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Distinctions must be made between overall imbalances, where individuals are effectively treated as being homogenous and, thereby, direct substitutes for one another, as well as specific imbalances, where individuals differ in the detail of their qualifications, skills, experience and quality. Thus, a distinction is made between a “numbers problem”, where there is simply not enough STEM to “go around” and, for want of a better term, a “quality problem” – while there are enough STEM to meet the demand, some proportion of those available are not suitable for the types of job available.

6.2.1 Overall Shortages

Supply and demand calculations for 2020 under both the “2007” and “2011” scenarios do not suggest an overall shortage of STEM graduates (in terms of numbers) in most regions or nations of the UK. However the baseline “2007 scenario” predicts a few shortages such as: 7,000 Med STEM graduates in the UK, 2,000 Core STEM graduates in Scotland, and 1,500 Core STEM graduates in the South East. Under the less optimistic 2011 scenario there are no overall predicted shortages. This result is mirrored in the experience of several employers interviewed, who felt that the current supply of engineers had improved due to the recession, as other employers had drawn back on recruitment.

The existence of overall imbalances is particularly sensitive to the vacancy rates in the model and there are no direct measures of STEM vacancies. The “proportional method” is the preferred way of generating vacancies for the baseline projections. Even these may be optimistic as they reflect what would happen if qualification structure remained constant within each occupation, when in fact, the empirical results suggest that Core STEM densities within the Core STEM occupations have been falling.

The vacancy measures based on the regression results produce a scenario with a considerably higher level of Core STEM demand. However, they do not seem to reflect what the data tell us in other ways. For example, calculating the vacancies for the Core STEM occupations, where STEM densities are amongst the highest, give lower vacancy rates than for other qualification groups and much lower than those suggested by the regressions.

A rebalancing of the economy towards manufacturing that is designed to produce one per cent higher employment of Core STEM in 2020 would result in a small shortage of Core STEM under the 2007 scenario (which would be further exacerbated by a higher number of vacancies).

The baseline forecast does not predict a shortage of Core STEM graduates for Core STEM occupations at the national (England) level, but there are a number of predicted shortages at the regional level that will not be resolved by commuting.

6.2.2 Specific, “Quality” Shortages

The hard-to-fill vacancy rates suggest that, even if there are no numerical shortages of STEM degree holders to go into STEM degree jobs, there is still a mismatch between supply and demand in some cases. The share of vacancies that are hard-to-fill is higher for Core STEM vacancies (in all occupations) than for vacancies overall in both the 2007 and 2011.

For example in 2007 in the East of England, 30 per cent of vacancies are hard-to-fill compared with 40 per cent of vacancies for Core STEM. When only looking at Core STEM occupations, 57 per cent are hard-to-fill in the East of England in 2007. This is consistent with some of the interviews that referred to problems of “quality not quantity” or with problems getting candidates with the right specific skills.

Despite concerns about the quality of graduates, most of the people interviewed felt that the overall quality of the UK graduates was as good as the rest of Europe. Thus, the findings of the interviews, along with those of the quantitative work, are largely consistent with the existence of specific recruitment difficulties in some STEM-related sectors where employers report insufficient UK candidates of suitable quality.

Examples can be found both in earlier reports (e.g. BIS, 2009, p. 4) and in the interviews conducted for the present report, in biosciences, engineering and IT of a number of companies reporting difficulties in finding the quality of recruits they are seeking. Interviews with employers and SSCs in certain sectors such as Engineering, certain other parts of Manufacturing and Oil and gas, revealed difficulties with recruiting engineers due to lack of supply.

However, in a number of these cases, the employers were looking for highly specialist skills, which the interviewees reported were being trained in fewer and fewer UK universities because of the need to manage costs. Fluid dynamics was reported by one employer and laboratory skills by another. In some cases only a handful of UK universities were supplying the required quality of graduates to these specialist markets.

Interviewees in life sciences expressed concerns about the quality of graduates rather than overall quantity. Others pointed to the lack of graduates with practical skills, and both life science and mathematics skills (especially in areas of bio-informatics, health economics and statistical skills). An employer in the pharmaceutical industry revealed that, although there is no overall shortage of people with relevant STEM degrees, there is a shortage of those with specific skills in the job market, and those with higher degrees (e.g. statistical skills, clinical skills). “In general terms it’s OK, but when we get down to the specifics, we find that we’re actually struggling”.34

A number of the interviewees reported that shortages were particularly acute for experienced STEM staff. For instance, an interviewee from an aerospace company reported difficulties in recruiting staff with three to eight years of experience in manufacturing and engineering; a representative from a chemical company reported losing staff after five years and problems in recruiting chemical engineers with three to six years of experience; while an interview with a pharmaceutical company revealed problems recruiting staff with specific skills such as biometric and clinical monitoring with at least two years’ experience. Interviews revealed frustration at having to train up new graduates and then having to worry about them being poached by competitors.

However, while the interviews confirm difficulties relating to the lack of applicants with the “right” STEM skills and experience in certain fields, they also result from “broader concerns about a lack of well-rounded candidates with technical skills, broader competencies, such as mathematical capability, and practical work experience” (BIS, 2009, p. 4).

The vacancy ratios for Core STEM degree holders (in all occupations) and the vacancy ratios across all Core STEM occupations as a group are not higher than the overall ratios. However, the vacancy ratios for specific Core STEM occupations (e.g. engineers) are higher than average.