Sector Skills Insights: Digital and Creative

1. Sector Skills Insights:Digital and Creative

2. Introduction The UK Commission is working to transform the UK’s approach to investing in skills to help secure jobs and growth. Key to our ambition is the need to encourage greater employer ownership of skills, working to secure long term sustainable partnerships. This slide pack and accompanying evidence report present the case for more employers in this sector to invest in the skills of their people. It does so by presenting real-life, skill-based business solutions that have been used by leading employers to tackle the performance challenges they face and by drawing on examples of the investments being made by the UK Commission through its investment funds. There are several determinants of employers’ skills needs and training behaviour including firm size, strategy and location but it is by sector which the strongest variations appear. Hence this work focuses on the Digital and Creative sector. Slide packs and reports are also available for a number of other sectors from: http://www.ukces.org.uk/ourwork/sector-skills-insights . Each of the sectors are important to the economy in terms of employment, productivity or their future potential. For information about this slide pack and accompanying report please contact: Rachel Pinto (rachel.pinto@ukces.org.uk) Source information can be found in the notes section of each slide

3. Storyboard What are key skills challenges in the Digital and Creative sector? The importance of Digital and Creative sector today Imagine where the sector could be tomorrow Performance challenge (1) Quantity of digital graduates Performance challenge (2) Quality of creative graduates Performance challenge (3) Gender imbalance in the Digital sub sector Performance challenge (4) Investment in workforce skills Benefits to business Tackling these performance challenges: Growth through skills 3

4. What is the digital and creative sector? The Digital sub sector generates value from the systems, services, software and communications backbone on which everyone depends, and covers telecommunications, computer programming and information service activities Thecreative sub-sector generates value from creative content, both digital and traditional, from television to film to publishing, and also covers advertising, design, photography, performing arts and cultural heritage Synergy between the two sub sectors: “Digitisation is making creative firms more technology-intensive” (NESTA) Back to Storyboard

5. What key skills challenges in the digital and creative sector? The sector is facing increasing global competition The sector contributes £92 billion to UK economy, and employs nearly two million people. The UK is ranked 6th in the world for its overall competitiveness in IT but has declinedfrom 3rd. This drop is echoed in other areas of the sector. International competition in the creative sub sector is being driven by policies that are often more ambitious than those in the UK. Attracting talent is a key challenge. Applications to computing/IT degree courses have nearly halved in the last decade. The digital sub-sector employs three times more men than women. The creative sub-sector has an oversupply of graduates but they often lack specialist skills. Not enough employers invest in the workforce. Half of employers train their staff, but the proportion that train has fallen in recent years. Although much training is done informally, spend per employee in the sector is below average. High self-employment in the sector makes training and development activity more difficult. Back to Storyboard 5

6. Digital and Creative... MattersThe sector TODAY • The Digital and Creative sector is fundamental to the success of the UK economy – 8% of all output; 1.9m jobs and supports the competitiveness of other sectors. • The strength of the Digital sub-sector lies in its workforce - it is ranked 3rd in the world behind the US and South Korea. • Productivity per person in the digitalsub-sector is nearly three times the UK average. • 4% of all UK exports come from the Creative sub-sector • It is the largest Creative industry in Europe for publishing and for TV and radio content. The UK is the 3rd largest film market in the world • High self-employment and very high skill levels characterise the Digital and Creative sector Back to Storyboard

7. Digital and Creative matters: Imagine where it could be TOMORROW • The sector retains and builds on its premier global status to create export-led growth and jobs for the UK. • It rivals Financial Services in its importance to the economy. • It continues to lead innovation, creating world-beating solutions that create new markets and exploit existing ones. • The Digital and Creative sector is the sector of choice for skilled workers in the UK and attracts talent globally. • The sector maintains its position to be a source of competitive advantage . • Firms and individuals invest optimally in their skills. • Employers collaborate on, lead and own skills solutions to the sector’s performances challenges in pursuit of mutual gain. Back to Storyboard

8. The performance challengeQuantity of digital graduates • The digital sub-sector needs to recruit at least 30,000 people qualified at degree level or above each year. • Currently, there are not enough appropriately skilled graduates • Employers need to think creatively about opening up alternative recruitment channels • graduates from non-IT courses who can be trained • experienced workers in other sectors who can be retrained • re-entrants to the labour market following career break, early retirement or unemployment The Next Gen Skills campaign is calling Government to transform the way ICT is taught in primary schools to enable more young people to consider careers in computer science. The following case study of Allstate Northern Ireland shows how alternative recruitment channels were used successfully to create the next generation of mainframe engineers Back to Storyboard

9. Case study – Allstate Northern Ireland: strategic solution to skills shortages • The Challenge • When Allstate Northern Ireland (formerly Northbrook Technology) opened in Northern Ireland as a start-up venture it faced a major problem in recruiting mainframe engineers from the small pool of experienced and qualified IT graduates. • The Approach • The company decided to recruit unemployed or under-employed non-IT graduates and train them as professionals in IT skills. Recruits were carefully selected to have a strong aptitude and commitment despite lacking a technological background. • A structured 16 week programme, Bridge to Employment, was based around three phases: • Phase 1 provided foundation training and introduced the graduates to the fundamentals of IT • Phase 2 focused on specific training in mainframe technologies • Phase 3 a project placement to consolidate learning • The programme ran 17 times over four years. Of the 430 people who joined, 402 successfully became mainframe Software Developers at the company. Almost 90% were rated ‘very good’ or better and subsequently over 90% of those classified as ‘very good or higher’ gained promotion. • The company has continued its investment in staff, being awarded IiP Gold Status in 2009, and winning two Talent Management awards the same year. Over a third of all technical staff have been recruited via the programme The benefits Back to Storyboard

10. The performance challengeQuality of creative graduates • The creative sector needs to recruit at least 50,000 people qualified at degree level or above each year. • There is a good supply of graduates from the 18,000 creative and media courses on offer at UK HE institutions. • But too many courses are producing graduates without the specialist skills needed by employers • Engagement between HE and the Creative Media industries is crucial, and there is scope for further engagement through: • the development of talent and high-level skillsfor the creative economy • activities that enhance the employability and enterpriseskills of students and graduates • provision of tailored and high-quality continuing professional development (CPD) • to the creative industries Creative Skillset’s Pick the Tickis designed to be a simple indicator of the best graduates, so employers do not have to sift through hundreds of mediocre applicants to find the one who can hit the ground running, nor have to provide new employees with basic skills and knowledge they should already have learnt.

11. The performance challengeGender imbalance As a result, the digital and creative sector is missing out on significant proportion of the talent pool. Women are missing out on potentially rewarding careers. But this is not only at the entry level. Sustaining the imbalance and keeping women in the sector is just as much of a challenge. There are also large gender imbalances in the music and design sectors on the creative side. The following case study on the Computer Club 4 Girls illustrates where employer led action has been successful in increasing diversity…. Back to Storyboard

12. Case Study – Computer Clubs 4 Girls The Challenge Females are heavily under-represented in the IT workforce. Only 10% of girls go on from school to study A-level computing. Girls are therefore missing out on exciting careers and organisations are not recruiting sufficiently from all possible sources of talent. The Approach In order to inspire girls to consider careers in IT, e-skills’ launched a Computer Clubs 4 Girls (CC4G) which is an after-school clubs for girls aged 10-14. The scheme incorporates leading online resources and brings technology to life through projects of music and fashion to make it more engaging for the girls. The Benefits Employers and individuals across the sector are supporting CC4G - for sponsorship of £500, a school can run an after-school online CC4G club for a year, and sponsors often support a local club and they can visit the school to encourage the girls in their work. 84% of girls are more likely to consider further IT studies as a result of CC4G • “There are few careers more relevant, creative, varied and rewarding than IT – it touches everything – and Britain is good at it! We need to find the best talent and what makes that doubly difficult is not enough girls are exploring IT as a potential career. CC4G is a practical, fun, safe way for them to get them involved” • Craig Wilson, HP Enterprise Services, Managing Director and VP, UK and Ireland Back to Storyboard

13. The performance challengeInvestment in workforce skills • Is there a skills mismatch in the Digital and Creative sector? • Relatively few employers report staff that are not fully proficient in their jobs. • But where they do exist, the most common skills gaps are among professional occupations in the digital sub-sector (27% compared to 9 per cent for the whole economy), and among sales and customer service occupations in the creative sub-sector (25% compared to 19% for the whole economy) . • Where technology skills are lacking employers report it impacts on new product development (68% for digital employers, 51% for creative employers and 41% for the whole economy). • It also impacts meeting business requirements, in terms of outsourcing work (39% of digital employers, 31%of creative employers and 26% for the whole economy). • There is also a need to improve business and management skills - Management, planning and organisational skills are those most commonly identified as the ones that need improving and these are in demand across the economy • However training levels are falling and international competition is rising The following case study of the Metro Newspaper illustrates the benefits of boosting management capabilities and of investing in staff. Back to Storyboard

14. Case study – MetroCPD in the creative industry • The Challenge • Metro, a free, colour, weekday newspaper for London’s commuters, was launched in March 1999. As a relatively new venture, it focused on its processes rather than its people and as a result had real trouble holding on to its employees - high staff turnover rates and high recruitment costs became the norm. In 2001, only a few years after its launch, employee turnover was running at 33%. Each sales person that left was costing Metro an estimated £91,000 in recruitment and training costs and lost sales. • The Approach • A new senior management team decided a change in direction was needed urgently, not only to encourage excellence and loyalty among its staff, but also help achieve the Investors in People Standard. • Following the initial IiP assessment, Metro’s senior editorial team undertook a seven week ‘bite size’ training programme on how to avoid micro-management, to empower and also to develop their staff. As well as a range of ongoing development initiatives, Metro conducts regular measurement to assess progress and staff satisfaction. • The Benefits • 20% year-on-year revenue growth in the face of a declining market • 91% of employees say they are proud to work for Metro Employee attrition reduced by 50% following the change in management. “We invest heavily in our talent, because we know that excellent people will create excellent products. There is no substitute for developing people. It is in everyone’s interest and provides a real future for our people and our business. Get this right and you will achieve a positive impact on your bottom line” Steve Auckland, Managing Director Back to Storyboard

15. The performance challengeBuilding the workforce of tomorrow • Much of the training undertaken in the Digital and Creative sector is done informally, but more can be done to strength this. • Training provision is fragmented and led by learner interest. • Only 26% of digital and creative employers reported staff had been trained towards a nationally recognised qualification compared to 44% across all sectors. • The sector could do more to grow the specific skills it needs through apprenticeships/internships and tackle some perennial problems: • Creative employers often find job-specific skills lacking among graduates • Entry routes to the creative sector are often characterised by knowing people in the industry and mean the sector doesn’t always access to the best talent • Digital employers need to establish alternative entry channels such as Apprenticeships that create ‘home grown’ talent The following case study of Cardiff Millennium Centre shows how this can be achieved. Back to Storyboard

16. Case study– Wales Millennium Centre welcomes Creative Apprentices The Challenge Wales Millennium Centre felt that they needed to take a forward looking approach to meet their growing skills requirements, and invest in the future of their workforce. The Approach They decided the best approach was to launch Creative Apprenticeships with employers and FE Colleges in Wales. The aim is to provide clear and accessible routes into sustainable creative and cultural jobs through the use of vocational, rather than academic, qualifications. It offers training opportunities to both new and existing personnel looking to break into backstage, community arts and venue operation careers. The Benefits This suits both parties – the employer has a young, motivated and enthusiastic member of the team who is well-trained in the business, whilst the Apprentice leaves his or her period of education debt-free, well-skilled and confident to enter work. To date, they have five apprentices across multiple disciplines. “It’s been a great experience so far. The Apprentices have thrown themselves into the work and integrated themselves into the team very well. They bring freshness to the work environment; their enthusiasm is infectious. For me, personally, teaching someone else keeps your mind fresh.” Diane Prentice, Deputy Technical Manager “It's quite a hard industry to get into, because it's often the case that you have to know someone. I don’t think I’d have had access to working across as many backstage disciplines if I’d have gone down the college-only route.” Karly Hill, Technical Apprentice Back to Storyboard

17. Growth through skillsSecuring future success • Across the sector, raising skills is key to raising performance, but while there is no silver bullet, a mix of actions which push and pull in the same direction can help. • Employer leadership in the development of solutions and then taking ownership of those solutions is fundamental to their success and sustainability. • Sources of investment are available to support the implementation of solutions led by • business on behalf of the sector. • The Employer Ownership pilots offers all employers in England direct access to up to £250 million of public investment over the next two years to design and deliver their own training solutions. • The Growth and Innovation Fund (£9 million invested so far, £29 million to invest in 2012-13) gives priority to solutions for the sector e.g.: • Employer commitment and investment in Apprenticeships • Creation of employer networks to overcome skill problems (see BAE Systems example) • Employer-backed proposals for other skills solutions such as: management and leadership;professional standards;high performance work practices incorporating people development (e.g. Investors in People). • Information and business advice is also important as a solution. • Ultimately this is trying to catalyse sustained investment in the development of the sector’s workforce led by employers which lies at the heart of an enterprising and dynamic nation.

18. Growth through skillsSecuring future success Encouraging strong links between employers and colleges/ universities Creative Skillset’s Media and Film Academy Networks enable education and industry to work together to produce the innovators and leaders of the future: • The Academies form a network of colleges and universities across the UK which are centres of excellence in television and interactive media. • The Film Academies comprise 3 institutions which the UK film industry has identified as those offering the highest quality of skills training for film. • The Craft and Technical Skills Academy is working closely with the film industry to develop training that is relevant and most effective at responding to current skills needs • Together, the aim of the Academy Network is to ensure the UK has the most talented workforce in the world for film, television and interactive media, both now and in the future. The Information Technology Management for Business (ITMB) degree was created by e skills UK in collaboration with over 60 employers. It is specifically aimed to develop graduates who have the variety of technical, business and interpersonal skills that organisations need to compete globally. • Latest figures from e-skills UK show that 100% of (ITMB) students find employment, or go on to further study, within 6 months of graduation. Back to Storyboard

19. Growth through skillsSecuring future success The talent pipeline into the sector is being improved through: • Better information, advice and guidance: BigAmbition is a web-based resource funded through GIF and launched by e-skills where students, teachers and advisers can find out what it’s like to pursue a digital career find out about potential employers and learn about technology career trends. • A quality assurance framework for HE courses: Skillset, also with investment from GIF, are establishing a quality assurance framework (Pick the Tick) to ensure that people choosing their degree study options benefit from clear signposting of the most industry-relevant degrees and provide employers with an effective mechanism to identify high quality job applicants. Back to Storyboard

20. Growth through skillsSecuring future success Encouraging small firms to collaborate and work together to pay for training The Creative Skillset Skills Investment Fund (SIF) is the training levy on productions filmed wholly or partly in the UK, and provides the industry with an innovative shared approach to investing in its own skills and talent. Money from SIF, which is calculated as a 0.5 per cent of the production budget up to a maximum contribution of £39,500, is used to fund new trainees coming into the industry in priority grades, and to provide specialist training for existing professionals. Thus the training ensures the skills of the current workforce are up to date with the latest technologies and changing roles within the industry.

21. Benefits to Business • Training investment leads to net benefits for the firm as it raises performance and firm survival rates: • Theatre Royal Newcastle’s ticket sales increased by 5% following a training programme for box office staff. • There was a turnover increase of 80% at Blueloop Integrated Network Services after engaging with Investors in People which tightened and linked up systems and procedures so everyone understood their own role and the overall business direction. • Aside from the direct benefits to be had in the sector from investing in skills there are wider benefits: • All individuals need to constantly increase their skills in IT to participate fully in society. • Technology has the potential to lever productivity growth across the whole economy of £35 billion. Back to Storyboard

22. Key messages • The digital and creative sector is highly successful. It makes a significant contribution to the economy and enjoys World class status, which needs to be sustained. It is projected to grow and evolve rapidly over the next decade • Partly because of this success several challenges exist which threaten the sector’s performance: • the quantity of digital graduates • the quality of creative graduates • the gender balance and lack of financial investment in the workforce. • Examples exist of where these challenges are being tackled successfully through employer-led skills solutions. If the sector is to realise its potential this action must be scaled-up and employers must play a greater role in developing the skills they need • The UK Commission is looking to work with employers to transform the UK’s approach to investing in skills of its people to secure growth and prosperity. More information about the UK Commission’s investment funds is available here Back to Storyboard