Skills North East - The Regional Skills Partnership

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Cogent

Cogent Regional Contact:

Gordon Jackson, Skills Director - Northern England
Stakeholder and Policy
Cogent SSC Ltd

T: 0191 5271718 / 07825 229589
E: gordon.jackson@cogent-ssc.com

www.cogent-ssc.com

Learning and Skills Council Contact: simon.wigington@lsc.gov.uk

Click here for the Cogent North East Fact Sheet

Overview of the Sector in the North East

Cogent is the Sector Skills Council for chemicals, nuclear, oil and gas, petroleum and polymer industries.

The sector covers oil and gas exploration and extraction, chemicals manufacturing and processing, petroleum refining, blending, storage and distribution, forecourt operations, oil fired heating services, manufacture of aviation fuels, bitumen, inks, polymer and nuclear industries.

Estimates of “Gross Value Added” to the regional economy are recorded in the Annual Business Inquiry (National Statistics, 2001) as:

Chemicals £724M,
Polymers £382M,
Oil and Gas Extraction £31M, and
Petroleum £78M. (Cogent 2005)

The reported combined turnover for chemicals and polymers was £4,747 million. No reliable figures are available at this time for the nuclear industry, since the data are contained within, and inseparable from other larger groupings. (Cogent 2005)

46% of the NE workforce is aged 45 years and above – this is higher than for the sector nationally (40%). The age distribution of the workforce is skewed towards the older age groups.

Very few, if any, of the workforce in the NE are non-white in contrast to the sector nationally where 6% of the workforce is non-white. (Regional Fact Sheet 2005)

The proportion of workers in the NE which are female (27%) is slightly less than the national sector average (30%) and represents just over a quarter of employees. (Regional Fact Sheet 2005)

A smaller proportion of workers in the sector in the NE are qualified to NVQ Level 3+ (43%) compared with nationally (52%). (Regional Fact Sheet 2005)

Key issues facing the sector now and in the future

The sector (including Chemical, Pharmaceutical and Biotechnology Companies) directly employs some 34,000 people in the region producing a GDP of approximately £8.5 billion. This is a significant industrial sector for the economic prosperity of the region. Furthermore, many of the companies represented therein are inextricably linked either by pipeline or supply chain and therefore the number of people impacted by any adverse changes and touched by a progressive shockwave will amount to many thousands.

Key challenges for the sector include the need to attract young people into the industry, to adapt the workforce skills to fast-advancing technology and to develop standards of safety and competence to ensure that the highest levels of health and safety are achieved. (Regional Fact Sheet 2005)

There is an overall image problem, which deters people from entering the sector as a career preference. There is also a potentially 'ticking timebomb' in terms of demographics. The workforce is ageing and there are insufficient young people entering the industry to replace them (see above). This issue is further compounded by the fact that due to technological demands, global market pressures and the restructuring of organisations, the depth and breadth of the skills inventory each employee needs to posses and competently demonstrate is becoming greater. (RSDM 2005)

Current and forecast recruitment demand (either for growth or replacement)

34,313 people are employed in the Cogent footprint (Regional Fact Sheet 2005 from LFS 2003). Each of the five sub sectors has a significant impact on the North East, either through direct employment, indirect employment, or through potential future activity.

Indications are that there will be a decline in employment across the sector over the period 2002-2012 (Regional Fact Sheet 2005 from Working Futures), however, replace demand will far outweigh any reductions in sector numbers. In terms of overall numbers within the sector, there is a groundswell of opinion that whilst the shape and profile of the industry may be changing to higher 'value added' activity, the overall numbers remain relatively stable. There are examples of large closures (Pfizer, 650) but there are also examples of investment and job creation (Huntsman £200m, 117 jobs). (RSDM 2005)

Employment Issues in the North East

Recruitment difficulties and causes

The proportion of employers reporting vacancies nationally is 22%. The proportion of companies nationally reporting HTF vacancies was 11%. No data was available at regional level. (Regional Fact Sheet 2005)

Vacancies reported by employers in the Cogent sector in the NE are in line with those reported by Cogent sector employers across England. Of these, HTF and skill shortage vacancies are in line with the averages for England. Approximately one third of employers also report experiencing skills gaps – management and machine operatives have been cited as areas of concern. (Regional Fact Sheet 2005)

Attracting people into the sector

Key challenges for the sector include the need to attract young people into the industry. (Regional Fact Sheet 2005)

Workforce Development in the North East

Skills shortages/gaps in existing workforce and latent skills issues

The needs of the workforce are diverse, due to the range of roles covered and the technologically advanced and highly regulated nature of large parts of the industries. Common issues faced by the majority of the 5 industries include:

A need for highly skilled managers, researchers, engineers, technicians, operators & others
Significant skills shortages and gaps
Large proportion of SMEs within the sector
Ageing workforce
Recruitment difficulties
Increasing impact of legislation
An interdependent supply chain
Focus upon environmental impact of the industries
The pace of technological change
Competitiveness especially against overseas companies
Potential to grow global markets for end products (Cogent 2005)

Business Improvement Techniques -. in a bid to remain competitive on a global stage - higher productivity = higher profitability =sustainability.

Apprentices - both volume and quality issues to meet the needs as previously mentioned. Gender imbalance is still prevalent in the sector especially in regards to the 'traditional trades' such as Process Technicians.

Management and Leadership - especially regards to the 'emerging manager' and the graduate engineer.

The overall increase in this sector in the region is currently estimated to be approx 1000 over the next 5 years (a potential growth area missed by SEMTA).

There is also a recognised shortage in the 'Qualified Person' role in the Pharmaceutical and Biotechnology sectors.

Competence is a phrase often heard within the sector, though it means different things to different people and makes determining a universal solution or framework more problematic.

Future skills demand

The sector employs people at all levels, but with some of the industries having a profile skewed towards higher levels of skill (specifically nuclear and oil and gas). Recent reports such as “Skills for the 21st Century Chemicals Industry” (Skills Network Group of the Chemistry Leadership Council) highlight the need to move the standard up to level 3 for recruitment and upskilling of current employees. (Cogent 2005)

The overall target is to have at least 65% of the workforce qualified to level 3 or above. (Cogent 2005)

As the hydrocarbon industry becomes more integrated, the sector needs to promote employability by developing individuals with the transferable skills necessary to more between the different sub-sectors. (Regional Fact Sheet 2005)

To adapt the workforce skills to a fast-advancing technology advances and to develop standards of safety and competence to ensure that the highest levels of health and safety are achieved. (Regional Fact Sheet 2005)

Learning and Skills Infrastructure in the North East

A lack of suitable courses in the area was stated to be a barrier for 20% of construction companies compared to 25% nationally. (Regional Fact Sheet 2005 from NESS 2003)

A lack of suitable courses, generally, was considered a barrier for only 13% of companies in the NE compared to 20% in England as a whole nationally. (Regional Fact Sheet 2005 from NESS 2003)

Relevance and quality of existing provision

Employers in the sector spend a lot of resource (both time and money) on training (£millions rather than £thousands). The difficulty comes in trying to disaggregate the figure to try and isolate the amount spent on skills enhancement and workforce development as opposed to induction and mandatory (including Health & Safety) training. The industry is heavily regulated for example by the HSE and FDA. There is also the potentially damaging impact (in terms of relative competitiveness) from the impending REACH legislation. (RSDM 2005)

Barriers to employers accessing the skills provision they need

The amount of employee engagement with LSC funded providers is not very high due to a number of factors, e.g.:

A perception that training is inflexible e.g. classes don't fit in with shift patterns etc.
The training provision does not reflect the actual need - e.g. training cannot keep apace with industrial and technological developments
Complex funding offers, e.g. full cost provision, subsidised provision, Government initiatives (RSDM 2005)

Nationally over two thirds (68%) of companies in the sector have provided funding for staff training within the previous 12 months and of these 63% of staff have received training. No data regarding staff training was available at a regional level. (Regional Fact Sheet 2005 from NESS 2003)

Only 15% of firms in the region reported no barriers to training, much less than nationally (26%). A lack of time for training was a barrier for nearly two thirds of companies in the sector, a significantly higher proportion than nationally. In addition a lack of funding for training was also more significant than nationally, whilst a lack of cover and a lack of suitable courses were less important in the NE. (Regional Fact Sheet 2005)

Best Practice

Areas of best practice would include the development of the Interactive Chemical Training e-learning suite which is aimed primarily at the 'mature' Process Technician to upskill them to an industry recognised Level 3. Another area would be the collective and corralling approach the employer body NEPIC has had to bring together the needs and wishes of over 200 companies in the sector. This has recently manifested itself in the submission of an employer led expression of interest for a National Skills Academy. Other positives would be the community and schools engagement by a number of companies in the sector/region. (RSDM 2005)

Cogent recognises the significance of the Northern Way initiative and is involved in looking to influence direction and take advantage of opportunities offered to employers, this is especially relevant to the chemical sector. (cogent 2005)

Within Chemicals, Cogent works closely with NEPIC and actually provides secretariat for the Education and Skills Team Strategy Group, Leadership of Theme 1 in the Skills and Education Action Plan and contribution to themes 3 and 4. The links are equally strong with The Centre for Process Innovation (CPI) the RSDM, CITO network and other fora in an effort to provide influence, support and collaborative solutions. (Cogent 2005)

Direct involvement in the North East Energy Cluster has provided opportunity for Cogent to plan a regional approach to offshore oil and gas and nuclear skills issues via work on the Energy Cluster Skills Action plan. (Cogent 2005)

Cogent also works closely with NOF, DTI and other key stakeholders in this area of its footprint, in the polymers and petroleum industries employer forums have been set up to bring tangible skills benefits to the workforce. (Cogent 2005)

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