Skills Audit Report 2015

MANCHESTER DIGITAL

Manchester Digital is the independent trade association for digital businesses in the

North West of England. It provides its members with unrivalled access to relevant

information, knowledge and networks, giving them the chance to attend

inspirational events, generate new business, set up collaborative projects and find

new talent – as well as the opportunity to shape the future of digital in the North

West.

A large part of Manchester Digital’s activity is dedicated to the development of

skills and talent to support the region’s vibrant and growing sector.

In February 2015, Manchester Digital held its fourth annual Skills Festival, consisting of

4 events: Conference, Talent Day, Experience Day and Open Studio Day.

Talent Day is the largest event of its kind; a careers fair for students considering a

career in digital, looking to find placements, full time work or apprenticeships. Over

1000 students attended Talent Day this year and over 70 digital businesses were

offering career opportunities.

Conference topics discussed included equality in tech; a devolved Manchester;

redesigning the world around us and conflict in the curriculum. Businesses, policy

makers and educational institutions attended the conference and by bringing

these groups together, Manchester Digital is helping to shape the future policy and

the provision of digital education. A short report on findings from the conference is

also available.

Ahead of the event, Manchester Digital distributed a survey to its members to gain

factual insights into the demand for digital talent in the region and to understand

how businesses are dealing with ever increasing competition for talent.

Chair of Manchester Digital, Tony Foggett presented and discussed the results at

the Skills Festival Conference. This report is an in-depth analysis of the survey, which

was completed by 86 members of the association. It is also supported by data

collected during the Skills Festival.

SUMMARY OF KEY THEMES AND INSIGHTS

As in 2013 and 2014, employers report a large number of hard-to-fill

vacancies with technical development being the hardest. PHP, Magento

and Java Script were cited as the most difficult roles to fill.

Developers, designers, sales and business development are the three roles

that respondents cited as “most likely to grow in importance”

80% of respondents are experiencing “growing pains” in their businesses.

ANALYSIS FROM TALENT DAY ATTENDEES

This chart shows where the students who attended the Skills Festival came from and

is a reflection of which institutions understand the importance of industry

engagement when it comes to placing students in jobs*1.

Manchester Metropolitan University 275

University of Salford 212

Eccles Sixth Form 144

Oldham College 62

University of Manchester 59

Trafford College 45

Liverpool John Moores University 44

University of Central Lancashire 33

University of Bolton 22

Edge Hill University 22

Chorlton High School 20

Other 17

Open University 13

Priestly College 12

Manchester College 10

Manchester Business School 6

Loreto college 5

Staffordshire University 4

Shillington College 4

1 These figures are taken from two days before we closed registration so will be a

conservative estimate

ANALYSIS

Q1: What type of business are you?

The below chart provides a detailed breakdown of the types of digital businesses

that are in the region and make up the Manchester Digital membership.

From 2014, there has been a 1% decrease (from 36% to 35%) in the number of

digital agencies.

Design and build has grown by 1% and software developer has dropped by 4%.

Agency

Professional services

Production (TV, Film or Video)

ConsultancyMedia planning & buying agency

SEO agency

PRPublic Sector

Recruiter or Training Provider

Software developer

Design & Build

Q2: What is your main business function?

Web Design 36.0%

Content Marketing and Strategy 29.1%

User Experience and Usability 29.1%

Mobile 27.9%

Strategy and Planning 26.7%

Social Media 22.1%

Other 22.1%

Web Project Management 20.9%

E-commerce 18.6%

Search Marketing 18.6%

Web Analytics 17.4%

B2B Marketing 14.0%

Customer Experience 12.8%

Conversion Rate Optimisation 12.8%

Online Advertising 11.6%

Online PR 11.6%

Online Copywriting 10.5%

Email Marketing 9.3%

Community Management 8.1%

Multichannel Marketing 8.1%

Video and Rich Media 5.8%

Online Customer Service 4.7%

Animation 3D 3.5%

Games Development 3.5%

eCRM 2.3%

Animation 2D 2.3%

Affiliate Marketing 2.3%

Visual FX 1.2%

Connected TV 0.0%

Q3: How many people do you currently employ?

This chart accurately depicts the size of the businesses that make up the

Manchester Digital membership. The majority of businesses are SMEs, with strong

representation from digital and marketing agencies. However the profile of

membership is changing with a marked increase in tech start-ups joining

membership and larger businesses (51+) such as BBC, Virgin Media, Autotrader,

Shop Direct, rentalcars.com and Boohoo recently joining. Start-ups are keen to join

for the networking opportunities and to increase their chances of finding investment

whilst for larger businesses the driver is access to talent.

Less than 5, 34.9%

5 - 10, 9.3%

11 - 25, 17.4%

26 - 50, 14.0%

51 - 100, 4.7%

More than 100, 19.8%

Q4: Of those employees, please tell us how many are full time and how many are

part time.

Full time:

Part time:

Less than 534%

5 - 1013%11 - 25

14%

26 - 5014%

51 - 1005%

More than 10020%

Less than 566%

5 - 104%

11 - 2515%

26 - 504%

51 - 10011%

More than 1000%

Q5: Has your business grown in the last 12 months?

The number of businesses that have grown in the last 12 months has decreased by

around 3% compared to figures from 2014 although the trend of overall business

growth across the sector continues.

Nearly 75% of all respondents had taken on between 1 and 10 new staff members

with a quarter taking on between 11 and 100.

Q6: If yes, how many additional roles have you recruited?

Yes, 80.6%

No, 19.4%

Less than 5, 45.1%

5 - 10, 29.4%

11 - 25, 11.8%

26 - 50, 5.9%

51 - 100, 3.9%More than 100,

3.9%

Q7: Please could you tell us roughly how your workforce is split?

Unsurprisingly, the vast majority of respondents have a fairly even split of functions

across the business, although it is interesting to note that quite a number of

businesses appear to have a top heavy structure with some reporting over 80% of

their business is made up of management.

0

10

20

30

40

50

60

Less than 10% 20% 40% 60% 80% More than 80%

Q10: Do you have dedicated roles with responsibility for the acquisition of talent in

your organisation?

Compared to 2014, more respondents have dedicated roles for the acquisition of

talent. This may be due in part to the difficulties that many businesses have in

recruiting and retaining talent with many agencies claiming they pay more in

external recruiter fees than it costs to have a dedicated in-house recruiter.

Q11: If no, who manages talent and recruitment?

Yes, 37.9%

No, 62.1%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

ManagingDirector

Other senior staff Office Manager Responsibility ofall staff

Q12: What are the 3 most difficult roles to fill?

The 2015 results differ vastly to the 2013 and 2014 results. In 2014, Developers were

the hardest roles to fill (61% of respondents cited this), but in 2014, PPC Exec and

Project Manager also featured (11% and 17% respectively).

The shift towards the requirement for designers offers an interesting insight into the

current needs of our member businesses.

Sales / Business Development demand has increased from 11% in 2014 to 38.5% as it

currently stands.

Designer, 28.8%

Sales / Business Development, 38.5%

Developer, 48.1%

Q13: If you chose "developer", please specify the language/platform.

This year the top 3 most difficult languages to recruit for are PHP, Java Script and

Magento. Last year, 77% of respondents cited PHP developers as being the most

difficult to find. We do not believe that the market has eased and that it is any

easier to find PHP Developers but instead that demand for the other languages has

also grown. Magento is an ecommerce software which probably reflects the

growth of this sector in the North West.

Drupal, 7.7%

Magento, 14.1%

Ruby on Rails, 2.6%

PHP, 20.5%

Python, 3.8%

Java Script, 17.9%

SQL, 12.8%

C++, 6.5%

Other (please specify), 14.1%

Q14: Which skill sets will grow in importance to your business / output over the next

24 months?

There has been a significant change in figures from 2014 with developer roles

dropping in significance by around 20% and the importance of the designer role

going up by 6.6%. Project Manager has remained quite static, only increasing by

1%. Digital Marketing Professional has dropped from 17% to 9% and SEO has

increased by around 2%.

Developers, 15.5%

Designers, 11.6%

Project Managers, 11.0%

Social Media, 7.1%

Digital Marketing Professional, 9.0%

SEO / Analytics, 9.7%

Mobile, 9.0%

Business Development, 8.4%

Account Management, 7.1%

PR, 3.2%

Sales, 8.4%

Q15: Have you had to inflate salaries to remain competitive in the labour market?

The number of businesses having to inflate salaries has increased from 47% in 2014.

Many of our members, especially smaller agencies say wage inflation is a real issue

for them. There are a number of large businesses recruiting for the same roles who

are able to offer significantly higher salaries and benefits that smaller businesses are

unable to compete with.

Yes, 51.1%

No, 48.9%

Q16: For the below job types please give an indication of salary increases you have

made over the last 12 months?

As the chart below shows, development and user experience roles have seen the

largest increases although most roles have seen only a 10% or less increase.

0

5

10

15

20

25

30

35

Creative Development ProjectManagement

Client Service/ Liaison

Sales &Marketing

Strategy UserExperience

IT &Infrastructure

Less than 10% 20% 40% 60% 80% More than 80%

Q17: What other benefits do you offer to employees to aid attraction and retention?

In 2014, nearly 20% of respondents said that they provided flexible hours as an

employee benefit. This has reduced to 13.4% in 2015. However, social benefits,

flexible location and cycle to work schemes have all increased. Health care,

pensions and gym membership have all decreased year on year.

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

Q18: Which jobs do you most outsource or use freelance talent for?

Compared to 2014, outsourcing for developer roles has decreased by around 10%.

Less businesses also use contractors compared to 2014 (24%). Web design has

increased by 13% and SEO by 2%. Design has decreased by just less than 5%.

Development, 23.3%

SEO, 12.3%

Design, 9.6%

Game developer and illustrator, 5.5%

Web Design, 17.8%

Social Media, 2.7%

PPC, 8.2%

Digital Marketing, 5.5%

We don't outsource or use contractors, 13.7%

Other (please specify), 1.4%

Q19: Have you had to turn away work as a result of being unable to find the right

talent?

This illustrates a worrying trend in the sector. In 2014, 73% of respondents said no

whereas over half of respondents this year have said yes. Even more worryingly,

over 25% of respondents estimated the monetary value of this to be over £50,000.

Q20: If yes, can you estimate a monetary value for this over the last 3 years?

Yes, 56.5%

No, 43.5%

Less than £5,000, 21.7%

£5,000 - £10,000, 17.4%

£10,000 - £25,000, 8.7%

£25,000 - £50,000, 26.1%

More than £50,000, 26.1%

Q21: Do you recruit graduates?

This chart shows a slight increase in the number of respondents not recruiting

graduates – up from 15% in 2014. However, the number of companies running their

own graduate schemes is exactly the same as in 2014.

Q22: Do you run your own graduate scheme?

Yes, 76.1%

No, 23.9%

Yes, 34.8%

No, 65.2%

Q23: Which University are you most likely to recruit talent from?

The vast majority of respondents would recruit graduates from a university in the

Greater Manchester area – a trend which shows great support for the local area

and for the student community. However, given the shortage of talent there is work

to do with other Northern universities to encourage their students to see Manchester

as a place to live and work after they graduate.

University of Manchester, 29.6%

Manchester Metropolitan

University, 29.6%

University of Salford, 18.4%

Liverpool Universities, 7.1%

Other North West Universities, 11.2%

Other (please specify), 4.1%

Q24: Which university course are you most likely to recruit from?

Unsurprisingly, the majority of respondents recruited from computer science and

digital marketing courses. This is not only reflective of the sector but perhaps also

the strong relationships that those course leaders build with the digital community

through such initiatives as Manchester Metropolitan University’s Agency Life and

Manchester Digital’s Talent Day. Some institutions are better than others when it

comes down to employer engagement but much of this success depends on the

individual lecturers commitment to engaging with industry and encouraging

students to be work ready.

Advertising & Marketing, 13.8%

Business Management, 6.3%

Computer Science, 27.5%

Digital Marketing, 21.3%

Information and Communications, 16.2%

Marketing, 11.2%

Other (please specify), 3.7%

Q25: Which roles do you find hardest to fill from local universities or colleges?

Compared to the 2014 audit results, developer roles now appear easier to fill with a

decrease of 30%. Every other type of role has increased in difficulty though,

particularly designers, creative and project managers.

Systems Administrators, 6.4%

Developers, 24.4%

Designers, 14.1%

Creative, 10.3%

Project Managers, 11.5%

Account Executives, 11.5%

Business Development, 9.0%

Marketing, 9.0%

Other (please specify), 3.8%

Q25: Have you taken on apprentices in the last 3 years?

This year we can see an increase of around 10% in the number of business who

have taken on apprentices although this still isn’t as high as the figures we saw in

2013 (48% of business had taken on an apprentice).

Whilst encouraging to see this number rising again, the number of businesses who

haven’t taken on an apprentice is still high; perhaps reflecting a continued

reticence to take on young people with little or no experience. It is important that

employers understand the apprenticeship landscape and how it could work for

their business. The infrastructure behind digital apprenticeships still needs to be

developed. The supply of good talent from schools into apprenticeships is still poor

and funding streams are still viewed as complex by employers. In addition training

provision is still patchy and good technical training in apprenticeships is hard to

come by.

Yes, 39.1%

No, 60.9%

Q26: If yes, did the apprenticeship meet your expectations?

These figures show a slight increase in the number of businesses who felt the

apprenticeship met their expectations (up from 83% in 2014). These figures are

extremely encouraging.

Yes, 88.9%

No, 11.1%

Q27: If no, what stopped you?

Per our findings from 2013 and 2014, capacity / ability to manage an apprentice is

the most common reason for not taking on an apprentice.

Once again though, the quality of applicants is a close second place meaning that

there is still a lot of work to be done to secure the right type of talent and improve

the training that is given. Whilst there appears to be more apprentices coming

through the pipeline, it is important that there are jobs at the end for them.

0%

10%

20%

30%

40%

50%

60%

70%

The results of the 2015 Skills Audit show a slightly more optimistic picture compared

to 2014. The increase in take up of apprenticeships is encouraging but needs to

accelerate far more quickly to provide a medium term, valuable solution to the

talent shortage.

There is still a huge amount of work to be done to make sure that we meet the

current talent demand for Manchester’s digital sector and a significant amount of

planning if we are to have enough people with digital skills to resource the 14,000

jobs that according to Oxford Economics will be required by 2025. It is essential that

we, with the support of local and regional partners continue to promote the

opportunities that exist for young people in digital and that we work closely with the

businesses themselves to help them understand the landscape and how to find and

retain the right talent.

Our Skills Festival goes a long way towards supporting this activity and we work

closely with schools, colleges, universities and businesses to offer the best

opportunities to young people, thus increasing the flow of talent into the pipeline.

However, in order to upscale our activity and grow our talent and skills programme

to meet demand we will have to attract additional resource. We have created

several initiatives that we think will ease the current talent problem and hope to

discuss these with public sector partners in the coming months. We will update

members as these conversations progress.

We will continue with our programme of CPD courses, which have been a great

success. These courses, many of which are free or heavily subsidised for Manchester

Digital members are extremely important in ensuring that the existing talent within

digital businesses are continuing to gain relevant skills and knowledge, upskilling

and in some cases, learning whole new skillsets in order to better service the

business that they work in.

If you want to get in touch to learn more about our skills work or you have particular

training needs that you think we can help with, please contact Katie Gallagher,

Managing Director of Manchester Digital: katie@manchesterdigital.com.