Skills shortages: the meaning and consequences of barriers to growth

17 Jul 2019 Ryan Miller    Last updated: 25 Jul 2019

Photo by sol on Unsplash
Photo by sol on Unsplash

The third sector employs more than 50,000 people in Northern Ireland. However, organisations say they struggle to find suitable candidates for new jobs. Brexit won’t help.

 

NICVA’s latest workforce survey was published at the end of June – and 7% of all NI jobs are with community and voluntary organisations.

An estimated 53,620 people work in the third sector. As well as all the good work done by charities, social enterprises and the like, it boosts the local economy in a straightforward way as a major employer.

The workforce survey is part of NICVA’s State of the Sector tracking initiative, a rolling series of research that records the size, scope, finances and nature of the NI third sector.

The latest survey asked questions about recruitment. These questions also measure growth and the responses highlight a problem emblematic of issues with the Northern Irish economy in general, and something that will be exacerbated by Brexit.

Over a quarter of organisations (26.2%) did not recruit in the 12 months prior to answering the survey. Obviously that means most did hire over the year but that does not mean this process was seamless.

All organisations (whether they recruited or not) were asked to list the problems and barriers they face in recruitment. The three most common all related to the potential workforce pool.

A lack of suitably qualified candidates was cited by 58.6% of organisations, an insufficient number of applicants by 44.8%, and a lack of suitably skilled applicants by 41.3%.

All kinds of orgs

The sector is a broad church. 21% of organisations have an annual income of under £10,000, for around 19% it is £10k to £50k, it is just over 13% each for brackets of £50k to £100k and £100k to £250k.

Just over 15% have income between £250k and £500k, around 6% are between £500k and £1m, over 10% bring in from £1m to £5m and, for just over 1%, income is above £5m.

There is also a wide range of areas in which organisations work.

Around 56% say their work relates in some way to health and wellbeing. Almost 50% say they are in community development, with a similar figure saying they help with education and training. Over 40% say their work relates to community relations, while over 35% say they work with young people (and a similar figure works with older people), over 30% work with children, just under 30% work in the arts – and so on.

The key thing here is how this dovetails with the statistics about recruiting staff.

The NI third sector has small organisations and medium-sized organisations and large organisations. They work in health, and in education, and the arts, and with children and young people and older people.

There are all sorts of organisations. With so many citing each of the three workforce-pool shortcomings – lack of qualified staff, lack of skilled staff, lack of applicants full stop – there has to be a concern that this is reflects an endemic issue with potential workers in Northern Ireland.

Unfortunately, this is not news.

What growth means

The lack of a skilled workforce as a barrier to growth is one of the mantras of the Northern Ireland economy (along with low productivity – a related issue – and high economic inactivity).

Often this is couched in the context of the private sector, which is true enough, but this problem can affect any employer looking for staff.

Brexit is only going to make this worse. Membership of the single market includes freedom of movement of labour which means all organisations in Northern Ireland have access to all workers entitled to live in the European Union (with its population over half a billion people).

Of course, the single market removes some barriers but there are practical aspects that remain in place.

Workers living in Lodz or Timisoara might tick all the boxes for an opening in Upper Bann but that doesn’t mean the employers of Craigavon should be expecting a flood of applications from all over Europe.

The positive effects for employers are much more gentle. Nevertheless, they exist.

A total of 13.4% of all third-sector organisations in NI employ someone from the Republic of Ireland, while 14.3% employ an EU national who is from outside the UK and Ireland.

Brexit and the future

Brexit, presumably, will be done by Christmas, even if what is meant by ‘done’ is still being worked out.

Although the rights of EU nationals who currently live and work in the UK are yet to be copper-fastened, it seems very unlikely these people will simply disappear.

The real issue will be with recruitment. This “barrier to growth” is set to grow.

When talking about this, it is important to set out what this actually means. First of all, it means less of the good work done by the third sector. Secondly, there is the impact from the absence of jobs, and the attendant wages and taxes, from the local economy.

It is also important to say that this is not some big Remoaner Brexit whinge. We are currently members of the EU (and the single market) and have been for decades – and, yet, Northern Ireland still has workforce-skill issues.

Yes, Brexit seems very likely to make this worse, but simply being EU members is no solution either.

The third sector – indeed, the entire NI economy – has a problem it needs help to address. Some creative thinking is required.

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