1. Regional Skills Assessments
Aberdeen City and Shire Region
December 2016
Aberdeen City and Aberdeenshire

2. Introduction An Introduction to Regional Skills Assessments (RSAs)
Key Data for Aberdeen City & Shire
Implications for Skills Investment Planning

3. An Introduction to RSAs

4. What are RSAs?
A single, agreed evidence base on which to base future investment in skills, built up from existing datasets
Partnership between Skills Development Scotland (SDS), Highlands and Islands Enterprise (HIE), Scottish Enterprise (SE), the Scottish Funding Council (SFC) and the Scottish Local Authorities Economic Development Group (SLAED).
Purpose:
Support SFC, regional colleges, strategic bodies and college boards in negotiating Regional Outcome Agreements (ROAs) for academic years
Provide a framework for aligning SDS investment in individuals and businesses
Assist partners in planning their strategic investment in skills
Highlight gaps in national and regional skills evidence

5. Why are they important for skills planning?
They provide a high quality and consistent source of evidence about economic and skills performance delivery at various spatial levels.
They can be used to identify regional strengths and any issues or mismatches arising, and so inform thinking about future planning and investment at a regional level.
They are accessible online to support all partners in their planning.
They provide a core evidence base to support the Scottish Skills Planning Model.

6. Scottish Skills Planning Model

7. What do RSAs cover?
Economic Performance, Profile of the Workforce, People and Skills, Education and Training (MAs and Schools), Other Economic Activity, Skills Mismatches and Forecasting
Underpinned by the 2016 data matrix of seven workbooks, containing data on over 100 social and economic indicators
With data at various spatial levels: Regions; City Region Deal; Local Authority
The matrix only draws upon official datasets (including APS, BRES, UKCES, UK Business Counts, Census, Scot Gov datasets) and partner data (SFC, SDS, SE, HIE).
The data matrix is found here:
This slide pack provides a summary of the data for this area

8. Aberdeen City & Shire Overview
An area of historically high wage levels and strong employment opportunities but facing the challenges of oil and gas downturn
Relatively distant from the central belt but with well developed air services for business travel
Contrast of a city with a specialism in oil and gas and Aberdeenshire where primary industries are important to many areas

9. Business Trends
Growth in business numbers in 2015 was below the national level for the first time since 2010 (4.9% v. 7.3%)
+1,090 to 23,320 businesses in 2015
Largest increases in Professional Scientific & Technical (+ 360) and Business administration & support services (+ 250)
98% of businesses are small or micro (<50 employees) as per Scotland, but lower in Aberdeen City (96%); 100 businesses employ 250+
474 businesses per 10,000 population, compared to 313 in Scotland
Self-employment slightly below Scottish average (9.1% v. 10.8%)
More than half (58%) Aberdeen City and Shire businesses are in Growth Sectors (47% nationally), the highest number (13,560) and percentage of all 13 regions (2015)
Aberdeen City and Shire has a greater proportion of Growth Sector businesses in Financial and Business Services than nationally (43% v. 35%), and fewer in Tourism (8% v. 18%)
37% of employment, the highest in Scotland, is in Growth Sectors (28% nationally)
BERD is £411 per head, compared to £169 nationally and £309 UK wide (2014)
Aberdeen City and Aberdeenshire

10. Sector Trends and Specialisms
Exceptional employment growth in two large, highly specialised sectors – production and professional, scientific and technical, although recent downturn in oil and gas may reverse this trend
Good growth in visitor economy, although again oil and gas difficulties may impact on future growth
Significant job losses in two national Growth Sectors – finance and insurance and information and communications
Note: SIC Section A: Agriculture, Forestry and Fishing omitted as data for farm agriculture (SIC subclass 01000) is not available sub-nationally
Click here for explanation: Explanation of Sector Trends and Specialism diagram
Aberdeen City and Aberdeenshire

11. Population and Projections
Population of 492,000
9.2% of Scotland total
Growth similar to national trend (0.6% v. 0.5%) but much higher between 2005 and 2015 (10% v. 5%)
Population change :
Total Increase of 46,000 people between 2005 and 2015, including growth in all three age groups
Forecast Population Growth, :
Population forecast to increase by 21% (101,000 people) compared to 8% growth in Scotland
Aberdeen City and Shire working age population forecast to increase by 11% (36,500 people) compared to a fall of 4% nationally – only Edinburgh is forecast to see faster growth

12. Employment and Travel to Work
79% of working age residents are in employment, higher than the Scotland rate of 73%
Place of Work of Residents, by Local Authority:
Almost three quarters of residents in the Aberdeen City and Aberdeenshire region work within the area
The majority of Aberdeen City residents work in that area
A large proportion (40%) of Aberdeenshire residents work in Aberdeen City
Please note, location of employment figures exclude those working outside the UK, on offshore installations or
with no fixed place of work
Aberdeen City and Aberdeenshire

13. Workforce Trends Total employment in Aberdeen City and Shire = 297,600
5.2% increase , compared to 3.2% nationally and 2.7% across GB, the second highest rate of employment growth in Scotland
Higher growth rate than Scotland since 2010
44% work in higher level occupations (2015)
Above Scotland average (42%) with a slight fall (<1%) from 2014
84% work in private sector, well above the Scottish rate of 77%
Aberdeenshire has the highest rate of private sector employment (84%), Aberdeen City second highest (83%)
26% of those in employment work part-time, same as for Scotland
3.9% are in non-permanent employment, well below the rate for Scotland (5.4%)
Note: Data on total employment relates to 2014, having been prepared in advance of 2015 BRES release.
Aberdeen City and Aberdeenshire

14. Unemployment and Participation
Unemployment has fallen each year since 2012, in line with national trends.
Participation rates amongst young people above the Scottish average, with only 3% not participating
Unemployment currently stands at 3.2%, notably lower than the national (5.9%) and UK averages (5.4%) The region has had a greater percentage point fall than Scotland over the period (-1.1ppt v. 0.4ppt)
The unemployment rate in the region was below the national average (3% v. 6%), unemployment fell by -1.1ppts which was greater than the national decline (-0.4ppts) from 2014 to 2015
Within the region the unemployment rate was highest in Aberdeen City (4%) and lowest in Aberdeenshire (2%)
Aberdeen City and Aberdeenshire

15. Qualifications and Skills
An increasingly highly-skilled workforce, with a growing proportion holding higher level qualifications:
Increase of 13 percentage points in the proportion holding levels 7-12 since 2005
The proportion with no qualifications has fallen faster than the national average, with a 6.0% decline
More Aberdeen City and Shire working age adults hold SCQF qualifications at levels 7-12 than is the case nationally and UK wide (37%):

16. Skills Mismatches
More than half (52%) of Aberdeen City and Shire businesses have recruited staff over the past year (2015), slightly below the national average (53%)
Skills shortages are as prevalent as they are nationally
0.8% of employers report vacancies that are hard-to-fill due to skills shortages (down 1ppt from the 2013 Employer Skills Survey), the same rate as Scotland
7% of the workforce have a skills gap, compared to 5% in Scotland
Aberdeen City and Shire employers are slightly more likely to report skills gaps but less likely to state under-utilisation of skills
Skills gaps particularly prevalent in Sales & Customer Services and Skilled Trades occupations
65% of employers with a skills gaps say there is an impact on the business (70% nationally) with 48% of all employers saying the impact is major (Scotland 52%)
Aberdeen City and Aberdeenshire

17. Modern Apprenticeships
Schools
Modern Apprenticeships
Education and Training
The secondary school roll in 2015 was 23,026, 8.2% of Scotland total
94% of school leavers enter a positive destination, compared to 92% across Scotland
Modern Apprenticeship (MA) uptake fell
From 9% of national total in 2014/15 to 8% in 2015/16
Construction most popular MA framework group
16% of uptake
Heavily gender segregated - 98% male
75% MA achievement rate in 2015/16

18. Further and Higher Education
In 2015/16, at North East Scotland College there were 21,475 enrolments
8% of Scotland’s total
79% FE and 21% HE
Top three subjects:
Full-time: Engineering, Business Admin, Computing & ICT
Part-time: Care, Engineering, Languages & ESOL
67% successful completion of FE courses
There were over 30,000 students at the three HEIs in the region in 2014/15
Top three subjects:
Business & Admin, Subjects Allied to Medicine and Engineering
2014/15 students at HEIs in Aberdeen and Aberdeenshire
Total university students
University of Aberdeen
16,250
Robert Gordon University
14,170
SRUC Aberdeen
240
Total
30,665
HE/FE data is available at regional level only. Data relates to enrolments at FE and HE Institutions in the region, not residents unless otherwise stated. Data provided by SFC and HESA

19. Workforce Growth
The size of the working age population is expected to rise by 11% in Aberdeen City and Shire over the next 20 years, compared to a 4% fall nationally
36,500 more people of working age, which presents an opportunity to boost GVA if there are sufficient additional job openings
There is a risk that the forecast growth in working age population does not fully reflect the potential longer term impact of the oil and gas downturn - i.e. there may be less potential than previously to increase the size of the economy through population growth
Despite the forecast population growth, Aberdeen City and Shire is expected to have very limited employment growth over the period (0.4% v. 1.0% nationally). This will equate to an additional 1,100 people in employment
In comparison, over the period, the number of people in employment rose by 13.4%
Note: analysis uses total employment (people) rather than total employment (jobs).
The former figure will be higher as a person can have more than one job.
Improving productivity will become the key determining factor in increasing economic prosperity, and there is a need to provide high quality job opportunities for the growing working age population
Aberdeen City and Aberdeenshire

20. Jobs and Skills Changes (1)
Total employment (jobs) is forecast to remain relatively flat over , average annual growth of 0.2% is expected for Scotland as a whole. Accommodation and food services and transportation and storage are expected to have growth of 4,400 jobs and 2,900 jobs respectively over the period The financial and construction sectors are also expected to grow, creating 1,700 and 1,000 jobs. However such gains will be offset by falling employment within the manufacturing sector and public administration and defence. The number of jobs within manufacturing is expected to fall by almost 6,000 over the forecast, whilst those in public administration and defence are forecast to fall by over 3,000 jobs.
Forecast Demand for Jobs ( )
Total Employment Growth
Aberdeen City & Shire Employment
% annual average change
Change in total jobs (‘000s),
Source: ONS / Oxford Economics
Source: ONS / Oxford Economics
Glasgow

21. Jobs and Skills Changes (2)
Growth is forecast to be strongest in elementary occupations over the period (1,300 people). Growth is also forecast in caring, leisure and other service occupations (900 people), sales & customer service occupations (700 people) and professional occupations (300 people). However, the number of workers in process, plant and machine operatives and skilled trades occupations in Aberdeen and Aberdeenshire is expected to fall by around 900 and 800 people respectively. Associate professional and technical occupations and managers, directors and senior officials are also expected to fall over the forecast whilst administrative and secretarial occupations are expected to show little change.
Forecast Changes in Occupational Demand
Aberdeen City & Shire Employment
Change in number of workers (‘000s),
Source: Oxford Economics
‘000s
Glasgow

22. Jobs and Skills Changes (3)
The majority of openings in Aberdeen and Aberdeenshire from 2016 to 2024 will require individuals with higher level qualifications, in part a reflection of the sectoral and occupational trends expected over this period. Individuals qualified to SCQF level 7 or above will account for 60% of the 86,700 openings expected to be created between 2016 and The remaining opportunities will mainly be for individuals qualified to SCQF levels 5-6, equivalent to 30% of openings over the forecast period. The net requirement at these levels, however, will be driven solely by replacement demand.
Forecast employment change by Qualification ( )
Source: Oxford Economics
Glasgow

23. Jobs and Skills Changes (4)
Replacement demand will result in over 87,000 openings within Aberdeen City & Shire from 2016 to Expansion demand is expected to fall by 400 between Together with replacement demand, this will result in 86,700 openings over this period. Openings will be highest in professional occupations, driven by replacement demand. The total requirement for workers in elementary occupations and sales and customer service occupations is also expected to rise significantly over the period in which both are expected to experience expansion and replacement demand
Forecast Demand for Jobs ( )
Source: Oxford Economics
Note: totals may vary from previous slide due to rounding within the body of the table
Glasgow

24. Implications for Skills Investment Planning

25. Aberdeen City & Shire: Key Implications (1).
Recommended Areas of Focus
Diversifying the employment base. Job losses in the oil and gas sector have been swift and significant following the 2015 fall in global oil prices. Approximately 10,000 more jobs are forecast to go and the region will need to compensate for these lost jobs.
Creating high quality jobs. In diversifying the economy there must be a focus on professional services and occupations to ensure lost higher value added jobs are replaced. These are forecast growth sectors for Scotland.
Maintain and develop the culture of employer investment. Employers will need to continue invest and innovate, which includes investment in skills to increase their competitiveness and develop new markets. Skills gaps suggest there may have been a certain under-investment in the workforce in recent years. The supply of skills must also be available to satisfy increased and stimulated demand.
Maintain levels of more enterprise. A key route to the creation of new jobs is to increase the start-up rate and business density. Business birth rates have been consistently above the Scotland average, and it will be important to sustain this.
Glasgow

26. Aberdeen City & Shire: Key Implications (2).
Recommended Areas of Focus
The specific needs of the oil and gas sector will need to continue to be met. There will be challenging times ahead for the sector, yet production still accounts for almost 60,000 jobs, and skills can help to maximise sector productivity.
Sectorally, there is a need to meet the needs of employers (1). There are other key sectors and occupations in the regional economy where replacement demand is strong, including sales and administration & support services. These require work-based learning routes into, and upwards, within sectors.
Sectorally, there is a need to meet the needs of employers (2). This also includes the health and social care sector. The population is ageing and increasing. It has been challenging to attract sufficient numbers into the public sector, including the health service during the period of growth.
A need for progression routes and pathways. Demand for skills in the region is strongest at the upper and lower skills levels – professional and elementary occupations – and so progression to upper skills levels needs to be engendered and facilitated. This is linked to employer investment in skills.
Glasgow

27. Aberdeen City & Shire: Key Implications (3).
Recommended Areas of Focus
A need to support re-skilling. There are many who were working in the oil and gas sector who have out-dated, or the wrong skills for other sectors. Whilst many skills will be transferable, others will need retrained and/or to develop new skills.
A need for flexible provision. Non-permanent employment is increasingly a feature of the Scotland economy and more of the future jobs are expected to be part-time. Non traditional employment also means less conventional career paths, and movement between sectors. Skills provision must be equally flexible, and work-based learning is a feature of this.
A need to meet the region’s infrastructure needs. This will require adequate construction, engineering and professional skills given anticipated levels of Aberdeen City Region Deal and other investment. Tackling gender imbalances in the sector can be part of meeting these needs.
Glasgow

28. Explanation of Sector Trends and Specialism diagram
The Sector Growth diagram allows three pieces of sector information to be displayed, providing a useful overview of the local economy. The diagram includes: Sector size (in terms of employment) – shown through the relative size of the dot representing the sector. Sector concentration relative to the Scottish average – The level of concentration is illustrated on the vertical axis through the Location Quotient. The Location Quotient is a measure of the concentration of industry in an area compared to the national average. It produces an index whereby a score of 1 indicates the industry employment concentration is the same both in the local area and nationally, more than 1 represents a higher concentration and less than 1 a lower concentration. Sector average annual growth rate – The horizontal axis shows the average annual employment growth rate of each sector over the past five year period. The diagram includes four quadrants: Top right quadrant - sectors that have shown employment growth and are more highly concentrated in the local area than the national average Bottom right quadrant – sectors that have shown employment growth but are less highly concentrated in the local area than the national average Top left quadrant – sectors that sectors that have shown employment decline and are more highly concentrated in the local area than the national average Bottom left quadrant - sectors that sectors that have shown employment decline and are less highly concentrated in the local area than the national average
Click here to go back to the main presentation: Sector Trends and Specialisms