engineer or power-systems engineer. Engineer was twice as likely to be identified as hard to fill than each of the next three groups – computer science/software engineering; data science; and specialist scientific roles.

 

Specialist scientific roles encompasses a wide range of roles, from physicists to protein biochemist to epidemiologist.

 

Our research also looked at skills that will be needed in five years’ time and how this will differ from what is required today.

 

Respondents were asked to identify as many skills or role areas as relevant. No company identified skills that would no longer be needed or would disappear. All responses therefore relate to a need to bring in new or additional skills.

 

There is a good degree of commonality between the current hard to fill roles and the roles that are expected to be in greater demand in 5 years’ time.

 

Top ranked skills/role requirements

Hard to fill roles in 2021 (rank)

Anticipated requirements (new or increased demand) in 5 years (rank)

Engineering

1st

3rd

Data science including machine learning, AI and computational roles

2nd (joint)

2nd

Computer science and software

2nd (joint)

4th

Specialist scientific roles

4th

4th (joint)

Commercial

5th

1st

Support roles

Does not appear

4th (joint)

(Table - Companies were asked to identify roles that are hard to fill in 2021, and future skill needs in 5 years’ time – this table compares the most frequently cited skills/roles across responses to each of these questions, showing commonality across both data sets)

 

Given that the majority of companies interviewed for the research had healthy growth expectations it is not surprising that the need for ‘support’ roles is anticipated to increase. However, these roles are currently relatively easy to fill, with the exception of occasional very specialist roles, such as legal counsel.

 

On the other hand, if the expectation is that there will be an increase in the requirement for scientific and technical roles, particularly engineering science, computer science, software and data and computational skills, and these roles are already difficult to fill, then we risk a deepening skills shortfall. What’s more, if companies are already looking outside the UK to fill these roles, unless there is concerted action to develop these skills within the UK, there can be an expectation that businesses will see increased recruitment costs including immigration advice, salary inflation and increasing demand for relocation support.

 

Note, the term ‘Support roles’ is used to identify roles such as finance, HR, project management and regulatory affairs.

 

The term ‘Commercial’ is used to identify a range of roles including sales, business development, marketing, and digital marketing.

 

As many businesses move towards commercialisation, or bring new products to market, there is an anticipated demand for commercially capable and competent staff and a need to upskill technical and scientific staff who can support the sales, marketing and growth of commercial companies. This suggests a need to increase provision of business skills and a role for accelerators, growth hubs, innovation support and business schools to help to build a supply the commercial skills.

 

Our research was complemented by quantitative data analysis, allowing us to examine the STEM jobs being advertised across the Oxfordshire region and providing insights on the local labour market for STEM-related jobs.

 

Data sets were provided by Adzuna[1]. Adzuna is able to provide comprehensive data on job vacancies. Two time points – 2018 and 2021 - were used.

 

The ‘Top 10’ most advertised STEM roles within Oxfordshire were identified, determined by the number of jobs within a particular role type that was advertised.

 

There are five common roles which appear in both the 2018 and 2021 ranking: Project Manager, Technician, Scientist, Engineer and Software Developer. The quantitative data showed strong alignment with the qualitative data derived from interviews with companies, with high levels of demand for STEM-based roles in these categories.

 

Are STEM graduates being sufficiently prepared for highly skilled careers?

Looking at the required educational level of most employees entering STEM roles within companies, the majority employ graduates as a minimum, with many also recruiting talent with post-graduate qualifications – Masters level, often PhDs, frequently with some post-doctoral experience. Very few companies recruit talent directly from schools or from further education routes, but where this does happen, it is exclusively into non-scientific roles.

 

A perceived difficulty for candidates with a strong academic background – having post-doctoral experience, or previous academic appointments – was adjusting to industrial/commercial environments. Recruitment processes have been adapted to respond to this issue with most companies thoroughly exploring this at interview stage. There is a good flow of academics moving into Oxfordshire-based businesses, with 73% of companies questioned indicating that they have recruited staff with an academic background.

 

One respondent noted “We really focused on assessing the level of commercial interest [in academic candidates]”

 

Some of those questioned cited this as an issue even for recruitment of graduate-level staff entering the workforce post study, where the adjustment from an academic environment to a business environment can be challenging. However, there was a sense that it is becoming easier to manage the transition between settings.

 

“The transition to industry used to be difficult, but there is more exposure to industry [in academia] so the transition is less difficult” noted another respondent.

 

Nevertheless, there continues to be some concern about the employability skills of graduates entering the STEM labour market. This is particularly a concern in relation to technical skill with candidates having experienced even less hand on, technical skill development within undergraduate courses, as a result of Covid restrictions and the shift to remote learning and loss of laboratory time.

 

Government funded initiatives

Despite the race for talent, the use of apprenticeships within knowledge-based companies is low, particularly within smaller, younger businesses. There are two main reasons why companies do not use apprenticeship training routes, (i) perceived lack of organisational capacity, and (ii) poor knowledge of apprenticeship training routes and how to get started.

 

However, there are examples of successful initiatives to drive the development and uptake of apprenticeships. The Advanced Therapies Apprenticeship Community (ATAC) has been particularly successful in this regard.

 

Set up in response to recommendations by the Medicine Manufacturing Industry Partnership Advanced Therapies Manufacturing Taskforce, the Cell and Gene Therapy Catapult set up ATAC with Gatsby funding and investment from the Industrial Strategy Challenge Fund.

 

One company anticipated that by the end of 2021, 4% of their workforce would be apprentices. The company started recruiting apprentices when the ATAC was established. Most apprenticeships are between levels 3 and 5 but the company is also using some level 7 apprenticeships as staff development. We recommend that the Advanced Therapies Apprenticeship Community model be extended to other sectors.

 

There is a clear need to look at how SMEs can be informed and educated about the opportunity to deploy apprenticeship training. This extends to thinking about how the organisational capacity issue can be addressed. For example, Oxfordshire Advanced Skills (an Oxfordshire based training provider) takes on the organisational ‘burden’ of training by delivering significant parts of training in their dedicated facility in the Culham Science Centre. On the other hand, there may be opportunity to explore how companies could work together to share the responsibility for training and supervision, although this may create difficulties at the end of the apprenticeship when it is time for the trainee to move into a permanent role.

 

Retraining

Advanced Oxford is working with Oxfordshire LEP to explore the use of ‘skills bootcamps’, funded by DfE, to retrain individuals to gain life science technical skills. This initiative may be delivered in 2023. While the proposal looks promising, it is too early to determine whether this will be a useful approach to retraining. Advanced Oxford has two main concerns, (i) whether time and resource will be provided for learners to build sufficient confidence and competence in key technical skills, (ii) the scheme appears not to be open to recent graduates who may need to build technical skills due to the lack of laboratory time within undergraduate degrees, exacerbated by Covid restrictions within universities.

 

The private sector role in training/retraining workers

Our research found that most companies had some form of HR function in house but those without tend to be younger companies with HR and recruitment coordinated by operational roles. In-house HR expertise tends to be a key hire when companies reach around 30 FTEs. It is perhaps not surprising therefore that smaller, younger companies face challenges in training their staff and developing organisational policies to train and development candidates with fewer or different skills – this is also reflected in the very low use of apprenticeships.

 

HR teams are under real pressure and recruitment is a constant challenge. There is good use of exit interviews and as a consequence, there is a good understanding of the reasons driving staff movement and turnover. Career progression and development was a common issue.

 

Smaller organisations can find it difficult to offer career progression within their company as opportunities are fewer and organisational structures are flatter. Nevertheless, there was evidence that well-funded start-up and growth companies are attracting talent through salary and role title inflation. There was some suggestion from more established companies that title inflation is used to give a sense of career progression, even if this might not be the case.

 

A number of companies were vocal about the challenges faced from active poaching of staff. In some instances, referrals are used, i.e. existing staff members suggesting or recommending a potential candidate, often with some form of reward for a successful hire. Where these informal approaches take place, it is not only likely to have a negative effect on equality, diversity and inclusion, but it also creates bad feeling within the company that is on the receiving end. While the need for a buoyant local labour market is seen as a positive attribute for the region, there is also the view that ‘we are all in this together’ and a feeling of resentment that other companies are benefitting from others’ investment in training and development.

 

Nevertheless, among larger, more established companies, there is a strong tradition of training, development and support for skills acquisition. It was pleasing to also see many companies offering internship programmes to undergraduate, graduate and post-graduate students. However, there appears to be little activity to retrain staff from outside organisations, although there is some evidence to support this happening for employees within companies, and indeed for STEM trained staff to move into other roles, such as marketing, business development and HR.

 

Work placements to build ‘science capital’

Advanced Oxford’s research looked at provision of work placements, which play an important role in engaging and informing students about STEM careers.

 

The offer of work placements was much less common than the offer of internships. However, there is no correlation between the size of the company and the willingness to provide work placements. Work placements generally appear to be much less formal than the arrangements for internships, although some companies have well established programmes and dedicated resource. In these cases, there is a clear objective of supporting STEM education and encouraging STEM-based careers. While companies may be willing to take work placements, these can be restricted to individuals who already have a connection to the company, e.g. the children of employees.

 

Science Oxford[2] provides a case-study on support for STEM work placements, and the challenge to reach students, specifically those with low science capital. Science capital is defined as the sum of all the science-related knowledge, attitudes, experiences and resources that an individual builds up through their life.

 

The national requirement is for schools to support students in obtaining work experience placements, usually at year 10. Schools following best practice, as set out by the Government’s ‘Gatsby Benchmarks’, will usually reach out to organisations, such as Science Oxford, who facilitate the logistics, communication and administration for those placements.

 

Science Oxford’s range of programmes reach over 1,000 secondary students every year and 40 different companies from across the region are engaged in supporting these activities. However, in common with the experience of many companies during the Covid pandemic, the numbers able to participate have been affected.

 

Demand from students is always high, particularly with restricted placement opportunities, however there is a distinct lack of awareness of the local labour market and current and upcoming job opportunities. Science Oxford sits in a unique position as it bridges the gap between STEM employers and schools, building relationships between industry and education. Feedback shows each interaction a student has with a STEM company or ambassador increases their science capital.

 

Given the challenges associated with STEM work placement provision in Oxfordshire, a region rich in innovation-focused companies, it is likely that this will be even more challenging in other parts of the UK. There are some good examples of work placement programmes that are open to participants from across the UK, such as those provided by Science Technology and Facilities Council at the Harwell Campus, but travel and accommodation bursaries could open this up to an even wider pool of candidates.

 

6 September 2022

 


[1] https://www.adzuna.co.uk/

[2] https://scienceoxford.com/schools/secondary-schools/stem-placements/