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Skills shortage costing STEM sector £1.5bn

Published: May 17, 2018 4 min read

STEM learning

STEM employment

  • current shortfall of 173,000 skilled workers as 89% of STEM businesses struggle to recruit
  • new STEM roles expected to double in next 10 years: businesses warn of economic impact if skills shortage continues
  • STEM Learning calls for businesses to join its efforts to grow the future STEM workforce

UK STEM businesses have warned of a growing skills shortage as they struggle to recruit qualified workers in science, technology, engineering and mathematical fields.

According to new findings from STEM Learning, the largest provider of STEM education and careers support in the UK, the shortage is costing businesses £1.5 billion a year in recruitment, temporary staffing, inflated salaries and additional training costs.

The STEM Skills Indicator1 reveals that nine in 10 (89%) STEM businesses have found it difficult to hire staff with the required skills in the last 12 months, leading to a current shortfall of over 173,000 workers - an average of 10 unfilled roles per business.

The findings come as the UK is entering the ‘Fourth Industrial Revolution’2, a time of significant technological, economic and societal change, along with a Brexit outcome that remains uncertain, and severe funding challenges in schools.

As a result, the recruitment process is taking much longer for the majority (89%) of STEM employers – an average of 31 days more than expected – forcing many to turn to expensive temporary staffing solutions (74%), hire at lower levels (65%) and train staff in-house (83%) or inflate salaries (76%) by as much as £8,500 in larger companies to attract the right talent.

Almost half (48%) of STEM businesses are looking abroad to find the right skills, while seven in 10 (70%) are hiring candidates without a STEM background or simply leaving positions empty (60%).

Businesses are concerned about the outlook too. Over half (56%) expect the shortage to worsen over the next 10 years, with expansion in the sector set to nearly double the number of new STEM roles required.

Employers are concerned that the UK could fall behind other countries in terms of technological advancement (54%) or lose its research and development credentials (43%), while others warn a lack of talent could put off foreign investment in the sector (50%).

Building the future pipeline of skills will therefore be key to maintaining the UK’s standing in the STEM sector. Low awareness of the jobs available (31%) and a lack of meaningful work experience opportunities (35%) are identified by businesses facing recruitment challenges as key barriers to young people considering STEM careers.

In a rapidly changing technological environment, the UK government is planning to invest over £400 million in mathematics, digital and technical education3, but businesses will also need to start investing in a sustainable pipeline of talent now.

Nearly one in five STEM businesses (18%) that are finding it difficult to recruit admit that employers need to do more to attract talent to the sector. STEM Learning is therefore calling for businesses to join its efforts to inspire young people in local schools and colleges and help grow the future workforce.

Yvonne Baker, Chief Executive, STEM Learning said:

“We are heading towards a perfect storm for STEM businesses in the UK - a very real skills crisis at a time of uncertainty for the economy and as schools are facing unprecedented challenges.

“The shortage is a problem for employers, society and the economy, and in this age of technological advancement the UK has to keep apace. We need to be in a better position to home grow our talent but it cannot be left to government or schools alone – businesses have a crucial role to play too.

“STEM Learning bridges the gap between businesses and schools. By working with us to invest in teachers in local schools and colleges, employers can help deliver a world-leading STEM education, inspiring young people and building the pipeline of talent in their area, making it a win-win for everyone.”

View our executive summary or email employer@stem.org.uk to find out how you can help reduce the skills shortage.


Notes to editors

Research conducted by PCP Market Research among a nationally representative sample of HRs and senior decision makers at 400 businesses in STEM industries (excluding micro-businesses) across the UK, between 20th and 30th April 2018.

Klaus Schwab, Founder and Executive Chairman, World Economic Forum, 2017

3 The Government’s UK industrial strategy, Dec 2017