CfA
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London SE11 5EE
info@cfa.uk.com
Tel: 020 7091 9620
Business, Administration and
Governance Final LMI Report
August 2009
©2009 CfA
Final version noted September 2009
Contents
©2009 CfA
1. Executive Summary
3
2 Introduction
2.1. Scope of Research
10
10
2.2 Methodologies
10
3 Profile of the Workforce
3.1 Size of the Workforce
3.2 Age of the Workforce
3.3 Salary and Benefits
3.4 Ethnicity in the Administration Workforce
3.5 Gender of Workforce
3.6 Recruitment and Retention
12
16
16
22
28
30
4. International Benchmarking
4.1 Euro Snapshot
33
33
5 Character and Composition of Current Skills Needs
5.1 Skills Shortages
5.2 Skills Gaps
41
41
50
6 Future Skills Needs
6.1 Forecast Shifts in Patterns of Employment
57
57
7. Governance, Regulated and Senior Administration
7.1 Profile of the Governance Workforce
7.2 Board Structure
7.3 Board Composition
7.4 Director Renumeration
7.5 Boardroom Behaviours
7.6 Governance Primary Research Summary
7.7 Actual Skills
7.8 Expected and Actual Skills Levels
7.9 Difficulty in Recruiting
7.10 Conclusions
71
71
72
72
84
87
89
91
93
95
96
8. Supply Information
8.1 NVQ/SVQ/VRQ
8.2 Apprenticeship Statistics
8.3 Higher Education and Foundation Degrees
97
97
105
111
References
113
Final version noted September 2009
Page 2
1. Executive Summary
The Council for Administration (CfA) has been acting as the Pan Sector national
standard-setting body for business, administration and governance skills since 1996.
Over the past decade, the CfA has defined the role of the business administrator and
identified key skills that are essential for success in today’s increasingly competitive
business environment.
The CfA recognises that a key factor driving economic productivity is skills
development, for both young learners who directly enter the UK workforce in large
numbers from school, college, university and work-based learning, and those already
in the workforce. Consequently, it is vital that the qualifications and training available
in the sector match economic needs and demands.
The report will analyse what drives business success and profitability in the sector.
From this base, it will assess both the current and future requirements for
qualifications and training from an employer perspective.
The CfA’s remit covers the governance workforce and strategic decision-makers,
specialist and designated administrators, as well as the secondary administration
market (known as Self Administration). A large part of the research for the updated
Labour Market Information (LMI) was based on secondary research carried out by
agencies in the four nations.
To specifically examine the skills required by strategic decision-makers and the
governance workforce the CfA commissioned a market research company to carry
out primary research which is included in Chapter 6 of this report. This was
supported by recently published literature and research capturing hard data specific
to this market.
Likewise, the majority of the reports used for secondary research do not identify the
administration skills required of the secondary administration market. Where
information was available, this has been included.
1.1 Size of the Workforce
1.1.1 The Administration Workforce
The primary market consists of 4,336,000 people who are responsible for the
business, administration and governance functions in the public, private and not-forprofit sectors. This market includes the following.
•
•
•
438,000 strategic decision-makers, comprising registered directors, company
and chartered secretaries
1,331,000 specialist administrators who, in addition to general administration
skills, also need sector-specific knowledge to fulfil their job roles
2,567,000 designated administrators who need generic administration skills to
fulfil their job roles
At Governance level, Companies House estimates there are 7 million registered
directorships.
The Governance workforce therefore consists of approximately 7.4 million strategic
decision-makers, comprising registered directors, company and chartered secretaries
©2009 CfA
Final version noted September 2009
Page 3
who are responsible for the governance functions in the public, private and not-forprofit sectors. This market includes the following.
1.1.2 The Self Administration Workforce
The secondary market consists of 21,141 million people. Of these, 17,328 million
people work as professionals, managers and technical specialists in the public,
private and not-for-profit sectors, and 3,813 million people are self-employed, all of
which are required to have a range of Business & Administration skills.
1.1.3 Review of 2008/2009
In June 2009, Gordon Yates published a mini survey focusing on the conditions of
the secretarial market. This research reported widespread concerns about job
security in the secretarial market and how staff cuts can damage an employer’s
image.
Findings showed that 63% of employees are concerned about their job security in
response to 51% of employers having – or are still in the process of – reducing
support staff roles this year.
Although this recession is recognised as the worst since the 1930 crash, drastic
measures in shrinking the workforce through redundancies has previously proven to
have an adverse effect in managing post recession demands. Businesses are not
equipped with a workforce to manage recovery and thus slow down the upturn of the
economy. It has been suggested that methods of redundancies have been deployed
mainly by large organisations in response to cut overheads. The majority of Small to
Medium Enterprises (SMEs) however have largely retained their workforce and is
finding alternative methods in managing the recession.
81% of respondents felt that redundancies have a negative impact on an employer’s
image or brand. However, Figure 3 below shows the most positive impacts
employers use to soften the blow.
©2009 CfA
Final version noted September 2009
Page 4
1.2 Skills Shortages
1.2.1 Skill-shortage Vacancies in England
A market research report published by Reed UK identified particular shortages in
specific regions of the UK. Administrative and support staff were in demand in
Northern Ireland and technical and specialist people were needed in the South East,
the North West and the South West. The West Midlands reported skills shortages in
languages.
Crone Corkill carried out a research with focus on the South East of England and also
identified a shortage of foreign language skills. The report highlights that ‘14% of
employers said that they were experiencing a shortage of bilingual office support
staff. With organisations now increasingly operating on a global scale and the UK
becoming a popular location for international headquarters and global financial
services, language ability is becoming key’.1
The National Employment Skills Survey (NESS) for 2009 was not available at the
time of this report. Therefore the NESS from 2007 was used to present data on skills
shortages as identified by employers in England.
In England, the number of vacancies for administrative staff is relatively high,
compared with other occupations. That said, employers find most administrative
vacancies fairly easy to fill, with administration accounting for the second smallest
number of HtFVs and SSVs. Approximately 13,000 vacancies in administration are
hard to fill, accounting for around 17% of all vacancies. A very
small proportion of administration job vacancies are a result of skill shortages (12%
compared with 21% overall), and there are just 3 SSVs per every 1,000 employees,
compared with the overall average of 6 per every 1,0002.
The NESS reports data which suggests that, generally, HtFVs which are not skillsrelated have less impact on businesses than HtFVs which are skills related3. Within
administration, SSVs account for approximately 68% of all HtFVs, just slightly less
than the overall figure of 71%. Assuming that within administration it is also true
that HtFVs which are not skills-related have less impact on businesses than HtFVs
which are skills related, would suggest that at least 4 out of 5 HtFVs in
administration have a considerable impact on business. Therefore, while compared
with other occupational areas skills shortages in administration are low, those that
do exist are likely to have an impact on the businesses within which they occur.
HtFVs can be put down to a broad range of reasons. These may include issues over
location, unsocial hours, poor career progression and applicants having poor
attitudes, to name just a few. In addition to these, there are three potential reasons
for HtFVs which may be classed as SSVs. These are a lack of the required skills, a
lack of work experience and a lack of qualifications.
1
Crone Corkill, Market Report and Salary Survey 2009
LSC National Employers Survey 2007
3
LSC National Employers Survey 2007
2
©2009 CfA
Final version noted September 2009
Page 5
1.2.2 Scotland
Administration accounts for 11% of all vacancies, 8% of all hard-to-fill vacancies,
and 9% of all skill-shortage vacancies in Scotland. This is encouraging considering
that administration accounts for 13% of employment in Scotland4. 38% of
Administration vacancies are hard-to-fill, lower than the proportion of all vacancies
that are hard-to-fill (48%). However, the proportion of HtFVs that are down to skillshortages is higher in Administration than in Scotland generally, 71% compared to
63%. As a proportion of all vacancies rather than just hard-to-fill vacancies, skillshortages are slightly lower in Administration than overall.5
1.2.3 Northern Ireland6
The number of persons in employment in the period March - May 2009 was
estimated at 744,000. This estimate represented a fall of 14,000 over the quarter
and a decrease of 51,000 over the year.7
The current economic problems will affect the level of demand for skills in the next
2-3 years from what the economy has been used to (and possibly the mix of skill
demand as well). In addition the supply of skills may change, for example greater
replacement of older expensive workers with younger cheaper resources, migrants
competing with the indigenous non-employed or older workers staying in
employment for longer etc.
NI has a relative under-representation of managerial and professional and customer
service occupations. The managerial and professional under-representation is likely a
reflection of the limited ‘upper–end’ activities located in the region (reflected in the
small number of NI PLCs and the ‘small nature’ structure of the economy). Many of
the industrial and indeed professional services activities are not at the headquarter
or design and strategy end of the spectrum and thus demand for managerial and
professional occupations is lower.
4
Future Skills Scotland, 2007
Future Skills Scotland April 2009
http://www.researchonline.org.uk/fskills/search/go.do%3Bjsessionid=C8C7E94DC97E1F925F2CD8467021
9287?action=document&ref=B12287
6
Deoartment for Employment and Learning (DELNI): Forecasting Future Skills Needs in Northern Ireland,
April 2009 pp7, 12
7
Statistical Press Release 15 July 2009: http://www.detini.gov.uk/cgi-bin/downdoc?id=4610
5
©2009 CfA
Final version noted September 2009
Page 6
2. Skills Gaps
2.1 England
In 2007, skills gaps were reported in 6% of administration jobs in England8.
However, the 2007 CfA employer survey found the problem of skills gaps in
administration to be greater, with 16% of employers in England reporting skills gaps
among their administrators.
Between 2003 and 2005, the number of skills gaps in administration dropped by over
half, and skill gaps generally dropped by almost half. This meant that while there
was a considerable decline in skill gaps in administration, as a proportion of all skills
gaps, administration skills gaps barely changed, dropping by just 1%. In 2005,
administration skills gaps accounted for 12% of all skills gaps.
The only occupational areas to account for a higher proportion of skills gaps, in 2005,
were sales and elementary occupations. Skill gaps in managerial roles accounted for
11% of skills gaps, similar to administration.
For all major occupational groups, the primary cause of skills gaps was put down to a
lack of experience or staff being recently recruited. However, the secondary reasons
varied, in administration, being the employer’s failure to train staff9.
2.2 Scotland
There has been no new research and the information below remains as published by
Future Skills Scotland in 2006 when it reported skills gaps of 8% in Administration
jobs.
Problem Solving still ranks as the core skill with the highest skills gap in Scotland,
accounting for 51%, the third highest skills gap among the Scottish workforce.
Surprisingly, Numeracy was rated at only 18% and bottom of the list of concerns.
There is no information specific to the skill areas that contribute to Administration
skills gaps, or how a lack of office and administration skills specifically contribute to
skills gaps generally. All existing data is published in the Demand report from June
2008.
8
9
©2009 CfA
LSC National Employers Survey 2007
LSC National Employers Survey 2007
Final version noted September 2009
Page 7
2.3 Northern Ireland10
NI has a relative under-representation of managerial and professional
occupations. Many of NI’s industrial and indeed professional services activities are
not at the high end headquarter or design and strategy end of the spectrum and
thus demand for managerial and professional occupations is lower. For the key
export sectors of manufacturing and business services, the managerial and
professional gap is very evident.
3. The Changing Workforce
The administration workforce has been decreasing in size over the years and this
is expected to continue. By 2017, the size of this workforce is expected to be
3,319,000, making up 10% of the whole UK workforce.
However, because of the large replacement demand, administration will continue
to provide many jobs in the future. Between 2007 and 2017, it is estimated that
administration will require an input of 1,153 million people. These new entrants
into the administration workforce will require training to provide them with the
skills demanded by employers.
As well as a large replacement demand for administrators in the future, the
demand for Self Administration skills will grow massively. This is due to the
projected growth in the wider Self Administration workforce who has to carry out
some or all of their own administration tasks. Self Administration occupations
include managers, professional occupations, associate professionals and technical
occupations, personal service and sales and customer service occupations.
By 2017, the size of the Self Administration workforce is expected to be over 21
million, making up 63% of the whole UK workforce.
4. Governance
When focusing on the activities carried out in the Governance sector, primary
research identified that there are significant skills gaps associated with the
functions carried out by board members, company and chartered secretaries and
senior administration managers.
On average, two in five current board members and senior administration
managers do not have the required level of skill to carry out the strategic
functions of:
•
•
•
•
•
•
•
Defining responsibilities, powers and tasks
Defining the organisation’s strategy and structure
Determining the organisation’s purpose, vision, values and ethical
behaviour
Ensuring organisational functioning and performance
Making decisions and delegating tasks
Evaluating effective compliance and control systems
Exercising accountability and engaging with stakeholders.
This demonstrates that significant training and development is needed for both
current and future board members and senior administration managers to ensure
that they have the right level of skills and are competent to carry out and oversee
the strategic functions above.
10
Deoartment for Employment and Learning (DELNI): Forecasting Future Skills Needs in Northern
Ireland, April 2009 pp7, 12
©2009 CfA
Page 8
If this important training and development is not implemented in the immediate
future the situation will continue to deteriorate as employers have also
commented on recruitment difficulties. On average more than a third of
employers find it difficult to recruit board members and senior administration
managers with the right level of skill.
This represents a skills shortage, which means there is a lack of specific strategic
administration skills in the marketplace. This combined with the current skills
gaps in the existing workforce, demonstrates that there is a significant problem
that needs to be addressed.
The implementation of a competency framework using existing Governance
standards can provide a solution to the problem. Ongoing training and
development and Continuous Professional Development (through the design,
development and implementation of small bite sized awards in Governance and
Strategic Administration) also offer alternatives ways of up skilling the
Governance and Senior Administration workforce.
©2009 CfA
Page 9
2. Introduction
2.1 Scope of the Research
The objective of this Labour Market Information (LMI) report is to present the
final update on Business & Administration and Governance research for 2008/09.
A number of publications were used to inform the secondary research whereas
market surveys and questionnaires were used for primary sources.
This final LMI report for 2009 aims to provides an up-to date analysis of the size
of the Business & Administration and Governance workforce, the skills gaps and
skill shortage vacancies as well as the effects of European influences on UK
Business & Administration occupations.
Additional features to this report looks at the impact of the recession on the
Business & Administration workforce in general and investigates the changes that
are taking place in Governance and the regulated administration sector as the
result of the economic downturn.
2.2 Methodologies
Conventional labour market information relating to the total composition of the
Business & Administration market consisted of purely secondary research and
was drawn from publications listed in 2.2.1.
Data from the top end of the Business & Administration market, such as
directorships, CEO’s, Non-executive directors, Executive directors, chartered
secretaries, company secretaries, chairmen and board members are a result of
primary research. The CfA commissioned a market research company to carry out
telephone interviews with 150 companies across all four nations, England, Wales,
Scotland and Northern Ireland. Findings are reported in Chapter 7.
Calculating the Size of the Administration Workforce
This Labour Force Survey data is based on Standard Occupational Classification
2000 (SOC2000) which was updated in June 2008. The new codes were used to
calculate the size of the administration workforce. While this data proves to be a
valuable resource, it is limited when used to estimate the size of the governance
workforce.
2.2.1 Secondary Research
For this interim report, external secondary research was drawn from a variety of
sources. These include the following:
•
•
•
•
•
•
•
•
•
•
•
©2009 CfA
Online National Statistics (ONS)
Gordon Yates Update June 2009
REED market survey November 2008
Border & Immigration Agency
Learning & Skills Council
Working Futures 2007-2017
Future Skills Scotland
Scottish LMI report
HESA (Higher Education Statistics Agency)
HEFCE (Higher Education Funding Council England)
FDF (Foundation Degree Forward)
Page 10
It is to be noted that all of these data sources have limitations in terms of how
well they represent the world of Business & Administration. The administration
workforce is cross-sector, but many of the secondary information sources are
sector based, creating a major difficulty. It is important that this is taken into
account when our arguments are presented.
The new edition of SecsLife 2008–2009, published by Gordon Yates provided
valuable research material. The latest edition surveyed employers, permanent
administrators and temporary administrators. In the most part, Gordon Yates
represents the views of employers and employees in London and the South East –
a limitation which should be taken into account when considering findings drawn
from this research.
©2009 CfA
Page 11
3. Profile of the Workforce
3.1 Size of the Workforce
3.1.1 The Administration Workforce
The primary market consists of 4,336,000 people who are responsible for the
business, administration and governance functions in the public, private and notfor-profit sectors. This market includes the following.
•
•
•
438,000 strategic decision-makers, comprising registered directors,
company and chartered secretaries
1,331,000 specialist administrators who, in addition to general
administration skills, also need sector-specific knowledge to fulfil their job
roles
2,567,000 designated administrators who need generic administration
skills to fulfil their job roles
Table 1: Size of Administration Workforce, 2005-200811
Year
Designate Administration
Specialist Administration
Total
% of Total Employment
2005
2,627,000
1,413,000
4,040,000
14%
2006
2,647,000
1,335,000
3,982,000
14%
2007
2,561,000
1,359,000
3,920,000
13.5%
2008
2,567,000
1,331,000
3,898,000
13%
At Governance level, Companies House estimates there are 7 million registered
directorships.
The Governance workforce therefore consists of approximately 7.4 million
strategic decision-makers, comprising registered directors, company and
chartered secretaries who are responsible for the governance functions in the
public, private and not-for-profit sectors. This market includes the following.
Table 2: Size of the Governance Workforce, 2005-200812
Year
Governance
2005
361,000
2006
381,000
2007
378,000
2008
438,000
Administration is vital to any organisation’s success and rather than declining, it
has evolved alongside new technology. It has become a broader role with a
broader skills set. Table 1 above shows a gradual decrease of designate and
specialist administration roles. However changing global market conditions
required greater flexibility and requires administrators to have a broader set of
administration skills in managing increasingly complex tasks. It can be said that
the profile of designated administrators has evolved into a broader and more
specialist role. Another reason for the statistical decline of administrators is the
change of job titles. New job roles and additional functions are not falling under
the category of generic administration but appear instead in with specialist tasks
or managerial level. This accounts for the decline of the designated administrator
who still performs the same tasks and functions including specialist skills but
under a different job status. The administration workforce therefore is still one of
the largest workforces in the UK.
11
12
©2009 CfA
Standard Occupational Classifications (SOC) 2008
Standard Occupational Classifications (SOC) 2008
Page 12
3.1.2 The Self Administration Workforce
The secondary market consists of 21,141 million people. Of these, 17,328 million
people work as professionals, managers and technical specialists in the public,
private and not-for-profit sectors, and 3,813 million people are self-employed, all
of which are required to have a range of Business & Administration skills.
Table 3: Size of Self Administration Workforce, 2005-2008
Year
Managers and Senior
Officials
Professional
Occupations
Associate Professionals
and Technical
Personal Service
Occupations
Sales and Customer
Service Occupations
Self Employed
Total
% of Total Employment
©2009 CfA
2005
3,494,000
2006
3,616,000
2007
3,602,000
2008
4,590,000
3,071,000
3,180,000
3,177,000
3,776,000
3,372,000
3,474,000
3,471,000
4,302,000
1,986,000
2,014,000
2,035,000
2,432,000
2,136,000
2,097,000
2,082,000
2,228,000
3,547,000
17,606,000
62%
3,622,000
18,003,000
63.5%
3,698,000
18,065,000
63.5%
3,813,000
21,141,000
72%
Page 13
3.1.3 Review of 2008/09
In June 2009, Gordon Yates published a mini survey focusing on the conditions of
the secretarial market. This research reported widespread concerns about job
security in the secretarial market and how staff cuts can damage an employer’s
image.
Findings showed that 63% of employees are concerned about their job security in
response to 51% of employers having, or are still in the process of reducing
support staff roles this year. Figure 1 below show the different options
organisations choose in riding out the recessions.
Figure 1: Job security and redundancies June 200913
7%
Compulsory
redundancies
16%
40%
Not replaceing
leavers
Volunt ary
redundancies
Ot her
37%
Although this recession is recognised as the worst since the 1930 crash, drastic
measures in shrinking the workforce through redundancies has previously proven
to have an adverse effect in managing post recession demands. Businesses are
not equipped with a workforce to manage recovery and thus slow down the
upturn of the economy. It has been suggested that methods of redundancies
have been deployed mainly by large organisations in response to cut overheads.
The majority of Small to Medium Enterprises (SMEs) however have largely
retained their workforce and is finding alternative methods in managing the
recession.
81% of respondents felt that redundancies have a negative impact on an
employer’s image or brand. However, Figure 2 below shows the most positive
impacts employers use to soften the blow.
13
©2009 CfA
Gordon Yates market Survey June 2009: http://adinfo-guardian.co.uk/secslife/
Page 14
Figure 2: Positive impacts to help deal with redundancies14
2%
Financial payments in
excess of statutory
redundancy payments
24%
43%
Payment for training
courses
Outplacement support
Other
31%
14
©2009 CfA
Gordon Yates market Survey June 2009: http://adinfo-guardian.co.uk/secslife/
Page 15
3.2 Age of Workforce
Figure 3 shows that over a quarter of administrators and secretaries are aged
between 40 and 49 and there is a shortfall of the future workforce.
Figure 3: Age of Administrators15
30%
Percentage
25%
20%
15%
10%
5%
0%
18-21
22-29
30-39
40-49
50-59
60+
Age
3.3 Salary and Benefits
3.3.1 Salaries across the UK
The graphics below were used to calculate the salaries for administrators and
secretaries across the UK. The aim is to show the fluctuations between salaries
according to the regions the jobs are based.
Table 4: Annual Salary of Administrators and Secretaries by Region16
Although London shows the highest average of salaries for administrators and
secretaries but should not be taken as a yardstick for the rest of the UK. The rate
15 Office for National Statistics LFS Historical Quarterly Supplement (2009)
16 Office for National Statistics LFS Historical Quarterly Supplement (2009)
©2009 CfA
Page 16
of salaries is inflated by the concentration of the financial institutions located in
the City of London and the Docklands. In terms of earning potential, the South
East of England and Scotland are leading with an average of £16,980 per annum.
The lowest salaries are in the East Midlands, with an average of £15,000.
Figure 4: Mean Salaries of Administrators and Secretaries by Region17
Nort h East
North West
Yorkshire & Humber
East M idlands
Region
West M idlands
East
London
Sout h East
South West
Wales
Scot land
All UK
0
5000
10000
15000
20000
25000
Salary (£)
As far as gender related pay is concerned, both charts on the next page clearly
show a higher rate of pay being awarded to males despite performing the same
functions. The annual rate of pay for male administrators lies around £21,800
whereas for female administrators it is around £15,800. This is an average
difference of £6000 per annum or 37.9% in favour of male administrators.
17 Office for National Statistics LFS Historical Quarterly Supplement (2009)
©2009 CfA
Page 17
Figure 5: Mean Salaries of Male Administrators and Secretaries by Region18
North East
Nort h West
Yorkshire & Humber
East M idlands
Region
West M idlands
East
London
South East
Sout h West
Wales
Scot land
All UK
0
5000
10000
15000
20000
25000
30000
Salary (£)
Figure 6: Mean Salaries of Female Administrators and Secretaries by Region19
Nort h East
North West
Yorkshire & Humber
East M idlands
Region
West M idlands
East
London
Sout h East
South West
Wales
Scotland
All UK
0
5000
10000
15000
20000
25000
Salary (£)
18 Office for National Statistics LFS Historical Quarterly Supplement (2009)
19 Office for National Statistics LFS Historical Quarterly Supplement (2009)
©2009 CfA
Page 18
The average salary is around £20,725 for full time posts and £9,571 for part time
posts. It can be said that part time posts account approximately for 53% of full
time salaries.
Figure 7: Mean Salaries of Full-Time Administrators and Secretaries by Region20
North East
North West
Yorkshire & Humber
East M idlands
Region
West M idlands
East
London
South East
South West
Wales
Scotland
All UK
0
5000
10000
15000
20000
25000
30000
Salary (£)
Figure 8: Mean Salaries of Part-Time Administrators and Secretaries by Region21
North East
North West
Yorkshire & Humber
East M idlands
Region
West M idlands
East
London
South East
South West
Wales
Scotland
All UK
0
2000
4000
6000
8000
10000
12000
14000
Salary (£)
20 Office for National Statistics LFS Historical Quarterly Supplement (2009)
21 Office for National Statistics LFS Historical Quarterly Supplement (2009)
©2009 CfA
Page 19
3.3.2 London Snapshot
The following information on salary and benefits was taken from the 2008-2009
SecsLife survey, published by Gordon Yates and Guardian Jobs. The survey
focused exclusively on companies across London and is therefore not reflective of
the entire UK.
Findings from the survey have shown that two-thirds of companies have
increased the salaries for all of their support staff within the last 12 months. 21%
increased for some support staff, and only 12% did not award any pay increases.
Figure 9: Percentage of Companies Increasing Salaries in the Last 12 Months22
12%
Awarded to all
support staff
Awarded to some
support staff
21%
No pay increases
67%
When pay increases are offered, the majority (almost 60%) are between 3% and
4.99%, and another 18% are between 5% and 6.99%. The remaining
percentages are depicted in Figure below. It is important to consider these
increases in terms of inflation, which was approximately 5% in the previous year.
When considering this, most salaries actually stayed the same or decreased.
22 Gordon Yates (2008–2009)
©2009 CfA
Page 20
Figure 10: Pay Increases Offered over the Past 12 Months23
Less than 3%
Percent Increase
3%-4.99%
5%-6.99%
7%-8.99%
9%-10%
Over 10%
0%
10%
20%
30%
40%
50%
60%
70%
Percentage of Com panies
Along with a pay increase, some companies offer a change in benefits, but the
majority (75%) either do not offer benefits at all or do not offer a change in
benefits. 22% offered more benefits, and 3% made the choice of benefits more
flexible.
Figure 11: Change in Benefits Packages24
12%
3%
No change
More benefits offered
More flexible choice
22%
63%
No benefits offered
32% of organisations offer holiday entitlement of around 21-25 days and just
over 25% offer holidays between 31 and 35 days. A small portion (about 15%) is
outside of this range. The higher holiday entitlement can generally be prescribed
to groups of the workforce whose entitlement has increased by the number of
years in service. All of this is shown in Figure 12.
23 Gordon Yates (2008–2009)
24 Gordon Yates (2008–2009)
©2009 CfA
Page 21
Figure 12: Holiday Entitlement25
Percentage of Companies
35%
30%
25%
20%
15%
10%
5%
0%
20 or Few er
21-25
26-30
31-35
36 or More
Days
3.4 Ethnicity in the Administration Workforce
Both within the labour market and the education sector, ethnic minorities are
represented in proportion to national demographics in Business &
Administration26.
Working terms and conditions for refugees tend to be poor, earning less money
and are concentrated in particular industries, such as catering and administrative
work27.
Between May 2004 and December 2008, the majority of registered workers from
the accession countries (40%), applied for positions in administration, business
and management.28
Table 5: Registered workers from the accession countries working in
administration, business and management29
2004
2005
2006
2007
2008
May-Dec
All
All
All
All
Registered Workers
Employed in Administration,
Business, and Management
31,235
74,485
99,235
93,425
70,745
% of All Registered Workers
in Employment
25%
36%
44%
44%
45%
In 2008, 70,745 registered workers were employed in administration, business
and management. This is a large decrease, down from 93,425 in the previous
year. However, the proportion of registered workers working in administration,
business and management actually increased to 45% by the end of 2008.
Between May 2004 and December 2008, Poland provided the largest number of
migrant workers going into administration (68%).30
25 Gordon Yates (2008–2009)
26
CfA (2006) The CfA Vision
27
Stanfield et al (2004): p.24
28
Border and Immigration Agency et al (2009): p.12
29
Border and Immigration Agency et al (2009): p.13
30
Border and Immigration Agency et al (2009): p.21
©2009 CfA
Page 22
The data below was drawn from the new publication by ‘Social Trends No.39’
released by the Office for National Statistics in May 2009. Figure 13 gives a
breakdown of people from different ethnic backgrounds who are employed in
managerial and senior official roles.
The highest representation in this group is white Irish with 21% compared to only
16% of white British and other Asian with 16%. Only 8% of Black Africans were
represented in this group followed by Black Caribbean and Other Black groups
(10 per cent each).
Figure 13: Managers and senior officials in employment:1 by ethnic group,
2008
Other
Chinese
Other Black
Black African
Black Caribbean
Other Asian
Bangladeshi
Pakistani
Indian
Mixed
Other White
White Irish
White British
0
©2009 CfA
5
10
15
20
25
Page 23
3.4.1 Migrant workers31
Figure 14: Registered Migrant workers in Business Administration and
Management May 2005-December 200832
250,000
200,000
156,295
70,745
93,430
210,800
227,875
99,235
50,000
74,485
100,000
204,970
150,000
0
2005
2006
Total all registered migrant workers
2007
2008
Business, Admin & Management
Between May 2005 and December 2008 the number of migrant workers in Britain
has dropped from 204,970 to 156,295 (23.7%). For the Business, Administration
and Management sector, the migrant workforce has decreased by 5%.
The information in Figure 14 has been sourced from the Workforce Survey
published by the British Chambers of Commerce in April 2009. Around a quarter
of UK businesses employ migrant worker primarily due to a shortage in supply of
domestic candidates with the requisite skills and experience. UK employers rated
migrants possessing a better work ethic than native workers.
75.8 per cent of businesses said that migration was beneficial to the UK economy.
Firms are also now employing a higher percentage of migrant workers since the
2004 accession countries joined the European Union.33
Although 71% of UK businesses with 250 or more employees employ migrant
workers, they typically make up less than 5% of the workforce.
Migrant workers undertake a wide range of tasks in UK businesses, with some
holding elementary positions and others securing professional and managerial
roles and responsibilities. A greater proportion of businesses employing migrant
workers in administrative and secretarial positions are located in the South and
London (29%) and the East of England (33%).
Although, evidence shows that the highest proportions of migrant workers are
employed in the low skilled blue collar industries, the Business & Administration
31
British Chamber of Commerce; The Workforce Survey April 2009
Accession Monitoring Report December 2008, p13
http://www.ukba.homeoffice.gov.uk/sitecontent/documents/aboutus/reports/accession_monitoring_re
port/report18/may04-dec08?view=Binary
32
33
©2009 CfA
Global Choices Recruitment; http://recruitment.globalchoices.co.uk/?id=33
Page 24
sector is amongst the top three sectors with the highest number of migrant
workers.
Composition of migrant workers in the Business & Administration workforce
•
•
•
•
20%
18%
17%
13%
work in administrative positions
work in professional roles
work in sales/customer services
hold management/ senior positions
Figure 15: work undertaken by migrant workers April 200934
Work undertaken by migrant workers
managemen
t/senior
positions
sales/custo
mer
services
professional
roles
administrati
ve positions
0%
5%
10%
15%
20%
25%
Figure 16: Distribution of migrant workers in Business, Administration and
Management by region35
Business, Admin & Management
To
ta
l
An
gl
ia
M
id
la
nd
s
Lo
n
No do
rth n
Ea
st
Ce
No ntr
rth al
So W e
st
ut
h
W
e
Sc s t
ot
So lan
d
No uth
rth
Ea
er
st
n
Ire
la
nd
W
al
es
1,000,000
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
Total in top 10 sectors
34
British Chamber of Commerce: The Workforce Survey April 2009
Accession Monitoring Report December 2008, p20
http://www.ukba.homeoffice.gov.uk/sitecontent/documents/aboutus/reports/accession_monitoring_re
port/report18/may04-dec08?view=Binary
35
©2009 CfA
Page 25
Table 6: Distribution of migrant workers in Business, Administration and
Management by region
Anglia
Midlands
London
North
East
Central
North
West
South
West
Scotland
South
East
Northern
Ireland
Wales
Total
64,105
133,835
75,005
120,680
26,045
100,915
51,095
91,135
33,140
86,505
37,285
82,855
26,805
80,860
15,940
74,920
16,440
58,945
10,625
34,830
11,155
23,770
369,1
894,0
20% of migrant workers in administration, business and management were
working for employers (often agencies) based in the Midlands, followed by 17% in
Anglia and 14% in the North East.
61% of those working for employers located in the Midlands were working in
administration, business and management (including employment agencies), as
were 55% of those in the North East, but only 24% in London and 21% in
Scotland.
Figure 17: Nationality of registered workers in Business, Administration and
Management36
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
To
ta
l
Po
la
nd
Sl
ov
ak
ia
Sl
ov
en
ia
a
Li
th
ua
ni
a
La
tv
i
Es
to
ni
a
Hu
ng
ar
y
Cz
ec
h
Re
p
0
Table 7: Nationality of registered workers in Business, Administration and
management37
Czech Rep
Estonia
12,840
2,415
Hungary
10,780
Latvia
17,240
Lithuania
31,895
Poland
249,655
Slovakia
Slovenia
44,095
215
Between May 2004 and December 2008, 68% of Polish migrant workers went into
Business, Administration and Management, followed by Slovakia with 12% and
Lithuania with 8.6%. Slovenia had the lowest migration rate with only 0.05%.
On 29 February 2008, a new immigration system38 was launched to ensure that
only those with the right skills or the right contribution can come to the United
36
Accession Monitoring Report December 2008 p22
UK Border and Immigration Agency
http://www.ukba.homeoffice.gov.uk/managingborders/managingmigration/apointsbasedsystem/howit
works
37
©2009 CfA
Page 26
Total
369,1
Kingdom to work or study. The new system consists of three main key elements
and broken down into five tiers.
Three Key Elements
1) Points are awarded according to workers' skills, to reflect their aptitude,
experience and age and also the demand for those skills in any given sector.
This allows the United Kingdom to respond flexibly to changes in the labour
market.
2) It is a fair, transparent and objective system which enables potential migrants
to assess their likelihood of making a successful application - this means that
it should help to reduce the number of failed applications.
3) The new immigration system is underpinned by a framework of five tiers. This
framework will help people understand how the system works, and will direct
applicants to the category that is most appropriate for them.
The Five Tiers are:
Tier 1 - Highly skilled individuals, to contribute to growth and productivity
Tier 2 - Skilled workers with a job offer, to fill gaps in the United Kingdom
workforce
Tier 3 - Limited numbers of low-skilled workers needed to fill temporary labour
shortages
Tier 4 - Students
Tier 5 - Youth mobility and temporary workers, who are allowed to work in the
United Kingdom for a limited period of time to satisfy primarily non-economic
objectives
Tiers 3 and 5 are temporary routes and Tier 3 being currently suspended. Tiers 1
and 2 can potentially lead to settlement in the United Kingdom, if the migrant
meets the settlement requirements at the time when they apply to settle.
38
UK Border and Immigration Agency
http://www.ukba.homeoffice.gov.uk/managingborders/managingmigration/apointsbasedsystem/howit
works
©2009 CfA
Page 27
3.5 Gender of Workforce
Administration has traditionally always been a female role. Although the functions
carried out by this group have undergone big changes, in particular the
technological aspect, Table 8 shows that the proportion of male administrators
remains to be low.
Table 8: Gender ratio of the Business & Administration workforce39
All persons
Male
Female
Year
All
Admin. &
Secretarial
All
Admin. &
Secretarial
All
Admin. &
Secretarial
2006
29,150
11.9
15,757
4.8
13,393
20.4
2007
2008
29,468
29,409
11.5
11.3
15,935
15,859
4.5
4.5
13,533
13,550
19.8
19.4
Men and women still follow very different career paths. Men are ten times more
likely than women to be employed in skilled trades (19 per cent compared with 2
per cent) and are also more likely to be managers and senior officials. A fifth of
women in employment do administrative or secretarial work compared with 4.8
per cent of men. Women are also more likely than men to be employed in the
personal services and in sales and customer services.
0
Managers and
Senior Officials
39
40
©2009 CfA
Professionals
Associate
professional &
tech
Full time Men
Full time Women
Part time Men
Part time Women
Full time Men
20
Part time Men
Part time Women
40
Full time Men
Full time Women
60
Full time Men
80
Full time Women
100
Part time Men
Part time Women
120
Full time Women
Part time Men
Part time Women
Figure 18: Distribution of gender by occupation40
Admin and
Secretarial
Office for National Statistics LFS Historical Quarterly Supplement
Office for National Statistics Social Trends p.52
Page 28
Figure 18 above gives a breakdown of the gender distribution by occupational
status. The data was sourced from a publication ‘Social Trends’ (p. 52) released
by the Office for National Statistics in May 2009.
People in employment as managers or senior officials were most likely to work full
time. There is still a strong trend for higher level positions to be occupied by men
holding 96% of managerial and senior positions compared to 81% of women. For
professional roles this ratio is 91% men and 72% women, Associate professional
and technical it is 91% men and 68% women and for Admin and Secretarial,
deemed as a traditional female role, surprisingly the ratio is 95% men and 57%
women.
This however changes with part time roles. Here only 4% of men work part time
in managerial and senior positions compared to 19% of women. For professional
positions this is 9% men and 28% women, Associate professional and technical
9% men and 32% women and in Admin and secretarial roles the ratio is 15%
men and 42% women.
©2009 CfA
Page 29
3.6 Recruitment and Retention
Figure 19 shows the occupations most difficult to recruit for. The top four
occupations most difficult to recruit for are executive assistant, receptionist,
general administrator, and bilingual secretary. The role of Executive Assistant is a
high level function and demands a high degree of knowledge and competences.
Research has shown that many organisations find this to be the most difficult
group to recruit. Reasons for this may be that people working at this level are
aiming at a different career path, such as pursuing the academic route or are
leaving the occupation due to an ageing workforce. Therefore organisations find it
increasingly difficult in finding suitable candidates at these levels. The next group
is the role of Receptionists. This may be attributed to the role offering limited
career opportunities in either horizontal or vertical progression. Reason for the
shortage of bilingual secretaries and administrators is because foreign languages
are not considered priority for the UK workforce. Some of these roles are filled
with workers from the European Union but the demand outstrips the supply.
Figure 19: Most Difficult Staff Type to Recruit41
9%
3%
Executive assistants
29%
10%
Receptionists
Bilingual secretaries and
administrators
General administrators
14%
Team/Float Secretaries
Part-time secretarial roles
14%
21%
Paralegal/legal assistants
The Gordon Yates survey showed that only 25% of companies felt that
recruitment was more difficult over the past 12 months. 60% felt that there was
no change, while 15% responded that it was easier.
41
©2009 CfA
http://www.cronecorkill.co.uk/pdf/cc_salary_survey.pdf
Page 30
Figure 20: Whether Recruitment was Easier
or More Difficult Over Past 12 Months42
15%
No Change
More Difficult
Easier
25%
60%
In regards to the retention of support staff, 65% of employers felt that there was
no change in the rate at which their support staff leaves the company. 15% felt
that support staff stay in a company longer, while 20% noticed a decrease in the
length of stay.
Figure 21: Change in Rate at which Support Staff Leave Company43
20%
Increased
Decreased
15%
No change
65%
When employees were asked how long they had worked for their current
employer the responses were:44
42 Gordon Yates (2008–2009)
43 Gordon Yates (2008–2009)
44
Gordon Yates (2008–2009)
©2009 CfA
Page 31
Figure 22: The Length of service for one employer
Length of service for one employer
Less than a year
18%
17%
1-3 years
3-5 years
20%
29%
16%
5-10 years
More than 10
years
The largest proportion of administrators has worked for their current employer for
one to three years. 83% have remained with the same employer for over a year,
suggesting stability in the administrative workforce.
3.6.1 The impact of the Recession on the workforce45
Resourcing in turbulent times46
• Over 370 organisations surveyed predict a negative impact on next year’s
resourcing budget and activities as a result of the recession
56% of organisations are focusing more on retaining than recruiting talent.
• Four out of ten organisations say they will be recruiting fewer people in 2009
than in 2008.
• 72% of respondents expect a future culture change by organisations addressing
and removing poor performers.
45
46
©2009 CfA
http://www.statistics.gov.uk/pdfdir/rec0509.pdf
CIPD 2009 annual survey report Recruitment, Retention and Turnover
Page 32
4. International Benchmarking
4.1 Euro Snapshot
Introduction
This section of the CfA’s LMI report aims to present a snapshot of the conditions
of the European Labour Market from 2003-200747 providing a brief analysis by
country, sector, gender and employment figures.
Since 1995 total employment rose by over 22 million jobs, reaching 170 million
jobs in the EU15 by 2006. More and better jobs, in particular more opportunities
for women were created in Europe and marked a shift towards the knowledge
economy.'
Ireland, Denmark, Finland, Luxembourg and Sweden were the best performers in
terms of employment quality48 and quantity49. These countries managed to
generate large numbers of jobs and most of them were of above average quality.
Job creation in Portugal was less dynamic, but this country nevertheless upgraded
its employment structure (shifting employment upwards) almost as much as the
rest of the countries in this group.
Spain, Italy and Greece also experienced a big expansion in employment. This
however took place within the existing job market rather than through the
creation of new jobs as was the case with the other EU1550 countries.
Although Netherlands, France and Cyprus showed intense job creation at the top
and at the bottom but a big gap was created in the middle. This pattern was
similar in Germany, Belgium, Austria and the UK, although in these countries, job
creation took place predominantly at the top of the employment structure.
The figure on the next page gives the break down of the employment generation
by country, including where this growth took place.
47
The information has been sourced from the European Restructuring Monitor (ERM) Report ‘More and
better jobs: Patterns of employment expansion in Europe’ published in October 2008 by the European
Foundation for the Improvement of Living and Working Conditions (Eurofound).
48
Employment quality: the median hourly wage as the indicator for job quality. This approach was
taken from the US practice when analysing international labour market data.
49
Employment quantity is a measurement to identify economic trends behind observed patterns of
growth by splitting the number if workers into five groups (quintiles)
50
The original 15 EU countries were:Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,
Netherlands, Portugal, Spain, Sweden, United Kingdom
Joined by 10 others on the 1st May, 2004 becoming the EU25.
Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia.
Latest 2 additions on 1st January, 2007 to make it EU27.
Bulgaria and Romania
©2009 CfA
Page 33
Figure 23: Average net employment creation per year by country, 1995–2006
(%)51
The greatest expansion of quality jobs across the EU15 were focused in
knowledge-intensive services (KIS), which were predominantly within the
business services, health and education sectors. Business & Administration and
Governance covers most of business services category. To maintain consistency
with Eurostat labelling, Business & Administration and Governance will be
referred to as other business services or activities.
Data from the European Labour Force Survey (ELFS) provides an insight into the
employment changes that have taken place. They were broken down into sectors
to present the difference in both short-term and long-term labour market
performance among the current 27 EU Member States (EU27). The data also
reflects the strong influence of local economic conditions and national policies of
the individual labour markets. Over a period of ten years, the employment rates
in Austria, Cyprus, Denmark, the Netherlands, Finland, Sweden and the United
51
European Restructuring Monitor (ERM) Report ‘More and better jobs: Patterns of employment
expansion in Europe’ published in October 2008 by the European Foundation for the Improvement of
Living and Working Conditions (Eurofound).
©2009 CfA
Page 34
Kingdom (UK) declared 70% of employment increase which was in line with the
Lisbon Strategy52.
4.1.1 Employment data by sector
It is widely recognised that Europe has moved from a manufacturing into a
service-oriented economy which now accounts for over two thirds of total
employment.
The sector with the highest level of employment growth in the EU has been the
category of ‘other business services’, which comprises a diverse range of
activities including legal, accounting, consultancy, architecture, advertising and
call centre work. Over two million new jobs (net) have been created in this sector
over the last five years. The table below shows the percentage change in
employment and proportion of total employment in EU27, EU15 and Norway, by
NACE 1 sectors between 2003–2007 (%)
Figure 24: Percentage change in employment and proportion of total
employment in EU2753,
EU15 and Norway, by NACE 1 sector, 2003–2007 (%)
Significant increases in employment have been registered in renting and business
activities. This makes the service sector the most dominant in terms of
employment in EU15 and accounts for over 70% of the total employment in
2006. The highest increase occurred in the financial and business services sectors
which registered a total of 13.7% of total employment in the EU15 and Norway.
However, the rate of growth is higher in the NMS10 (10 New Member States) and
much higher in Bulgaria and Romania with 8.6% in the NMS10 and 4.8% in
Bulgaria and Romania.
52
The Lisbon European Council (March 2000) considered that the overall aim was to raise the overall
employment rate in the European Union to 70% and the female employment rate to more than 60%
by 2010.
53
European Restructuring Monitor (ERM) Report ‘More and better jobs: Patterns of employment
expansion in Europe’ published in October 2008 by the European Foundation for the Improvement of
Living and Working Conditions (Eurofound).
©2009 CfA
Page 35
The service sector is broken down into two categories, following the Eurostat
classification of services into Knowledge Intensive Services (KIS54) and Low
Knowledge Intensive Services (LKIS). The two charts below give a breakdown of
the employment creation of the EU15 countries.
Figure 25: Breakdown of services by extent of knowledge-intensiveness55
54
The knowledge-intensive service industry provides consumers with knowledge-based services,
mainly relying on high technology, expertise, information and experience. The service process
includes knowledge production, knowledge dissemination and knowledge use. Knowledge proliferates
in the process of service, while the employees in knowledge-intensive service industry are mostly
high-quality personnel.
55
European Restructuring Monitor (ERM) Report ‘More and better jobs: Patterns of employment
expansion in Europe’ published in October 2008 by the European Foundation for the Improvement of
Living and Working Conditions (Eurofound).
©2009 CfA
Page 36
Figure 26: Net employment creation in knowledge-intensive services (KIS),
other services56
(LKIS) and the entire economy, 1995–2006 (thousands)
56
European Restructuring Monitor (ERM) Report ‘More and better jobs: Patterns of employment
expansion in Europe’ published in October 2008 by the European Foundation for the Improvement of
Living and Working Conditions (Eurofound).
©2009 CfA
Page 37
In order to obtain a more detailed picture of the employment changes at sectoral
level, The chart below provides a breakdown of employment growth or decline by
sector over the period 2003–2007, using the two-digit NACE sectoral
classification.57
Figure 27: Employment changes in top 10 growing and declining NACE 2
economic sectors,58
EU15 and Norway, 2003–2007
As previously noted, employment growth has been especially strong in the EU15
and Norway for other business activities. The service sector accounts for some
70% of employment in the old Member States, and just fewer than 50% of
employment in Bulgaria and Romania.
‘Other business services’ ranks under the top five listings across 21 European
countries and was the source of the greatest employment creation in Finland,
Germany, Italy and Portugal. It includes business and administration, business
support services such as legal, accounting and consultancy work, as well as
covering architecture, advertising and call centre work.
57
Nomenclature générale des activités économiques dans les Communautés Européennes (NACE) is a
common statistical classification of economic activities in Europe. NACE Rev. 1.1 classifies all
economic activities according to 17 main sections at the one-digit level (NACE 1) according to 62
divisions at the two-digit level (NACE 2).
58
European Restructuring Monitor (ERM) Report ‘More and better jobs: Patterns of employment
expansion in Europe’ published in October 2008 by the European Foundation for the Improvement of
Living and Working Conditions (Eurofound).
©2009 CfA
Page 38
Employment expanded by over 400,000 jobs in the UK and by over 500,000 jobs
in Germany in the above mentioned sectors. In Luxembourg, the Netherlands and
Norway, the health and social work sector recorded the highest employment
growth.
4.1.2 Wages & Salaries59
All information presented in this section was sourced from Eurostat, the Statistical
Office of the European Communities published on the 13 March 2009 and focuses
on the EU27 countries.60
By the 4th quarter of 2008, labour costs within the EU27 countries grew by 6.0%
in industry, 5.1% in construction and 3.8% in services.
Wages & salaries rose by 4.7% (the non- wage component by 4.2%). For the
previous quarter the corresponding rates were 4.3% and 4.1%.
Among the Member States for which data are available for the fourth quarter of
2008 the smallest annual increase in hourly labour cost was observed in Malta
(0.4%). The highest annual rises were registered in Romania (21.5%), Bulgaria
(17.9%) and Latvia (17.2%).
4.1.3 2009 Up-date
In January 2009, the latest Commission reporting on employment growth forecast
a down turn over the next 12 months, while the average EU unemployment rate
is set to increase by about 2.5 percentage points in the coming two years.
The first groups to be hit by unemployment are young people, those on
temporary employment contracts, elderly people, foreign nationals and lowincome households.
59
http://epp.eurostat.ec.europa.eu/pls/portal/docs/PAGE/PGP_PRD_CAT_PREREL/PGE_CAT_PREREL_Y
EAR_2009/PGE_CAT_PREREL_YEAR_2009_MONTH_03/3-13032009-EN-AP.PDF
60
Spending on education in Europe: http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-SF-08117/EN/KS-SF-08-117-EN.PDF
European skills mismatch http://www.euractiv.com/en/innovation/europe-facing-skillsmismatch/article-179907 (EurActiv.com)
http://ec.europa.eu/social/main.jsp?catId=568&langId=en
http://www.euractiv.com/en/mobility
The EU27 consists of the following partner countries: Belgium (BE), Bulgaria (BG), the Czech Republic
(CZ), Denmark (DK), Germany (DE), Estonia (EE),
Ireland (IE), Greece (EL), Spain (ES), France (FR), Italy (IT), Cyprus (CY), Latvia (LV), Lithuania (LT),
Luxembourg (LU), Hungary (HU), Malta (MT), the Netherlands (NL), Austria (AT), Poland (PL),
Portugal (PT), Romania (RO), Slovenia (SI), Slovakia (SK), Finland (FI), Sweden (SE) and the United
Kingdom (UK).
©2009 CfA
Page 39
4.1.4 Flexicurity61
In response to safeguarding those vulnerable groups who are forecast the most
likely to suffer from the down turn, the term ‘Flexicurity’ will play a pivotal role in
all EU labour market reports. The term is based on ‘employment security’ (not job
security) and flexibility by providing flexible and reliable contractual arrangement,
comprehensive lifelong learning programmes, effective labour market policies and
modern social security systems. It focuses on the most vulnerable workers to
avoid falling into ‘in-work poverty’.62
4.1.5 Europe's Skills Gap: Industry is taking action63
As the EU shifts towards a knowledge-based economy, the number of jobs
requiring a high level of education will rise from 25% to 31%, the Commission
forecasts.
Soft skills, such as problem-solving, analytical, self-management and
communication skills, but also language skills, digital competences and the ability
to work in a team will become more important, according to the Commission.
Around 20 million new jobs could be created in the EU 25 by 2020, according to a
study presented by the Commission in December 2008. Almost three quarters of
these will be in the services sector.
The best prospects are expected to be in information technology (IT),
insurance and consulting sectors, as well as in health care, social work, hotels
and catering.
4.1.6 How does the UK compare to other OECD countries64?
As ageing populations put more downward pressure on economic growth in the
coming decades, it is essential that OECD countries (Organisation for Economic
Co-operation and Development) improve labour market performance. The OECD
publishes regular annual reports on labour markets providing detailed information
of up-to date labour market developments in the OECD countries. 65
During 2007, the OECD employment figure stood at 72% compared to an average
of 67% for the rest of the OECD countries with an unemployment rate of 5.4%,
2% less than in the OECD countries.
However, recent economic developments, such as the drastic fall of the UK
housing market and declining commodity prices sparked by US indicated that the
unemployment figure will rise to 5.8% in 2009 in the UK. However, the official
unemployment figure rose to 6.5% in January 200966. This is 0.7% above the
predicted rate.
61
http://pr.euractiv.com/node/5824
The European Foundation for the Improvement of Living and Working Conditions (Eurofound)
www.eurofound.europa.eu
63
published by Industry Leadership Board on Thursday 13 Mar 2008
62
64
OECD Employment Outlook 2008
http://www.oecd.org/document/46/0,3343,en_2649_33927_40401454_1_1_1_37457,00.html
65
OECD countries: Turkey, Poland, Hungary, Italy, Slovak Republic, Mexico, Greece, Belgium,
Luxembourg, Korea, France, Czech Republic, Spain Portugal, Germany, Ireland, Finland, Japan,
Austria, United States, United Kingdom, Australia, Canada, Netherlands, New Zealand, Sweden,
Norway, Denmark, Switzerland, Iceland
66
National Statistics Online, January 2009: http://www.statistics.gov.uk/cci/nugget.asp?ID=12
©2009 CfA
Page 40
5. Character and Composition of Current Skills
Needs
5.1 Skills Shortages
5.1.1 England
A market research report published by Reed UK identified particular shortages in
specific regions of the UK. Administrative and support staff were in demand in
Northern Ireland and technical and specialist people were needed in the South
East, the North West and the South West. The West Midlands reported skills
shortages in languages.
Crone Corkill carried out a research with focus on the South East of England and
also identified a shortage of foreign language skills. The report highlights that
‘14% of employers said that they were experiencing a shortage of bilingual office
support staff. With organisations now increasingly operating on a global scale and
the UK becoming a popular location for international headquarters and global
financial services, language ability is becoming key’.67
The National Employment Skills Survey (NESS) for 2009 was not available at the
time of this report. Therefore the NESS from 2007 was used to present data on
skills shortages as identified by employers in England.
In England, the number of vacancies for administrative staff is relatively high,
compared with other occupations. That said, employers find most administrative
vacancies fairly easy to fill, with administration accounting for the second
smallest number of HtFVs and SSVs. Approximately 13,000 vacancies in
administration are hard to fill, accounting for around 17% of all vacancies.
A very small proportion of administration job vacancies are a result of skill
shortages (12% compared with 21% overall), and there are just 3 SSVs per
every 1,000 employees, compared with the overall average of 6 per every
1,00068.
The NESS reports data which suggests that, generally, HtFVs which are not skillsrelated have less impact on businesses than HtFVs which are skills related69.
Within administration, SSVs account for approximately 68% of all HtFVs, just
slightly less than the overall figure of 71%. Assuming that within administration it
is also true that HtFVs which are not
skills-related have less impact on businesses than HtFVs which are skills related,
would suggest that at least 4 out of 5 HtFVs in administration have a considerable
impact on business. Therefore, while compared with other occupational areas
skills shortages in administration are low, those that do exist are likely to have an
impact on the businesses within which they occur.
HtFVs can be put down to a broad range of reasons. These may include issues
over location, unsocial hours, poor career progression and applicants having poor
attitudes, to name just a few. In addition to these, there are three potential
reasons for HtFVs which may be classed as SSVs. These are a lack of the required
skills, a lack of work experience and a lack of qualifications.
67
68
69
©2009 CfA
Crone Corkill, Market Report and Salary Survey 2009
LSC National Employers Survey 2007
LSC National Employers Survey 2007
Page 41
Table 10: Overall distribution of vacancies and Recruitment difficulties in
administration70
All England
Administration
Only
Administration as
% of All of
England
Vacancies
HtFVs
SSVs
HtFVs as % of
all Vac’s
SSVs as % of
all Vac’s
SSVs as %
HtFVs
619,700
183,500
130,000
30
21
71
72,925
13,000
8,900
17
12
68
12
7
7
Note: The NESS measured SSVs, initially, through an unprompted question asking for the reasons for
vacancies being hard to fill, and then through a follow-up prompted question if skills, experience or
qualifications were not initially mentioned. The data presented is the sum of both prompted and
unprompted responses
66% of SSVs in administration were attributed to a lack of skills, 39% to a lack of
experience and 22% to a lack of qualifications. It is interesting to see such a
large contrast between the lack of skills and the lack of qualifications. Ideally, one
would hope that applicants with the relevant qualifications would also have the
relevant skills, yet the data seems to suggest that the qualifications are not
providing applicants with the skills required within administration. If the number
of administration SSVs is to be reduced, focus should be primarily on skills, since
this is the largest contributing factor to SSVs. Since the obvious route to
providing applicants with skills is through qualifications, both of these contributing
factors can be tackled simultaneously.
Table 11: Extent to which SSVs are attributed to a lack of skills, a lack of
experience and a lack of qualifications71
N
o
t
e
s
Reason for SSVs
Skills
Experience
Qualification
66%
39%
22%
o Administration SSVs
Notes participants of the NESS were allowed to give multiple answers, which is
why the percentages add up to more than 100%
Administrators require a broad range of skills to carry out their tasks. The NESS
also identified the different skill areas that contribute to SSVs.
29% of administration SSVs, and 13% of all SSVs, were put down to a lack of
office and administration skills. It is not surprising that a lack of office and
administration skills should be responsible for more administration SSVs than
SSVs generally. One would expect employers to be particularly interested in
applicants for administration positions to have good office and administration
skills, and, therefore, SSVs to be a result of applicants lacking these skills.
That said it is interesting to see that a lack of office and administration skills is
not the single largest cause of administration SSVs. A lack of customer-handling
skills, technical and practical skills, oral communication skills and written
communication skills are all larger contributing factors to administration SSVs
than a lack of office and administration skills. A lack of general and professional
70
71
©2009 CfA
LSC National Employers Survey 2007
LSC National Employers Survey 2007
Page 42
IT skills was also responsible for a considerably larger percentage of
administration SSVs than for SSVs generally, showing the importance of IT skills
within the administrative role. With administrators requiring such a broad range
of skills, when tackling skill shortages, attention must be paid to all of these skill
areas, not just office and administration skills.
Figure 28: Main skills lacking by occupation where skill-shortage vacancies
exist72
Foreign Language
IT Professional
Team Working
Management
Skill Area
Numeracy
General IT
Administration
Overall
Literacy
Problem-Solving
Office/Admin
Written Communication
Oral Communcation
Technical and Practical
Customer Handling
0
10
20
30
40
50
60
Extent to Which Skill Causes SSV
With the exception of elementary occupations, all occupational areas encompass
a certain amount of administration. The figure below shows the contribution of
administration SSVs within each occupational area.
72
©2009 CfA
LSC National Employers Survey 2007
Page 43
Figure 29: The extent to which a lack of office and administration skills
contributes to SSVs in different occupation areas73
Elementary
Operatives
Occupational Area
Sales
Personal Services
Skilled Trades
Administrative
Associate Professionals
Professionals
Managers
All (2007)
All (2005)
0
5
10
15
20
25
30
35
Extent to Which Skill Causes SSV
A lack of office and administration skills contributes to more SSVs in
administration than in any other occupational area. As discussed above, it is not
surprising that this should be the case.
73
©2009 CfA
LSC National Employers Survey 2007
Page 44
Figure 30: Lacking Skills that Cause the Greatest Negative Impact74
No individual skills having the greatest impact
Sales/marketing/promotional/PR skills
Experience/lack of product knowledge
Personal attributes
Numeracy skills
Skills Lacking
Foreign language skills
IT professional skills
Literacy skills
Administration
All
Office admin skills
Written communication skills
General IT user skills
Problem solving skills
Team working skills
Management skills
Oral communication skills
Customer handling skills
Technical, practical or job-specific skills
0%
5%
10%
15%
20%
25%
30%
Negative Impact of Skill
A lack of office and administration skills is also responsible for a large percentage
of management (18%) and sales (18%) SSVs (see Figure 22). All occupational
areas examined in the NESS put a certain amount of SSVs down to a lack of office
and administration skills. Therefore, the demand for these skills is clearly not just
within administration itself, but spans – to a varying extent – across all
occupational sectors.
5.1.2 Wales
An up-to-date publication of Future Skills Wales for 2009 is not available.
5.1.3 Scotland
Administration accounts for 11% of all vacancies, 8% of all hard-to-fill vacancies,
and 9% of all skill-shortage vacancies in Scotland. This is encouraging
considering that administration accounts for 13% of employment in Scotland75.
38% of Administration vacancies are hard-to-fill, lower than the proportion of all
vacancies that are hard-to-fill (48%). However, the proportion of HtFVs that are
down to skill-shortages is higher in Administration than in Scotland generally,
71% compared to 63%. As a proportion of all vacancies rather than just hard-tofill vacancies, skill-shortages are slightly lower in Administration than overall.76
74
LSC National Employers Survey 2007
Future Skills Scotland, 2007
76
Future Skills Scotland April 2009
http://www.researchonline.org.uk/fskills/search/go.do%3Bjsessionid=C8C7E94DC97E1F925F2CD8467
0219287?action=document&ref=B12287
75
©2009 CfA
Page 45
Table 12: Administration Vacancies in Scotland77
All Scotland
Administration
Only
Administration
as % of All of
Scotland
Vacancies
76,700
HtFVs
37,000
SSVs
23,200
HtFVs as
% of
vacancies
48%
8,000
3,000
2,200
38%
11%
8%
9%
SSVs as
% of
vacancies
30%
SSVs as %
of HtFVs
63%
27%
71%
Unfortunately research carried out by Future Skills Scotland provides no
information on the extent to which a lack of office and administration skills
contributes to SSVs in different occupational areas or sectors.
The last Scottish labour market research was published in March 2008. In this
report Future Skills Scotland identified administrative and secretarial jobs to be a
major employer in Scotland. In 2007, 350,000 people in Scotland were employed
in administrative and secretarial roles, accounting for 13% of the working
population. In 2017, it is predicted that the total number of administrative and
secretarial employees will have increased by 8,000 and shall continue to
represent 13% of the working population in Scotland.
Table 13: Actual (2007) and projected (2017) administrative and secretarial
employment in Scotland78
Total employment
2007
2017
Administrative & Secretarial
350,000
355,000
Administrative & Secretarial as %
off all occupations
All occupations
13%
2,628,000
13%
2,712,000
Table 14: Projected total net demand for administrative and secretarial staff in
Scotland, 2007-201779
Administrative &
Secretarial
Administrative &
Secretarial as % off all
occupations
All occupations
Total
employment
(2007)
Expansion
demand
Replacement
demand
Job
openings
(2017)
350,000
4,000
135,000
140,000
13%
5%
15%
14%
2,628,000
84,000
922,000
1,006,000
77
Future Skills Scotland, 2007
Future Skills Scotland (2006) Labour Market Projections to 2014
79
Future Skills Scotland (2006) Labour Market Projections to 2014
78
©2009 CfA
Page 46
The slight predicted growth in the size of the administrative and secretarial
market combined with the large replacement demand means that administrative
and secretarial occupations shall require 140,000 new entrants into the area by
2017. Job openings in administrative occupations are forecast to account for
14% of all job openings.
5.1.4 Northern Ireland80
The number of persons in employment in the period March - May 2009 was
estimated at 744,000. This estimate represented a fall of 14,000 over the quarter
and a decrease of 51,000 over the year.81
The current economic problems will affect the level of demand for skills in the next
2-3 years from what the economy has been used to (and possibly the mix of skill
demand as well). In addition the supply of skills may change, for example greater
replacement of older expensive workers with younger cheaper resources,
migrants competing with the indigenous non-employed or older workers staying
in employment for longer etc.
Figure 31 below shows the breakdown of Business Services across the sectors.
Surprisingly, NI has a much higher concentration of professional occupations than
the UK average. This suggests that the structure of this sector is more
comparable to the UK average and it is in production sectors (agriculture and
manufacturing) and supporting secondary sectors (retail and construction) in
which the ‘high end’ gaps in management / professionals and consequently
graduate concentrations are.
Figure 31: Business Services occupations across sectors82
12% 15%
Elementary occupations
2% 4%
Process, plant and machie operatives
Personal services occupations
3%
2%
1%
1%
Skilled trades occupations
3%
Sales and Customer Services occupations
UK
6%
NI
17%
18%
18%
15%
Admin and secretarial occupations
Associate & technical occupations
24% 27%
Professional Occupations
Managers & Senior Officials
12%
0%
5%
10%
15%
20%
20%
25%
30%
80
Deoartment for Employment and Learning (DELNI): Forecasting Future Skills Needs in Northern
Ireland, April 2009 pp7, 12
81
Statistical Press Release 15 July 2009: http://www.detini.gov.uk/cgi-bin/downdoc?id=4610
82
©2009 CfA
Forecasting Future Skills Needs in Northern Ireland (DELNI): Table 3.5 p46
Page 47
Figure 32: Concentration of Administration across sectors83
35%
Other Personal Services
29%
Health & Social Work
19%
Education
Public Administration & Defence
70%
Business Services
69%
94%
Financial Services
42%
transport & Communications
51%
Hotel & Restaurant
29%
Retail & Distribution
14%
Construction
29%
Utilities
Manufacturing
25%
22%
Mining & Quarrying
3%
Agriculture, Forestry & Fishing
0%
20%
40%
60%
80%
100%
Figure 32 shows the distribution of Business & Administration by sector. The
Financial Services sector has the highest concentration of Business &
Administration skills with 94% of which 47% are pure administrators.
The sector following Financial Services is Public Administration & Defence which
accounts for 70% of Business & Administration skills. 34% of the workforce is
pure administrators.
The Business Services sector is supported by 69% of which 10% are Corporate
Managers and 18% are Business & Public Service Professionals. This sector is the
second highest for employing Elementary Administrators who account for 14% of
the total Business & Administration workforce.
Figure 33 below gives a clearer breakdown between pure administrators and self
administrators. Self administrators are those groups who perform their own
administration as part of their role and include Corporate Managers, Business &
Public Service Professionals and Business & Public Service Associate Professionals.
The sectors with the highest concentration of self administrators are Mining &
Quarrying, Manufacturing, Utilities, Construction, Retail & Distribution and
Business Services.
83
©2009 CfA
Forecasting Future Skills Needs in Northern Ireland (DELNI) pp78-84
Page 48
NI has a relative under-representation of managerial and professional
occupations. Many of NI’s industrial and indeed professional services activities are
not at the high end headquarter or design and strategy end of the spectrum and
thus demand for managerial and professional occupations is lower. For the key
export sectors of manufacturing and business services, the managerial and
professional gap is very evident.
©2009 CfA
Page 49
5.2 Skills Gaps
5.2.1 England
In 2007, skills gaps were reported in 6% of administration jobs in England84.
However, the 2007 CfA employer survey found the problem of skills gaps in
administration to be greater, with 16% of employers in England reporting skills
gaps among their administrators.
Between 2003 and 2005, the number of skills gaps in administration dropped by
over half, and skill gaps generally dropped by almost half. This meant that while
there was a considerable decline in skill gaps in administration, as a proportion of
all skills gaps, administration skills gaps barely changed, dropping by just 1%. In
2005, administration skills gaps accounted for 12% of all skills gaps.
The only occupational areas to account for a higher proportion of skills gaps, in
2005, were sales and elementary occupations. Skill gaps in managerial roles
accounted for 11% of skills gaps, similar to administration.
For all major occupational groups, the primary cause of skills gaps was put down
to a lack of experience or staff being recently recruited. However, the secondary
reasons varied, in administration, being the employer’s failure to train staff85.
Table 15: Skills gaps in administration between 2003 and 200786
Total Number
of Skills Gaps
2003
2004
2005
2007
2,400,000
1,540,000
1,265,000
1,361,000
Administration
Skills Gaps as
Proportion of
All Skills Gaps
13%
12%
12%
14%
Approximate
Number of
Administration
Skills Gaps
310,000
180,000
150,000
190,000
As shown in Figure 33, the NESS identified the extent to which different skill
areas contribute to skills gaps in administration.
A lack of office administration skills was not only the most common cause of skills
gaps in administration jobs, but also significantly higher than average,
contributing to 51% of administration skills gaps, compared with 18% of all skills
gaps. Office and administration skills are required more by administrators than in
other occupations, and, therefore, it is not unusual that a lack of office and
administration skills should be such a contributing factor to skills gaps in this
area.
A lack of customer-handling skills and general IT user skills were also reported as
contributing to over 50% of administration skills gaps. A lack of skills in problemsolving, IT professional, written communication and literacy were also more
common than average in administration. All of these skills are required by
administrators and demanded by employers.
84
LSC National Employers Survey 2007
LSC National Employers Survey 2007
86
LSC National Employers Survey 2007
85
©2009 CfA
Page 50
Figure 33: The extent to which lacking skills areas contribute to skills gaps
in administration jobs and skills gaps generally87
Foreign
IT professional
Numeracy
Office or Admin
Skill Area
Literacy
General IT
Administration
Overall 2007
Management
Overall 2005
Written Communication
Problem-Solving
Team Working
Oral Communication
Customer-Handling
Technical and Practical
0
10
20
30
40
50
60
Extent of Contribution
Note: Figures are a proportion of skills gaps, not employees or employers.
A lack of office and administration skills contribute to far more skills gaps in
administration than skills gaps in other occupational groups. As explained
previously, this finding is not unexpected.
A lack of office and administration skills contributes to some skills gaps in all
occupational groups to a varying degree. Managerial occupations also demand a
relatively high degree of office and administration skills.
87
©2009 CfA
LSC National Employers Survey 2007
Page 51
Figure 34: The extent to which a lack of office and administration skills
contribute to skills gaps in different occupational areas88
Elementary
Operatives
Occupational Group
Sales
Personal Services
Skilled Trades
Administrative
Associate Professionals
Professionals
Managers
Overall
0
10
20
30
40
50
60
Extent of Contribution
The NESS identified that the extent to which skills gaps affect administration vary
across regions in England. Skills gaps were highest in London, where 17% of
skills gaps were in administration. Administration makes up the highest
proportion of the workforce in London and in the West Midlands. The North East
and the South West were found to have the lowest proportion of administration
skills gaps.
88
©2009 CfA
LSC National Employers Survey 2007
Page 52
Figure 35: Skills gaps in administration across the regions of England89
Yorkshire and the
Humber
West Midlands
South West
Region
South East
North West
Administration
Employment
Profile
North East
Skills Gaps in
Administration
London
East Midlands
Eastern
All England
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Percentage (%)
A lack of office and administration skills was found, by the NESS, to vary across
regions in England. In London and eastern England, a lack of office and
administration skills was found to contribute to 24% of skills gaps, 6% up on
England as a whole. In the South East and South West, a lack of office and
administration skills contributed to only 11% of skills gaps, 7% lower than the
average in England.
89
©2009 CfA
LSC National Employers Survey 2007
Page 53
Figure 36: The extent to which a lack of office and administration skills
contribute to skills gaps in different English regions90
Yorkshire and the Humber
West Midlands
South West
Region
South East
North West
North East
London
East Midlands
Eastern
All England
0%
5%
10%
15%
20%
25%
30%
Extent of Contribution
The figure 37 on the following page shows the skills gaps in administration
occupations within each of the SSCs.
The Skills for Justice SSC, reported the highest proportion of skills gaps in
administration (41%). Government Skills, which was also found to have a high
proportion of SSVs, reported 37% of skills gaps to be in administration, and
Financial Services reported 26% of skills gaps in administration.
90
©2009 CfA
LSC National Employers Survey 2007
Page 54
Figure 37: Skills gaps in administration occupations within SSCs91
Non-SSC employers
SkillsActive
Creative and Cultural
Skillset
Skills for Care and Development
Skills for Health
Lifelong Learning UK
Skills for Justice
Government Skills
e-skills UK
Sector Skills Council
Asset Skills
Financial Services
Skills for Logistics
GoSkills
People 1st
Skillsmart Retail
Automotive Skills
SummitSkills
ConstructionSkills
Energy & Utility Skills
Semta
Skillfast-UK
Improve
Proskills
Cogent
Lantra
All
0%
5%
10% 15% 20% 25% 30% 35% 40% 45%
Percent of Skills Gaps in Admin
91
©2009 CfA
LSC National Employers Survey 2007
Page 55
5.2.2 Wales
There was no new data available at the time of publication and information used
from Future Skills Wales 2005 in the previous report still applies.
5.2.3 Scotland
There has been no new research and the information below remains as published
by Future Skills Scotland in 2006 when it reported skills gaps of 8% in
Administration jobs.
Problem Solving still ranks as the core skill with the highest skills gap in Scotland,
accounting for 51%, the third highest skills gap among the Scottish workforce.
Surprisingly, Numeracy was rated at only 18% and bottom of the list of concerns.
There is no information specific to the skill areas that contribute to Administration
skills gaps, or how a lack of office and administration skills specifically contribute
to skills gaps generally. All existing data is published in the Demand report from
June 2008.
5.2.4 Northern Ireland92
NI has a relative under-representation of managerial and professional
occupations. Many of NI’s industrial and indeed professional services activities are
not at the high end headquarter or design and strategy end of the spectrum and
thus demand for managerial and professional occupations is lower. For the key
export sectors of manufacturing and business services, the managerial and
professional gap is very evident.
92
Department for Employment and Learning (DELNI): Forecasting Future Skills Needs in Northern
Ireland, April 2009 pp7, 12
©2009 CfA
Page 56
6. Future Skills Needs
6.1 Forecast Shifts in Patterns of Employment
The shape of the working population is dynamic, and it is the aim of the CfA to
remain one step ahead of changes. We work to ensure that our standards
continue to accommodate the requirements of both the changing Administration
and Self Administration workforce. It is therefore essential to understand not only
how Administration and Self Administration looks today, but also how it is likely
to look in the future.
The latest Working Futures Report published in December 2008 provides a
detailed analysis of the changing Administration and Self Administration labour
market.
6.1.1 Designated and Specialist Administration
Data on growth and projected changes in the size of the Designated and
Specialist Administration workforce are taken from Working Futures 200893, which
makes calculations based on the administration workforce as defined by
SOC2000.
Table 16: Projections of the Administration Workforce between 1997 and
201794
UK: Employment
Levels
Administration
Percentage of
Workforce
1997
2007
2017
3,927,000
14%
3,715,000
12%
3,319,000
10%
According to Working Futures (2008), in 2017 the Designate and Specialist
Administration workforce (usually at Levels 2-5 in the QCF and 5-9 in the SCQF)
will account for 10% of the total workforce – a considerable proportion. However,
since 1997, the size of the administration workforce has been in gradual decline.
The wider use of IT in administration roles, improved communication systems and
the increase in managerial and professional occupations undertaking their own
administration can be cited as some of the reasons for this decrease.
The decline should not be taken to mean that administration will provide poor
career prospects in the future. Administration will continue to employ a large
number of people, accounting for a significant proportion of the entire UK working
population.
93
94
©2009 CfA
Wilson, R., Homenidou, A. and Dickerson, A, Working Futures (December 2008)
Wilson, R., Homenidou, A. and Dickerson, A, Working Futures (December 2008)
Page 57
Table 17: Employment Levels for Administrative, Clerical and Secretarial
Occupations by Industry between 1997 and 201795
Industry
Agriculture
Mining, quarrying &
utilities
Food, drink &
tobacco
Textiles & clothing
Wood, paper &
publishing
Chemicals & non
mental materials
Metal and metal
goods
Engineering
Transport
equipment
Manufacturing nes
& recycling
Construction
Distribution
relating to motors
Wholesale
distribution nes
Retailing
distribution nes
Hotels and catering
Transport and
storage
Post &
telecommunications
Banking &
insurance
Professional
services
Computing &
related services
Other business
services
Public admin and
defence
Education
Health & social
work
Miscellaneous
services
Total
1997
000s
14
% Total
2.4
2007
000s
12
% Total
2.6
2017
000s
8
% Total
2.3
37
16.0
28
15.6
22
14.8
54
34
10.6
8.2
36
9
8.4
6.9
26
4
6.6
4.0
85
13.7
52
10.2
34
7.3
64
8.9
45
8.4
34
7.3
31
91
5.1
9.6
26
54
6.1
8.8
22
39
6.2
8.1
21
5.1
23
7.1
24
8.8
23
118
9.7
6.8
16
134
8.0
6.1
13
125
6.1
5.3
29
4.3
34
5.2
31
4.6
78
5.9
82
6.4
70
5.3
374
124
13.2
7.1
305
115
9.7
5.8
261
112
7.8
5.1
154
13.2
195
14.5
215
15.3
83
18.2
95
19.6
97
20.7
515
47.6
469
42.3
431
36.1
113
18.1
133
15.4
119
13.6
53
15.0
104
18.0
91
12.9
746
25.6
739
18.4
715
14.6
429
153
31.1
7.5
413
147
26.8
5.8
343
106
22.4
4.0
330
11.1
281
7.6
218
5.3
172
3927
10.6
13.9
167
3715
8.4
11.9
159
3319
7.2
10.0
Notes: In 2017, the industry with the largest Administration workforce is expected to be
the banking and insurance industry. Over 36% of the banking and insurance industry will
be made up of administrative, clerical and secretarial occupations. This is followed by
public administration and defence (22.4%) and the post and telecommunications industry
(20.7%).
95
©2009 CfA
Wilson, R., Homenidou, A. and Dickerson, A, Working Futures (December 2008)
Page 58
In 2017, the industry with the lowest employment levels for administrative,
clerical and secretarial occupations is expected to be Agriculture with (2.3%),
followed closely by Education and Textiles and Clothing, both at 4%.
In contrast to the gradual decline in size of the Administration workforce since
1997, the following three industries have seen a small growth in employment
levels for administrative, clerical and secretarial occupations between 1997 and
2007, with the growth expected to continue until 2017:
•
•
•
©2009 CfA
Post and Telecommunications
Transport Equipment
Transport and Storage
Page 59
Table 18: Projected Change in Total Administrative, Clerical and Secretarial
Employment by Region between 2007 and 201796
Region
London
South East
East of England
South West
West Midlands
East Midlands
Yorkshire & the
Humber
North West
North East
England
Wales
Scotland
Northern Ireland
United Kingdom
Change (in
000’s)
-147
-64
-32
-28
-25
-23
-10
Percent Change
-27.3
-12.3
-9.8
-9.3
-7.8
-9.5
-3.1
Percent Change
per Annum
-3.1
-1.3
-1
-1
-0.8
-1
-0.3
-15
-6
-349
-10
-33
-4
-396
-3.4
-4.6
-11.2
-6.6
-9.9
-3.6
-10.7
-0.3
-0.5
-1.2
-0.7
-1
-0.4
-1.1
Between 2007 and 2017, the Administrative, Clerical and Secretarial workforce is
expected to decline by -10.7% across the UK. The biggest decline is taking place
in London (-27.3%). However this is expected due to the size of the working
population in London.
The English regions with the lowest level of decline (in percent change) are
Yorkshire and Humber (-3.1%) and North West (-3.4%).
In the Devolved Administrations, the nation with the lowest level of decline in
total Administrative, Clerical and Secretarial employment is Northern Ireland
(-3.6%). Followed by Wales (-6.6%), Scotland (-9.9%) and England (-11.2%).
96
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Page 60
Table 19: Projected Change in Male and Female Administrative, Clerical and
Secretarial Employment by Region between 2007 and 201797
Region
London
South East
East of England
South West
West Midlands
East Midlands
Yorkshire & the
Humber
North West
North East
England
Wales
Scotland
Northern Ireland
United Kingdom
Change (in 000’s)
Male
Female
-25.4
-35
-7.9
-8
-8.6
-5
-3.5
-2
18
13
0.5
0
23
18
24
4
8
5
8
5
26
23.1
13.4
1.2
14.8
9.8
18.7
3.1
Percent Change
Male
Female
-2.9
-3.2
-0.8
-1.4
-0.9
-1.1
-0.4
-1.1
1.7
-1.6
0.1
-1.3
2.1
-1.2
Percent Change per Annum
Female
Male
-27.9
-35
-13.4
-8
-10.1
-5
-10.7
-2
-14.9
13
-11.9
0
-11.8
18
2.1
1.3
0.1
1.4
0.9
1.7
0.3
-11.9
-9.4
-14.7
-13.1
-15.9
-10.9
-14.6
-1.3
-1
-1.6
-1.4
-1.7
-1.2
-1.6
24
4
8
5
8
5
26
Between 2007 and 2017, the projected change in male and female
Administrative, Clerical and Secretarial employment is looking very different.
Female Administrative, Clerical and Secretarial employment across the UK is
expected to decline by -14.6% (which is in line with the overall projected change
in total Administrative, Clerical and Secretarial levels). However male
Administrative, Clerical and Secretarial employment is expected to grow across
the UK by 3.1%. This is very encouraging as more males will be entering
Administrative, clerical and Secretarial occupations in the future. This will help
support a more even spilt of males and females working in Administrative,
Clerical and Secretarial occupations, which is encouraged by the CfA.
In the Devolved Administrations, the nation with the highest level of projected
change in male Administrative, Clerical and Secretarial employment is Northern
Ireland (18.7%), followed by Wales (14.8%), Scotland (9.8%) and England
(1.2%).
97
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Wilson, R., Homenidou, A. and Dickerson, A, Working Futures (December 2008)
Page 61
Table 20: The Replacement Demand in the Administration Workforce between
2007 and 201798
Administration
2007-2017
Expansion
Demand
-396,000
2007-2017
Replacement
Demand
1,549,000
2007-2017 Net
Total Demand
1,153,000
As we have seen, by 2017, expansion demand (the creation of new jobs for new
entrants) for administrative, clerical and specialist occupations will be a negative
396,000. However, the replacement demand is a positive 1,549,000, meaning
that the total requirement for new Administration jobs between 2007 and 2017
will be 1,153,000.
This is mainly due to the number of individuals in the workforce who will be
retiring in the 10-year period from 2007 onwards, or leaving the occupation to
follow other careers. Therefore it is important that young people continue to start
their employment careers in Administration. This demonstrates that
Administration training and development needs to be a high priority to ensure
that the significant replacement demand for Administrative occupations is met by
2017.
Table 21: The Replacement Demand in the Administration Workforce by
Region between 2007 and 201799
Region
London
South East
Expansion
Demand (000s)
-147
-64
Replacement
Demand (000s)
222
220
Total Net Demand
(000s)
75
156
East of England
-32
139
107
South West
-28
126
98
West Midlands
-25
135
110
East Midlands
-23
100
78
Yorkshire & the
Humber
-10
128
119
North West
North East
England
Wales
Scotland
Northern Ireland
United Kingdom
-15
-6
-349
-10
-33
-4
-396
177
58
1305
64
138
42
1549
163
51
956
54
105
38
1153
Between 2007 and 2017 the net demand for Administrative, Clerical and
Secretarial jobs across the UK is 1,153,000. The English regions with the highest
net demand for administration jobs are the North West (163,000) followed by the
South East (156,000) and Yorkshire and Humber (119,000).
©2009 CfA
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Wilson, R., Homenidou, A. and Dickerson, A, Working Futures (December 2008)
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Wilson, R., Homenidou, A. and Dickerson, A, Working Futures (December 2008)
Page 62
The region with the lowest net demand is the North East with (51,000). London
surprisingly has the second lowest net demand (75,000). This is because London
as a region has the highest replacement demand (222,000), but also the highest
negative expansion demand (-147,000), making the total net demand relatively
small compared to some of the other English regions.
In the four nations of the UK, the nation with the highest net demand for
administration jobs is England (956,000), followed by Scotland (105,000), Wales
(54,000) and Northern Ireland (38,000). This is in line with the size of the
administration working population in these nations.
Table 22: The Replacement Demand in the Administration Workforce by
Industry between 2007 and 2017100
Industry
Agriculture
Mining, quarrying &
utilities
Food, drink & tobacco
Textiles & clothing
Wood, paper & publishing
Chemicals & non mental
materials
Metal and metal goods
Engineering
Transport equipment
Manufacturing nes &
recycling
Construction
Distribution relating to
motors
Wholesale distribution nes
Retailing distribution nes
Hotels and catering
Transport and storage
Post & telecommunications
Banking & insurance
Professional services
Computing & related
services
Other business services
Public admin and defence
Education
Health & social work
Miscellaneous services
Total
Net Change
Replacement
Demands
000s %
5
43.3
Total
Requirements
000s
%
1
11.7
000s
-4
%
-31.7
-6
-9
-6
-18
-20.6
-26.4
-60.1
-34.7
11
15
4
21
39.9
40.8
41.7
41.1
5
5
-2
3
19.3
14.4
-18.4
6.4
-12
-4
-15
1
-25.8
-13.7
-27.4
4.8
18
11
22
9
41.0
40.6
41.2
39.6
7
7
7
10
15.2
26.9
13.8
44.4
-4
-9
-22.3
-6.7
7
55
41.6
40.9
3
46
19.4
34.2
-3
-12
-44
-3
21
2
-37
-14
-8.6
-14.7
-14.6
-2.4
10.6
1.8
-8.0
-10.5
13
33
131
48
78
37
191
56
39.3
40.6
43.0
41.7
39.9
39.2
40.7
41.7
10
21
87
45
98
39
153
42
30.7
25.9
28.4
39.3
50.5
41.0
32.7
31.2
-13
-24
-71
-41
-63
-9
-397
-12.9
-3.2
-17.1
-27.9
-22.4
-5.3
-399.8
44
312
172
64
122
69
1548
42.2
42.2
41.6
43.7
43.6
41.2
1032.3
31
288
101
23
60
60
1150
29.4
39.0
24.5
15.8
21.2
35.9
632.8
Notes Between 2007 and 2017, the industries with the highest replacement
demand in the administration workforce across the UK is the other business
services industry (312,000) followed by banking and insurance (191,000) and
public administration and defence (172,000).
100
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Wilson, R., Homenidou, A. and Dickerson, A, Working Futures (December 2008)
Page 63
In contrast, the only industry with an overall negative total requirement for the
administration workforce is the textiles and clothing industry. This is because this
industry has a greater negative net change (-6,000) than a replacement demand
(4,000), making the overall requirement negative 2,000, which means that
administration jobs will be going in this industry and will not be replaced over the
next 8 years until 2017.
©2009 CfA
Page 64
6.1.2 Self Administration
Data on growth and projected changes in the size of the Self Administration
workforce are taken from Working Futures 2008101.
The following five major occupational groups are used to calculate the growth and
projected change of the Self Administration workforce, as defined by SOC2000:
•
•
•
•
•
Managers and Senior Officials
Professional Occupations
Associate Professional and Technical Occupations
Personal Service Occupations
Sales and Customer Service Occupations.
Table 23: Projections of the Self Administration Workforce between 1997 and
2017 (excluding the Self Employed Workforce)102
UK: Employment Levels
Self Administration
Percentage of
Workforce
1997
14,316,000
51%
2007
18,291,000
59%
2017
21,006,000
63%
In 2017 the Self Administration workforce will account for 63% of the total UK
workforce, which equates to nearly two thirds of the total UK workforce requiring
some administration skills to carry out their roles competently.
Between 1997 and 2007, the Self Administration workforce grew by almost 4
million. By 2017, this growth is projected to continue, reaching an estimated
21,006,000.
101
102
©2009 CfA
Wilson, R., Homenidou, A. and Dickerson, A, Working Futures (December 2008)
Wilson, R., Homenidou, A. and Dickerson, A, Working Futures (December 2008)
Page 65
Table 24: Employment Levels for Self Administration by Industry between
1997 and 2017103
Industry
Agriculture
Mining, quarrying &
utilities
Food, drink & tobacco
Textiles & clothing
Wood, paper &
publishing
Chemicals & non mental
materials
Metal and metal goods
Engineering
Transport equipment
Manufacturing nes &
recycling
Construction
Sales and Maintenance
Wholesale distribution
nes
Retailing distribution
nes
Hotels and catering
Transport and storage
Post &
telecommunications
Banking & insurance
Professional services
Computing & related
services
Other business services
Public admin and
defence
Education
Health & social work
Miscellaneous services
Total
1997
000s
110
% Total
18.8
2007
000s
107
81
150
97
35.2
29.6
23
77
154
50
224
36.2
231
236
131
363
107
32.7
26.2
38.4
26.5
210
130
272
101
56
387
369
23.6
22.3
54.5
735
1817
701
318
108
454
411
% Total
23.7
% Total
27.7
69
156
43
46.2
39.1
45.2
246
52.7
38.8
30.9
44.1
31
198
128
232
97
43.3
35.4
47.8
35
59
563
405
29.4
25.8
62.8
68
685
435
33
29.1
65.6
55.6
806
63.2
866
65.4
64.1
40.1
27.2
2094
887
450
66.7
44.5
33.5
2344
1026
513
69.7
46.6
36.5
139
519
602
28.7
46.7
151
635
629
32.3
53
23.5
41.9
42.1
35.4
36.5
2017
000s
98
45.5
241
1675
68.1
57.4
394
2662
67.7
66.2
514
3488
73
71.1
650
1584
2292
992
14283
47.1
77.4
76.9
61
1007.3
826
2106
3086
1367
18297
53.5
82.6
83.8
68.2
1151.3
897
2313
3599
1581
21011
58.4
86.9
88.2
71.9
1253.1
In 2017, the industry with the largest Self Administration workforce is expected
to be the Health and Social Work industry. Over 88% of the Health and Social
Work industry will be made up of Self Administration occupations including
managers, professional occupations, associate professionals and technical
occupations, personal service and sales and customer service occupations. This is
closely followed by the Education industry (86.9%) and the Other Business
Services industry (71.1%). In 2017, the industry with the lowest employment
levels for Self Administration is expected to be Agriculture with (27.7%), followed
closely by the Construction industry (29.1%) and Post and Telecommunications
industry (32.3%).
103
©2009 CfA
Wilson, R., Homenidou, A. and Dickerson, A, Working Futures (December 2008)
Page 66
Table 25: Projected Change in Total Employment for Self-Administration by
Region in 2007-2017104
Region
London
South East
East of
England
South West
West Midlands
East Midlands
Yorkshire &
the Humber
North West
North East
England
Wales
Scotland
Northern
Ireland
United
Kingdom
Change (in 000’s)
Percent Change
Percent Change per
Annum
7.4
6.7
6.9
595
410
248
80.2
72
72.6
232
206
190
190
74.2
67
72.9
65.6
6.9
6.2
6.8
6.1
245
58
2373
101
171
72
63
45.4
72
64.6
56.3
72.7
5.9
4.4
6.7
6.1
5.4
6.8
2717
70.6
6.7
Between 2007 and 2017, the Self Administration workforce is expected to grow
by 2,717,000 across the UK. The biggest growth is taking place in London
(595,000). However this is expected due to the size of the working population in
London.
In the Devolved Administrations, the nation with the highest level of growth in
Self Administration employment is Scotland (171,000), followed by Wales
(101,000), and Northern Ireland (72,000).
Table 26: The Replacement Demand in the Self Administration Workforce
between 2007 and 2017 (excluding the Self Employed Workforce)105
Self
Administration
2007-2017
Expansion
Demand
2,717,000
2007-2017
Replacement
Demand
6,708,000
2017-2017 Net
Total Demand
9,426,000
The total demand for the Self Administration workforce, in the decade ending
2017, is huge, estimated to be over 9.4 million. This means that while the
Designated and Specialist Administration workforce is projected to decrease in
size, the workforce that requires the skills to carry out their own administration
(the Self Administration workforce) is going to grow considerably.
©2009 CfA
104
Wilson, R., Homenidou, A. and Dickerson, A, Working Futures (December 2008)
105
Wilson, R., Homenidou, A. and Dickerson, A, Working Futures (December 2008)
Page 67
Table 27: Replacement Demand in Self-Administration by Region in, 20072017106
Region
London
South East
East of
England
South West
West Midlands
East Midlands
Yorkshire &
the Humber
North West
North East
England
Wales
Scotland
Northern
Ireland
United
Kingdom
Expansion
Demand (000’s)
595
410
248
Replacement
Demand (000’s)
1114
973
603
Overall Requirement
(000’s)
1711
1381
851
232
206
190
190
567
543
442
521
798
751
633
712
245
58
2373
101
171
72
714
236
5713
284
539
173
958
293
8086
385
710
245
2716
6710
9426
Between 2007 and 2017 the net demand for Self Administration occupations
across the UK is 9,426,000. The English regions with the highest net demand for
Self Administration occupations are London (1,711,000) followed by the South
East (1,381,000) and the North West (958,000).
The region with the lowest net demand for Self Administration occupations is the
North East with (293,000).
In the four nations of the UK, the nation with the highest net demand for Self
Administration occupations is England (8,086,000), followed by Scotland
(710,000), Wales (385,000) and Northern Ireland (245,000). This is in line with
the size of the Self Administration working population in these nations.
106
©2009 CfA
Wilson, R., Homenidou, A. and Dickerson, A, Working Futures (December 2008)
Page 68
Table 28: Projected Change in Self Administration by the workforce industry
between 2007 and 2017107
Industry
Agriculture
Mining, quarrying &
utilities
Food, drink & tobacco
Textiles & clothing
Wood, paper &
publishing
Chemicals & non mental
materials
Metal and metal goods
Engineering
Transport equipment
Manufacturing nes &
recycling
Construction
Sales and Maintenance
Wholesale distribution
nes
Retailing distribution
nes
Hotels and catering
Transport and storage
Post &
telecommunications
Banking & insurance
Professional services
Computing & related
services
Other business services
Public admin and
defence
Education
Health & social work
Miscellaneous services
Total
Net Changes
000s
-10
% Total
Replacement
Demands
000s
% Total
40
Total
Requirement
000s
% Total
28
-7
4
-8
26
50
17
20
56
10
15
80
96
-12
-2
-38
-5
70
43
90
33
57
40
50
27
9
123
30
21
184
133
29
189
165
60
276
337
248
139
63
786
330
152
1034
468
215
12
117
26
47
179
211
57
294
238
121
825
130
931
251
1756
71
206
514
214
2715
284
867
1231
499
6710
357
1070
1744
713
9425
Between 2007 and 2017, the industries with the highest replacement demand for
the Self Administration workforce across the UK is the Health and Social Work
industry (1,231,000) followed by the Other Business Services industry (931,000)
and the Education industry (867,000).
In contrast, the industries with lowest replacement demand for the Self
Administration workforce is the textiles and clothing industry (17,000), following
by the Mining, Quarrying and Utilities industry (26,000). This is expected as in
the UK, these industries overall are in decline.
107
©2009 CfA
Wilson, R., Homenidou, A. and Dickerson, A, Working Futures (December 2008)
Page 69
6.1.3 Summary
The administration workforce has been decreasing in size over the years and this
is expected to continue. By 2017, the size of this workforce is expected to be
3,319,000, making up 10% of the whole UK workforce.
However, because of the large replacement demand, administration will continue
to provide many jobs in the future. Between 2007 and 2017, it is estimated that
administration will require an input of 1,153 million people. These new entrants
into the administration workforce will require training to provide them with the
skills demanded by employers.
As well as a large replacement demand for administrators in the future, the
demand for Self Administration skills will grow massively. This is due to the
projected growth in the wider Self Administration workforce who has to carry out
some or all of their own administration tasks. Self Administration occupations
include managers, professional occupations, associate professionals and technical
occupations, personal service and sales and customer service occupations.
By 2017, the size of the Self Administration workforce is expected to be over 21
million, making up 63% of the whole UK workforce.
©2009 CfA
Page 70
7. Governance, Regulated Administration and Senior
Administration Management
The field of Governance has emerged in recent years as a matter of great
importance. Today there is a clear need to define the personal attributes and
standards of performance requirements of the estimated more that five million
executive and non executive directors who lead organisations in the UK. This is
because:
•
•
Both the governing body and individual directors have legal, regulatory,
financial, ethical, environmental and social responsibilities; and
Senior Managers are responsible for the implementation of the decisions
made by the directors on the Governing Body.
In outline terms governance involves108:
•
•
•
•
•
Establishing and monitoring an effective board structure and composition
Complying with laws, regulations and voluntary codes of practice
Developing effective relationships between the company and its
shareholders
Ensuring honest and responsible conduct and behaviour throughout the
company
Dealing competently with relevant stakeholders such as employees, Local
authorities, community members and clients.
The circumstances of every organisation are different, so a ‘one size fits all’
solution cannot be applied to Governance. Each individual company needs
different things from its Board at each stage of its life.
7.1 Profile of the Governance Workforce
At Governance level, Companies House estimates there are 7 million registered
directorships.
The Governance workforce therefore consists of approximately 7.4 million
strategic decision-makers, comprising registered directors, company and
chartered secretaries who are responsible for the governance functions in the
public, private and not-for-profit sectors. This market includes the following.
Table 29: Size of the Governance Workforce using SOC codes, 2005-2008109
Year
Governance
108
©2009 CfA
2005
361,000
2006
381,000
2007
378,000
2008
438,000
Pierce C and Glanville R. (2007) Governance Matters in Growing Businesses: Published by CfA
Page 71
7.2 Board Structures110
UK boards are based on a unitary or one tier board structure. The Combined
Code (2008, p 5) states that “every company should be headed by an effective
board, which is collectively responsible for the success of the company.” The
Code states that “the board’s role is to provide entrepreneurial leadership of the
company within a framework of prudent and effective controls which enables risk
to be assessed and managed. The board should set the company’s strategic
aims, ensure that the necessary financial and human resources are in place for
the company to meet its objectives and review management performance. The
board should set the company’s values and standards and ensure that its
obligations to its shareholders and others are understood and met.”
In 2008, a World Economic Forum ranked the UK as being 15th out of 134
countries in terms of the efficacy of their corporate boards where investors and
boards exercise strong supervision of management decisions. 111
7.3 Board Composition
7.3.1 Size of Boards112
The Combined Code (2008, p 7) recommends that the board should not be so
large as to be unwieldy. The board should be of sufficient size that the balance of
skills and experience is appropriate for the requirements of the business and that
changes to the board’s composition can be managed without undue disruption.
The UK Board Index (2009) 113 identified that the average board size is 10.5.
Research by Marx (2009) 114 identified that board size in the FTSE 100 varied
widely. Companies such as Autonomy Corporation have only 6 members and
companies such as WPP, SABMiller, Barclays and Royal Bank of Scotland have 15
or more members.
A survey of FTSE 250 companies in 2007 by Deloitte identified that a board’s
average size was 8. 115 According to a 2007 survey UK companies have slightly
above average size boards with 8.3 members compared to a European average of
12.8 members. 116
Research undertaken for the Higgs Report in 2002 indicated that:
110
Pierce C. (2009) World Guide to Corporate Governance: Volume 1 Corporate Governance in the EU
(2009), GMB Publishing Ltd, London.
111
World Economic Forum (2008) Executive Opinion Survey 2008-9. Available at: www.weforum.org
112
Pierce C. (2009) World Guide to Corporate Governance: Volume 1 Corporate Governance in the EU
(2009), GMB Publishing Ltd, London.
113
Spencer Stuart (2009) UK Board Index 2008. London: Spencer Stuart. Available at:
www.spencerstuart.com
114
Marx, E. (2009) Route to the top: what does it take for women to get onto FTSE 100 boards?
London: Heidrick and Struggles
115
Willman, J. (2007) Big companies cull executive directors, Financial Times, 31 December 2007, p 2
116
Heidrick and Struggles (2007) Raising the bar: Corporate Governance in Europe. Paris: Heidrick
and Struggles
©2009 CfA
Page 72
•
•
the largest 100 listed companies on the London Stock Exchange had a
board size of 11.5; and
the average board size for all listed companies was 6.7.
7.3.2 Director Mix117
The UK Board Index (2009) 118 identified that non executive directors make up 65
per cent of boards excluding the chairman and that 92 per cent of non executive
directors are deemed to be independent.
A survey of the FTSE 250 boards in 2007 by Deloitte identified that the average
board had 5 non executive directors and 3 executive directors. 119
Broadly similar results were obtained in research undertaken for the Higgs Report
in 2002 120 which indicated that:
•
•
the largest 100 companies on the London Stock Exchange had 6 non
executives; and
the average number of non executives for all companies listed on the
London Stock Exchange was 2.7.
The research also indicated that the split between executive and non-executive
directors shows a trend for the percentage of non-executive directors to increase
with market capitalisation.
117
Pierce C. (2009) World Guide to Corporate Governance: Volume 1 Corporate Governance in the EU
(2009), GMB Publishing Ltd, London.
118
Spencer Stuart (2009) UK Board Index 2008. London: Spencer Stuart. Available at:
www.spencerstuart.com
©2009 CfA
119
Willman, J. (2007) Big companies cull executive directors, Financial Times, 31 December 2007, p 3
120
Available at: www.ecgi.org
Page 73
7.3.4 Board Performance121
Roberto Mura in his research (2006) 122 investigated the relation between
company performance, ownership structure and board composition of UK firms
for the period 1991-2001. His results indicated that the direction of causality
runs from board composition to performance. He found the proportion of nonexecutives on the board, but not their proportional ownership, was significantly
and positively related to company performance.
Neill and Dulewicz (2007)
that:
•
•
•
123
in their research into unlisted companies identified
the quality of personal relationships between board members such as
“trust”, “mutual respect” and “working relationship with CEO” had a
high positive impact upon board performance;
the presence of non executive directors in boards of unlisted
companies has no impact upon board performance; and
the larger the size of the board in an unlisted company, the greater the
experience of a negative impact upon board performance.
The ten strongest attributes contributing to board performance are shown in table
30.
Table 30: The ten strongest attributes contributing to board performance
1
2
3
4
5
6
7
8
9
10
121
124
Directors are keen and free to ask questions.
The board is willing to take tough decisions.
Shared ownership of vision, mission and values.
Personal relations are harmonious.
Board knows exactly how it adds value to the business.
The board operates as a cohesive team.
High level of candour and openness.
Chairman’s style invites initiatives from board members.
Genuine listening is consistently achieved.
Bad news is confronted readily.
Pierce C. (2009) World Guide to Corporate Governance: Volume 1 Corporate Governance in the EU
(2009), GMB Publishing Ltd, London.
122
Mura, R. (2006) Firm Performance: Do Non-Executive Directors Have a Mind of Their Own?
Evidence from UK Panel Data. Available at: http://ssrn.com/abstract=676971
123
Neill, D. and V. Dulewicz (2007) Inside the black box: the effectiveness of boards of directors of
unlisted companies, Henley International Conference on Corporate Governance and Board Leadership,
October 2007
124
Neill, D. and V. Dulewicz (2007) Inside the black box: the effectiveness of boards of directors of
unlisted companies, Henley International Conference on Corporate Governance and Board Leadership,
October 2007
©2009 CfA
Page 74
The twelve most common areas of board dysfunction are shown in table 31.
Table 31: The twelve most common areas of board dysfunction
1
2
3
4
5
6
7
8
9
10
11
12
125
Personal relationships are conflict ridden.
Listening is more apparent than real.
Debates are conducted in a highly autocratic and directive fashion.
The board operates as competing individuals.
The chairman’s style discourages initiatives from board members.
The quality of debate is superficial or trivial.
The board avoids tough decisions.
A lack of preparation impairs debate and decisions.
The chairman’s style is extremely forceful.
Clear lack of trust and loyalty between board members.
High level of inhibition or secrecy.
Emphasis of discussions is on past performance.
Dulewicz and Herbert (2007)
•
•
•
•
•
126
have identified that:
Only 14 per cent of companies in the FTSE 350 use external facilitators
to assist in the board evaluation process.
The vast majority of companies believe that it is appropriate for only
the board to be informed of the board evaluation (excluding personally
attributable and other properly confidential details). 66 per cent of
respondents believed it to be inappropriate for major institutional
shareholders to be made aware of board evaluation findings.
74 per cent of companies that have a code of ethics do not incorporate
its contents into the performance assessment of their board or
committees.
In 84 per cent of cases the nomination committee undertakes
evaluation of the chairman’s performance.
The most common attributes that non executive directors were
evaluated on were: ability and willingness to challenge and probe;
contribution and advice on strategy; and independent attitude of mind.
7.3.5 Chairman and CEO Separation127
The Combined Code (2008, p 7) recommends that the roles of chairman and chief
executive should not be exercised by the same individual and that the division of
responsibilities between the chairman and chief executive should be clearly
established, set out in writing and agreed by the board. The chairman should on
125
Neill, D. and V. Dulewicz (2007) Inside the black box: the effectiveness of boards of directors of
unlisted companies, Henley International Conference on Corporate Governance and Board Leadership,
October 2007
126
Dulewicz, V. and P. Herbert (2007) Current practice of FTSE 350 boards concerning the
appointment, evaluation and development of directors, boards and committees post the Combined
Code, Henley International Conference on Corporate Governance and Board Leadership, October 2007
127
Pierce C. (2009) World Guide to Corporate Governance: Volume 1 Corporate Governance in the EU
(2009), GMB Publishing Ltd, London.
©2009 CfA
Page 75
appointment meet independence criteria and a chief executive should not go on
to be chairman of the same company. If exceptionally a board decides that a
chief executive should become chairman, the board should consult major
shareholders in advance and should set out its reasons to shareholders at the
time of the appointment and in the next annual report.
Table 32: Percentage of companies with joint chairman / chief executive
Company type
Largest 100 companies (FTSE 100)
Largest 101 - 350 companies listed on
the stock exchange (FTSE 250)
Other companies listed on the stock
exchange
Average
128
Percentage
5
8
11
10
Annita Florou in her research (2005) 129 confirmed that most UK companies
separate the roles of CEO and chairman. Using data on 2,180 separate
chairmanships of the top 460 UK firms over the 1990-1998 period, she found that
the chairman is more likely to be replaced when the CEO is dismissed. Detailed
data on the dismissal events suggested that chairman replacement is associated
with board restructuring. This may be necessary to bring in different skills and
experience which, in turn, might facilitate changes in future corporate decisions.
Moreover, she found that the chairman's previous position does not affect the
association between chairman removal and CEO dismissal. But, the increase in
the dismissal likelihood of the chairman at the time of forced CEO departure is
higher when the chairman is involved in the appointment of the failing CEO.
Dulewicz et al in their research (2007) 130 found that outstanding chairmen have a
high level of integrity, showing high ethical standards in their own behaviour, as
well as providing a lead on corporate governance matters. They promote
investors' confidence and ensure high returns to investors. They spend
significant time mentoring, developing and advising their colleagues, are team
builders, are empathetic and very effective. They encourage contributions from
fellow directors and achieve consensus yet they challenge and probe colleagues,
especially the executive directors. They have an acute critical faculty and a
critical thinking ability.
Dulewicz and Herbert (2004) 131 in their research on the boards of UK listed
companies found no evidence to support the separation of the chairman and CEO
128
Higgs, D. (2003) A review of the role and effectiveness of non executive directors. London: FRC.
Available at: www.ecgi.org
129
Florou, A. (2005) Top Director Shake-up: The Link between Chairman and CEO Dismissal in the UK.
Journal of Business Finance & Accounting, Vol. 32, No. 1-2, pp 97-128. Available at:
http://ssrn.com/abstract=661985
130
Dulewicz, V., K. Gay and B. Taylor (2007) What Makes an Outstanding Chairman? Findings from the
UK Non-Executive Director of the Year Awards, 2006. Corporate Governance: An International Review,
Vol. 15, Issue 6, pp 1056-1069. Available at: http://ssrn.com/abstract=1072198
131
Dulewicz, V. and P. Herbert (2004) Does board composition and practice of boards of directors bear
any relationship to the performance of their companies? Corporate Governance: an international
review, Vol 12, No. 3, pp 263-280
©2009 CfA
Page 76
roles upon the performance of a company in terms of cash flow return on total
assets.
Weir and Laing in their research (2001) 132 found that companies with the same
person acting as CEO and chair were more likely to be taken over.
7.3.6 Average Board Tenure133
The UK Board Index (2009) 134 has identified that the average tenure for a
chairman is 4.2 years. The average tenure for non executive directors is 4.2
years and the average length of tenure for CEOs is 5.2 years.
Table 33 shows the results of a 2008 survey by Boardex and Manchester Square
Partners on average tenure. These results indicate that many of the largest
companies are being led by people who have no experience of directing through a
recession.
Table 33: Average tenure of FTSE board members (2008)
All FTSE 350 board members
All FTSE 350 chief executives
All FTSE 350 independent directors
FTSE 100 chief executives
FTSE 100 independent directors
FTSE 250 chief executives
FTSE independent directors
135
Average tenure
(years)
4.0
4.6
3.6
4.7
3.5
4.6
3.8
7.3.7 Board Diversity136
While there is little support in the UK for notions of diversity for its own sake,
there is strong recognition that traditional methods of recruitment of directors
through personal contacts have tended to act as a barrier to expanding the
diversity of boards.
Weir, C. and D. Laing, (2001) Ownership Structure, Board Composition and the Market for
Corporate Control in the UK: An Empirical Analysis. Applied Economics. Available at:
http://ssrn.com/abstract=463062
132
133
Pierce C. (2009) World Guide to Corporate Governance: Volume 1 Corporate Governance in the EU
(2009), GMB Publishing Ltd, London.
134
Spencer Stuart (2009) UK Board Index 2008. London: Spencer Stuart. Available at:
www.spencerstuart.com
135
Masters, B. (2008) Absence of old hands prompts boardroom concern. Financial Times, 26
September 2008, p 25. Available at: www.manchestersquarepartners.net
136
Pierce C. (2009) World Guide to Corporate Governance: Volume 1 Corporate Governance in the EU
(2009), GMB Publishing Ltd, London.
©2009 CfA
Page 77
7.3.8 Age137
The UK Board Index (2009)
•
•
138
has identified that:
the average age of executive directors is 50; and
the average age of non executive directors is 59.
Identical results were obtained in research by Deloitte in 2008
age of FTSE 350 directors where:
•
•
139
concerning the
the average age of an executive director is 50, down from 53 in 2003; and
the average age of a non executive director is 58, down from 59 in 2003.
Research by Marx (2009) 140 identified the average age of women directors in
FTSE 100 companies to be 54.
Research undertaken for the Higgs Report in 2003 indicated that:
•
•
•
the average age of non-executive directors in the UK is 59 years;
the average age of chairmen is 62 years; and
less than 20 per cent of directors on companies listed on the London Stock
exchange are under the age of 45.
According to a 2007 survey 141 the average age of directors on UK boards is
slightly below the European average at 58.8 years (the European average is 59.1
years). The research also indicated that the average age of CEOs of the top 100
UK companies is 52. This compares with a US figure of 58.
7.3.9 Gender142
The UK Board Index (2009) 143 has identified that women represent 10 per cent of
the total number of directors. They form 16 per cent of non executives but only 4
per cent of executive directors. The percentage of companies with at least one
female director is 67 per cent.
137
Pierce C. (2009) World Guide to Corporate Governance: Volume 1 Corporate Governance in the EU
(2009), GMB Publishing Ltd, London.
138
Spencer Stuart (2009) UK Board Index 2008. London: Spencer Stuart. Available at:
www.spencerstuart.com
139
Masters, B. (2008) Absence of old hands prompts boardroom concern. Financial Times, 26
September 2008, p 25
140
Marx, E. (2009) Route to the top: what does it take for women to get onto FTSE 100 boards?
London: Heidrick and Struggles
141
Heidrick and Struggles (2007) Raising the bar: Corporate Governance in Europe. Paris: Heidrick
and Struggles
142
Pierce C. (2009) World Guide to Corporate Governance: Volume 1 Corporate Governance in the EU
(2009), GMB Publishing Ltd, London.
143
Spencer Stuart (2009) UK Board Index 2008. London: Spencer Stuart. Available at:
www.spencerstuart.com
©2009 CfA
Page 78
Research in 2008 144 indicates that 3 CEOs from the top 100 UK companies are
women. This compares with a US figure of 2 and with public sector boards where
38 per cent of directors were female and women chaired 34 per cent of public
sector boards. 145 Table 34 shows how the proportions of female directors in the
FTSE 100 have changed over the last decade.
Table 34: Female directors in the FTSE 100 (2008)
Female held directorships (number)
Female held directorships (percentage)
Female executive directorships (number)
Female executive directorships
(percentage)
Women non executives (number)
Women non executives (percentage)
Companies with at least one female
director
Companies with multiple female directors
Companies with no female directors
1999
79
6.9%
13
2.0%
2008
131
11.7%
17
4.8%
66
10.8%
64
114
14.9%
78
13
36
39
22
Research undertaken for the Higgs Report in 2003
•
•
146
147
indicated that:
4 per cent of all UK listed company directorships are held by women; and
women comprise only 1 per cent of listed company chairmanships.
The research indicated that the percentage of women directors tends to increase
with the size of company.
Research by Peter Hahn (2007) 148 has identified that the presence of women on
the 150 largest listed firms in the UK is positively correlated with board meeting
frequency. He suggests that this may be attributed to women being more likely
to be selected as board members on domestic and regulated companies.
7.3.10 Non National and Ethical Origins149
The UK Board Index (2009) 150 identified that the proportion of non British
directors on boards is 30 per cent. The percentage of companies with at least
Marx, E. (2008) Route to the top: a transatlantic comparison of top business leaders. London:
144
Heidrick and Struggles
145
RSA (2002) Report on Public Sector Boards. London: RSA
146
Get Women on the board, Financial Times, Thursday 20 November 2008, p 3
147
Higgs, D. (2003) A review of the role and effectiveness of non executive directors. London: FRC.
Available at: www.ecgi.org
148
Hahn, P. (2007) Vanishing Board Meetings: has governance doomed the board meeting? London:
Cass Business School Research Paper
149
Pierce C. (2009) World Guide to Corporate Governance: Volume 1 Corporate Governance in the EU
(2009), GMB Publishing Ltd, London.
©2009 CfA
Page 79
one foreign executive director is 52 per cent, and the percentage of companies
with at least one foreign non executive director is 74 per cent.
Research by Marx (2009) 151 identified that 44 per cent of the FTSE 100 female
board directors are foreign born. This reflects the trend towards more
international boardrooms. More than two-thirds of the women had an advanced
degree with almost half of the directors earning their degree from a prestigious
university.
Research by Peter Hahn (2007) 152 identified that amongst the 150 largest listed
firms in the UK non British nationality directors held a mean of 1.82 board seats
in 1998 and 2.51 board seats in 2004. Companies with non British non executive
directors increased from 50 per cent in 1998 to 67.3 per cent in 2004.
Research undertaken for the Higgs Report in 2002
•
•
153
indicated that:
7 per cent of directors of UK listed companies are not British; and
1 per cent of directors of UK listed companies are from ethnic minority
groups.
According to a 2007 survey, the average proportion of non national directors on
UK boards is well above average at 31 per cent (the European average is 18 per
cent). The distribution of national origins is shown in table 35.
Table 35: The distribution of national origins of directors
Country of origin
America
German
French
Dutch
Belgian
Other European countries
Other parts of the World
154
Percentage
37
8
4
10
3
14
24
A survey in 2008 155 indicates that 32 CEOs from the top 100 UK companies are
foreign nationals. This compares with a US figure of 10 per cent. Public sector
boards have 9 per cent of their directors being from ethnic minorities. 156
150
Spencer Stuart (2009) UK Board Index 2008. London: Spencer Stuart. Available at:
www.spencerstuart.com
151
Marx, E. (2009) Route to the top: what does it take for women to get onto FTSE 100 boards?
London: Heidrick and Struggles
152
Hahn, P. (2007) Vanishing Board Meetings: has governance doomed the board meeting? London:
Cass Business School Research Paper
153
Higgs, D. (2003) A review of the role and effectiveness of non executive directors. London: FRC.
Available at: www.ecgi.org
154
Heidrick and Struggles (2007) Raising the bar: Corporate Governance in Europe. Paris: Heidrick
and Struggles
©2009 CfA
Page 80
7.3.11 Board Meeting Frequency, Duration and Content157
The Combined Code (2008 p 6) recommends that boards should meet sufficiently
regularly to discharge their duties effectively. The Combined Code (2008 p 6)
recommends that the board should have a formal schedule of matters specifically
reserved for its decision.
The UK Board Index (2009) 158 identifies that the average board meets 8 times
per year. According to a 2007 survey 159, UK boards meet 8.7 times per year and
this is the same as the European average. A separate study of companies in the
UK identified the frequency of board meetings in the UK (table 36).
Table 36: The frequency of board meetings in the UK
Number of meetings per year
0-4
5-8
9-12
More than 12
160
Percentage of
boards
6
22
66
6
Research by Peter Hahn (2007) 161 identified that amongst the 150 largest listed
firms in the UK meeting frequency has been declining. In 1998 there was a mean
of 9.4 meetings and in 2004 the mean was 8.6. He noted that utilities and
financial institutions had the highest board meeting frequencies.
A study of 1400 companies by 3i, a large venture capital company in the UK,
identified the distribution of board agenda items (table 37).
155
Marx, E. (2008) Route to the top: a transatlantic comparison of top business leaders. London:
Heidrick and Struggles
156
RSA (2002) Report on Public Sector Boards. London: RSA.
157
Pierce C. (2009) World Guide to Corporate Governance: Volume 1 Corporate Governance in the EU
(2009), GMB Publishing Ltd, London.
158
Spencer Stuart (2009) UK Board Index 2008. London: Spencer Stuart. Available at:
www.spencerstuart.com
159
Heidrick and Struggles (2007) Raising the bar: Corporate Governance in Europe. Paris: Heidrick
and Struggles
160
Dunne, P. (2005) Running Board meetings: How to get the most from them. London: Kogan Page, p
20
161
Hahn, P. (2007) Vanishing Board Meetings: has governance doomed the board meeting? London:
Cass Business School Research Paper
©2009 CfA
Page 81
Table 37: The distribution of board agenda items
Average number of items on board
agendas
4-5
6-7
8-10
11-12
More than 13
A survey by First Flight in 2008
•
•
•
•
•
35
22
17
13
13
per
per
per
per
per
cent
cent
cent
cent
cent
163
162
Percentage of
boards
6
18
59
14
1
identified that non executive directors spend:
of their time at board meetings;
on the telephone and informal contact;
on external contacts;
on strategy, budgeting and planning; and
on committees.
The survey also identified that non executive directors in companies with a
turnover in excess of £100 million spent 35.8 days per year on their non
executive duties.
Dunne, P. (2005) Running Board meetings: How to get the most from them. London: Kogan Page,
p 38
162
163
©2009 CfA
Survey of Independent Directors (2008) Available at www.NonExecutiveDirector.co.uk
Page 82
7.3.12 Board Evaluation164
The Combined Code (2008, p 12) recommends that the board should undertake a
formal and rigorous annual evaluation of its own performance and that of its
committees and individual directors. Individual evaluation should aim to show
whether each director continues to contribute effectively and to demonstrate
commitment to the role (including commitment of time for board and committee
meetings and any other duties). The chairman should act on the results of the
performance evaluation by recognizing the strengths and addressing the
weaknesses of the board and, where appropriate, proposing new members be
appointed to the board or seeking the resignation of directors. The board should
state in the annual report how performance evaluation of the board, its
committees and its individual directors has been conducted. The non-executive
directors, led by the senior independent director, should be responsible for
performance evaluation of the chairman, taking into account the views of
executive directors.
The UK Board Index (2009) 165 identified that 58 per cent of companies used
only internal resources for their board evaluation, 10 per cent used only external
resources and 27 per cent used a combination of the two.
An Institute of Chartered Secretaries and Administrators’ study (2009) 166
identified that only 42 out of 200 companies elected to undertake an external
evaluation process.
A survey by First Flight in 2008
•
•
•
167
identified that:
62 per cent of respondents thought that their boards were working well;
35 per cent of respondents thought that their boards were partially
effective; and
3 per cent of respondents thought that their boards were not effective.
According to a Heidrick and Struggles survey in 2007 the average number of UK
companies that disclose that a board evaluation took place in the previous
financial year is 88 per cent compared to a European average of 44 per cent. 168
164
Pierce C. (2009) World Guide to Corporate Governance: Volume 1 Corporate Governance in the EU
(2009), GMB Publishing Ltd, London.
165
Spencer Stuart (2009) UK Board Index 2008. London: Spencer Stuart. Available at:
www.spencerstuart.com
166
Osborne, S. and G. Shepheard (2009) Work in progress. Chartered Secretary. March 2009
167
Survey of Independent Directors (2008) Available at www.NonExecutiveDirector.co.uk
168
Heidrick and Struggles (2007) Raising the bar: Corporate Governance in Europe. Paris: Heidrick
and Struggles
©2009 CfA
Page 83
7.4 Director Remuneration
7.4.1 Executive directors169
A survey of FTSE 350 companies in 2008 by Deloitte
•
•
•
•
•
•
•
170
identified that:
97 per cent of FTSE 100 companies gave performance bonuses to their
executive directors;
96 per cent of FTSE 250 companies gave performance bonuses to their
executive directors;
the average full time executive director’s bonus was 147 per cent of their
salary.
Over 60 per cent of FTSE 100 executive directors’ bonuses were tied at
least in part to annual profit goals with earnings per share listed as the
next most common target;
62 per cent of FTSE 100 executive directors received long term incentives
in shares;
21 per cent of FTSE 100 executive directors received long term incentives
in shares and options; and
1 per cent of FTSE 100 executive directors received long term incentives in
options only.
A survey of CEO remuneration in 2007 171 revealed the average remuneration in
UK to be €92,701 and the European average to be €72,195.
Gao and Sudarsanam’s research results (2005) 172 demonstrated that almost none
of the compensation contracts for UK executives set by the remuneration
committee had an impact on managerial risk preferences in acquisitions.
Girma et al in their research (2007) 173 found the relationship between executive
pay and performance in the UK remains weak and the link to company size has, if
anything, been strengthened.
Research by Peter Hahn (2007) 174 has identified that executive directors and the
chairman’s remuneration on the 150 largest listed firms in the UK is negatively
correlated with board meeting frequency. He suggests that this may be
attributed to positive performance requiring less monitoring.
169
Pierce C. (2009) World Guide to Corporate Governance: Volume 1 Corporate Governance in the EU
(2009), GMB Publishing Ltd, London.
170
Masters, B. and K. Burgess (2008) Shareholders and boards in bonus face off. Financial Times, 16
October 2008, p 21
171
Heidrick and Struggles (2007) Raising the bar: Corporate Governance in Europe. Paris: Heidrick
and Struggles
172
Gao, L. and P. Sudarsanam (2005) Executive Compensation, Hubris, Corporate Governance: Impact
on Managerial Risk Taking and Value Creation in UK High-tech and Low-tech Acquisitions. Available
at: http://ssrn.com/abstract=676821
173
Girma, S., S. Thompson and P. Wright (2007) Corporate Governance Reforms and Executive
Compensation Determination: Evidence from the UK. Manchester School, Vol. 75, No. 1, pp 65-81,
Available at: http://ssrn.com/abstract=954826
174
Hahn, P. (2007) Vanishing Board Meetings: has governance doomed the board meeting? London:
Cass Business School Research Paper
©2009 CfA
Page 84
7.4.2 Non Executive Directors175
The Combined Code (2008, p 13) recommends that levels of remuneration for
non-executive directors should reflect the time commitment and responsibilities
of the role. Remuneration for non executive directors should not include share
options. If, exceptionally, options are granted, shareholder approval should be
sought in advance and any shares acquired by exercise of the options should be
held until at least one year after the non-executive director leaves the board.
Holding of share options could be relevant to the determination of a nonexecutive director’s independence.
In February 2008, the Association of British Insurers (ABI) and the National
Association of Pension Funds (NAPF) updated their joint best practice guidelines
on executive contracts and severance pay. Among other things, this requires
companies to disclose fully in the remuneration report the constituent parts of
any severance payment with a justification of the total value and the elements
paid and encourages boards to consider making directors’ contracts with a shorter
notice period than 12 months.
A survey of UK listed companies in 2006
•
•
•
•
175
identified that:
100 per cent of companies disclosed their remuneration policy statement
(however only 22 per cent disclosed it on their website);
99.2 per cent disclosed a policy implementation overview;
100 per cent disclosed a linkage between remuneration and
performance; and
100 per cent disclosed the total amount of salary for each individual
director.
The UK Board Index (2009)
•
•
176
177
identified that:
the average remuneration of a chairman is £380,000; and
the average remuneration of a senior independent director is £79,000.
Pierce C. (2009) World Guide to Corporate Governance: Volume 1 Corporate Governance in the EU
(2009), GMB Publishing Ltd, London.
176
Manifest (2006) Directors remuneration: A pan European perspective. London: Manifest.
177
Spencer Stuart (2009) UK Board Index 2008. London: Spencer Stuart. Available at:
www.spencerstuart.com
©2009 CfA
Page 85
Table 38 shows the director remuneration levels based upon a 2007 survey.
Table 38: Director Remuneration Levels
The average
remuneration of directors
The average
remuneration per board
and committee meeting
The average
remuneration for the
audit committee chairman
The average
remuneration for the
audit committee
members
The average
remuneration for the
remuneration committee
chairman
The average
remuneration for the
remuneration committee
members
Average on UK Boards
(Euros)
92,701
The European average
(Euros)
72,195
3,650
3,267
47,570
29,256
18,572
17,390
38,665
23,604
17,634
13,732
Professor Guido Ferrarini (2008)
•
•
•
•
•
178
179
has identified that:
UK companies provide more detailed explanations on principles and the
remuneration strategy than other member states.
UK companies provide more information on performance measures and
the detailed structure of pay (percentage fixed and variable) than other
member states.
UK companies provide more peer companies in the comparator group than
other member states.
UK companies are the only ones in Europe that provide the rationale for
performance measures.
UK companies are the only ones in Europe that provide information on the
use of external remuneration consultants.
The size of non executive remuneration in the UK is €92,701. (The European
average remuneration is €72,195.) The average remuneration of UK directors is
higher than the European average in all of the examined categories. 180
178
Heidrick and Struggles (2007) Raising the bar: Corporate Governance in Europe. Paris: Heidrick
and Struggles
179
Ferrarini, G. (2008) A European perspective on executive remuneration. Executive Summit on
Executive Compensation and Benefits, Brussels. 16-18 September 2008
180
Heidrick and Struggles (2007) Raising the bar: Corporate Governance in Europe. Paris: Heidrick
and Struggles
©2009 CfA
Page 86
Table 39 shows the non director remuneration levels based upon a 2006 survey.
Table 39: Director Remuneration Levels
Market
capitalisation
(£ millions)
300- 600
601 – 1,000
1,001 – 2,500
2,501 – 5,000
5,001 –
10,000
10,00125,000
Over 25,000
Non executive
chairman
181
Senior
Independent
Non executive
director
106,500
122,400
167,400
240,600
261,300
37,700
41,400
47,700
57,100
66,700
34,400
38,100
43,000
53,500
55,600
384,300
77,500
66,500
537,400
95,400
74,500
7.5 Boardroom Behaviours182
Best practice boardroom behaviours may be characterised by:
•
•
•
•
•
•
•
•
•
A clear understanding of the role of the board
The appropriate deployment of knowledge, skills, experience and
judgement
Independent thinking
The questioning of assumptions and established orthodoxy
Challenge which is constructive, confident, principled and proportionate
Rigorous debate
A supportive decision-making environment
A common vision; and
The achievement of closure on individual items of board business.
The degree to which these behaviours can be delivered is shaped by a number of
key factors:
•
•
•
•
The character and personality of the directors and the dynamics of their
interactions
The balance in the relationship between the key players, especially the
chair and the CEO, the CEO and the board as a whole, and between
executive and non-executive directors
The environment within which board meetings take place; and
The culture of the boardroom and, more widely, of the company.
To improve behaviour in the boardroom, directors need to develop greater
awareness of ‘fit for purpose’ governance as the means by which the board can
collectively agree the business objectives of the company and an implementation
strategy for executive management.
181
Burgess, K. and E Callan (2006) Non execs in shadow of controlling family. Financial Times, 24
October 2006, p 23.
182
©2009 CfA
ICSA Boardroom Behaviours, June 2009
Page 87
Greater diversity of board members is useful to provide independent challenge.
This may have been useful in the current financial crisis. Boards of some
companies do not have a sufficiently wide range of skill sets, experience and
background – including those recruited from the academia, the public and notfor-profit sectors.
Boards should exercise leadership and lead by example, which can be evidenced
by high levels of visibility and integrity, strong communications and demanding
expectations. This leadership should be clear to all within the organisation and
include shareholders and external stakeholders.
The company secretary has a key role in helping boards improve performance.
The company secretary role should become that of the chair’s chief of staff and
should help deliver a well functioning board.
©2009 CfA
Page 88
7.6 Governance Primary Research Summary
The table below shows a summary of the expected level of skills employers
expect people to have working in Governance, Regulated Administration and
Senior Administration Management roles.
Table 40: Summary of expected level of skills by function (%)
Function
Ensuring the organisation’s
functioning and performance
Determining the
organisation’s purpose,
vision, values and ethical
behaviour
Evaluating effective
compliance and control
systems
Decision making and
delegating tasks
Exercising accountability and
engaging with stakeholders
Defining the organisation’s
strategy and structure
Defining the responsibilities,
powers and tasks
Skills Level
3
4
‘Inter‘Skilled’
Mediate’
1
‘Not at
all
skilled’
2
‘Low
skilled’
5
‘Very
skilled’
0%
1%
5%
20%
74%
0%
2%
5%
21%
73%
0%
1%
7%
23%
70%
0%
3%
4%
25%
68%
0%
3%
4%
25%
68%
1%
1%
7%
25%
67%
0%
1%
4%
32%
63%
Table 40 above shows the level of skill required for each Governance, Regulated
Administration and Senior Administration Management function.
The function that most employers expect ‘very skilled’ senior management and
board members for was to ‘ensuring the organisation’s functioning and
performance’ (74%), closely followed by ‘Determining the organisation’s purpose,
vision, values and ethical behaviour’ (73%) and ‘Evaluating effective compliance
and control systems’ (70%).
©2009 CfA
Page 89
Figure 39: Expected skill levels by mean values
define responsibilities, powers and
tasks
4.56
Functions
define the organisation's strategy
and structure
4.57
determine the organisation's
purpose, vision, values and ethical
4.64
ensure organisational functioning and
performance
4.67
make decisions and delegate tasks
4.61
evaluate effective compliance and
control systems
4.62
exercise accountability and engage
with stakeholders
4.57
4.5
4.55
4.6
4.65
4.7
Mean values
Figure 39 shows the mean values for the level of skill expected for the seven
functions. The three top functions which seem to be central to employers who
participated in this survey are ‘Ensuring organisational functioning and
performance’ which carries a mean value of 4.67 followed by ‘Determining the
organisation’s purpose, vision, values and ethical behaviour’ with 4.64 and
‘Evaluating effective compliance and control systems’ with a mean value of 4.62.
This is in line with the top three functions that most employers expect senior
management and board members to be ‘very skilled’ at (as detailed in table 40).
©2009 CfA
Page 90
7.7 Actual Skills
The table below shows a summary of the actual level of skills people currently
have working in Governance, Regulated Administration and Senior Administration
Management roles.
Table 41: Summary of actual level of skills by function (%)
Function
Skills Level
2
3
4
‘Low
‘Inter‘Skilled’
skilled’ Mediate’
5
‘Very
skilled’
1%
2%
11%
33%
53%
1%
1%
6%
36%
55%
1%
1%
11%
35%
52%
1%
1%
11%
33%
53%
1%
1%
9%
37%
51%
1%
2%
11%
37%
50%
1%
2%
11%
35%
51%
1
‘Not at
all
skilled’
Ensuring the organisation’s
functioning and performance
Determining the
organisation’s purpose,
vision, values and ethical
behaviour
Evaluating effective
compliance and control
systems
Decision making and
delegating tasks
Exercising accountability and
engage with stakeholders
Defining the organisation’s
strategy and structure
Defining responsibilities,
powers and tasks
Table 41 above shows the actual level of skill of current board members and
senior administration management teams for the seven Governance, Regulated
Administration and Senior Administration Management functions.
The function that most employers rate their actual current staff to have ‘very
high’ levels of skill in was to ‘determine the organisations purpose, vision, values
and ethical behaviour’ (55%) closely followed by ‘decision making and delegating
tasks and ‘ensuring the organisations functioning and performance’ (both at
53%).
©2009 CfA
Page 91
Figure 40: Mean values of Actual skills
Define responsibilities, powers and tasks
Define the organisation's strategy and structure
4.32
4.33
Functions
Determine the organisation's purpose, vision, values
and ethical behaviour
4.43
Ensure the organisation's functioning and
performance
4.37
Make decisions and delegate tasks
4.35
Evaluate effective compliance and control systems
4.35
Exercise accountability and engage with
stakeholders
4.35
4.26 4.28 4.3 4.32 4.34 4.36 4.38 4.4 4.42 4.44
Mean values
Figure 40 above shows the mean values for the actual level of skill of existing
board members, chartered and company secretaries and senior administrative
managers.
The two top functions, where the actual levels of skills are deemed as high are:
•
•
Determine the organisation’s purpose, vision, values and ethical behaviour
Ensure organisational functioning and performance
This is in line with the top two mean values, in relation to functions for the
expected level of skill.
©2009 CfA
Page 92
7.8 Expected and Actual Skills Levels
The table below shows a comparison of the expected skill employers require verse
actual level of skills people currently have working in Governance, Regulated
Administration and Senior Administration Management roles.
Table 42: Comparison between expected and actual level of ‘very highly skilled’
board members, and senior managers
Functions
Ensure organisational functioning and
performance
Determine the organisation's purpose,
vision, values and ethical behaviour
Define the organisation's strategy and
structure
Exercise accountability and engage with
stakeholders
Make decisions and delegate tasks
Define responsibilities, powers and
tasks
Evaluate effective compliance and
control systems
Average
Expected %
74%
Actual %
53%
Difference %
-21%
73%
55%
-18%
67%
50%
-17%
68%
51%
-17%
68%
63%
53%
51%
-15%
-12%
70%
52%
-12%
69%
52%
-17%
Table 42 above illustrates the associated skills gaps for senior management and
people working at boardroom level. 69% of employers on average expect ‘very
skilled' people to carry out the above functions. However in reality on average,
only 52% of employers rated the actual level of skill of their current employees as
being ‘very skilled’.
This demonstrates that for some functions on average two in five current board
members and senior administration managers don’t have the require level of skill
to carry out these functions to the required standard. These functions include:
•
•
•
•
Ensuring organisational functioning and performance
Determining the organisation's purpose, vision, values and ethical
behaviour
Defining the organisation's strategy and structure
Exercising accountability and engage with stakeholders.
For the remaining functions of:
•
•
•
Making decisions and delegate tasks
Defining responsibilities, powers and tasks
Evaluating effective compliance and control systems
The average is one in five board members and senior administration managers
who do not have the right level of skills to carry out their roles effectively.
This demonstrates that here is a significant skills gap for the functions that board
members and senior administration managers are expected to perform (a
significant difference of, on average, 17% across functions).
©2009 CfA
Page 93
4.37
4.35
4.35
4.57
4.6
4.35
4.35
Average
determine the orga
4.33
4.62
exercise accounta
4.43
4.32
4.61
evaluate effective c
4.67
4.64
make decisions and
4.57
Ensure organisa tion
4.56
define the organis
4.7
4.6
4.5
4.4
4.3
4.2
4.1
Define responsibilit
Mean Values
Figure 41: Difference between Expected and Actual skills by mean values
Functions
Expected mean
Actual mean
Figure 41 above shows the same data for expected verses actual level of skills as
in table 42 but has been provided as overall mean values.
This shows a clear and significant under performance of actual skills levels of
board members and senior administration managers against employer
expectations.
©2009 CfA
Page 94
7.9 Difficulty in Recruiting
Section 7.9 provides an evaluation of the recruitment difficulties that employers
experience when they are recruiting for Governance, Regulated Administration
and Senior Administration Management roles to carry out specific functions.
Percentage
Figure 42 Difficulties in recruiting Summary
80%
60%
40%
20%
0%
64%
36%
Defining
responsibilities,
pow ers and
tasks
66%
34%
Defining an
organisation's
strategy and
structure
69%
31%
69%
31%
63%
37%
determining the
Exercising
Decision making
organisation's
accountability
and delegating
purpose, vision, and engage w ith
tasks
values and
stakeholders
ethical behaviour
61%
39%
60%
40%
Ensusring
organisational
functioning and
performance
Evaluating
effective
compliance and
control systems
Functions
Yes
No
Figure 42 above compares the percentage of organisations who find it difficult to
recruit (light blue) and the percentage who don’t experience any problems in
recruiting for these functions (green). It appears that the function ‘evaluating
effective compliance and control systems’ is the function that employers find the
most difficult to recruit for. This is closely followed by ‘ensuring organisational
functioning and performance’ with 39% of employers finding it difficult to recruit
for this function.
However, as the chart above shows on average 35% of organisations experience
difficulties in recruiting board members and senior administration managers to
carry out various high level functions, which demonstrates that there is a skills
shortage (not enough people with the relevant skills to carry out the strategic
functions above).
©2009 CfA
Page 95
7.10 Conclusions
The primary research identifies that there are significant skills gaps associated
with the functions carried out by board members, company and chartered
secretaries and senior administration managers.
On average, two in five current board members and senior administration
managers do not have the required level of skill to carry out the strategic
functions of:
•
•
•
•
•
•
•
Defining responsibilities, powers and tasks
Defining the organisation’s strategy and structure
Determining the organisation’s purpose, vision, values and ethical
behaviour
Ensuring organisational functioning and performance
Making decisions and delegating tasks
Evaluating effective compliance and control systems
Exercising accountability and engaging with stakeholders.
This demonstrates that significant training and development is needed for both
current and future board members and senior administration managers to ensure
that they have the right level of skills and are competent to carry out and oversee
the strategic functions above.
If this important training and development is not implemented in the immediate
future the situation will continue to deteriorate as employers have also
commented on recruitment difficulties. On average more than a third of
employers find it difficult to recruit board members and senior administration
managers with the right level of skill.
This represents a skills shortage, which means there is a lack of specific strategic
administration skills in the marketplace. This combined with the current skills
gaps in the existing workforce, demonstrates that there is a significant problem
that needs to be addressed.
The implementation of a competency framework using existing Governance
standards can provide a solution to the problem. Ongoing training and
development and Continuous Professional Development (through the design,
development and implementation of small bite sized awards in Governance and
Strategic Administration) also offer alternatives ways of up skilling the
Governance and Senior Administration workforce.
©2009 CfA
Page 96
8. Supply Info
8.1 NVQ/SVQ/VRQ
Vocational qualifications have remained a popular choice of learning. The lower
levels, Level 1 and Level 2 for Registrations and Certifications follow the
traditional pattern of the academic year calendar in terms that candidates
registering during October and completing their studies in July. The reason for
this may be that Level 1 and 2 are part of the Young Apprenticeship and therefore
part of the secondary school calendar.
Figures 39-46 are certifications and registrations for all S/NVQs. The data is
supplied on a quarterly basis by the following seven major Awarding Bodies:
•
•
•
•
•
•
•
•
City & Guilds/ Pitman
EAL
Edexcel
EDI
IMI
OCR
OU
SQA
There has been an overall decline in Level 1 Certifications and Registrations. For
Certifications the decline measures an average of 18.5%. However, the 2nd
quarter for Registrations, April 08 registered 113 more applications than the
previous year.
Figure 43: Admin Level 1 Certifications183
900
800
Certifications
700
600
500
400
300
200
100
0
Jan-07 Apr-07
Jul-07
Oct-07 Jan-08 Apr-08
Jul-08
Oct-08
Month
183
©2009 CfA
Data
supplied by awarding bodies
Page 97
Figure 44: Admin Level 1 Registrations184
1200
Registrations
1000
800
600
400
200
0
Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08
Month
Business & Administration Level 2 Certifications and Registrations have remained
the most popular level learners choose to gain an initial understanding of
Business & Administration.
2008 started with a slowdown of 13% in Certifications compared to the previous
year. However, the following three quarters showed an average increase of 13%.
There has been a steady increase in Registrations averaging 57% over the whole
year.
Figure 45: Admin Level 2 Certifications185
8000
7000
Certifications
6000
5000
4000
3000
2000
1000
0
Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08
Month
184
185
©2009 CfA
Data supplied by awarding bodies
Data supplied by awarding bodies
Page 98
Figure 46: Admin Level 2 Registrations186
12000
Registrations
10000
8000
6000
4000
2000
0
Jan-07 Apr-07
Jul-07
Oct-07 Jan-08 Apr-08
Jul-08
Oct-08
Month
The content of the Level 3 framework is a lot more demanding and requires a
high degree of autonomy and competences. Although learners who are
functioning at this level don’t usually take the opportunity in building on the Level
2 and progressing to a Level 3 qualification. This is down to the additional
demands of their workload and employers not supporting progression for this
reason. Therefore, Certifications and Registrations have always been lower than
at Level 2.
However, there has been a steady increase in certifications being awarded during
2008. In January 2008, certifications were up by 10%, climbing to 37% in the
last quarter.
2008 also witnessed a dramatic increase in registrations. Starting with a decline
of 7% in January 2008, by the latter part of 2008 registrations had increased by
74%
Figure 47: Admin Level 3 Certifications187
3500
3000
Certifications
2500
2000
1500
1000
500
0
Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08
Month
186
187
©2009 CfA
Data supplied by awarding bodies
Data supplied by awarding bodies
Page 99
Figure 48: Admin Level 3 Registrations188
6000
Registrations
5000
4000
3000
2000
1000
0
Jan-07 Apr-07
Jul-07 Oct-07 Jan-08 Apr-08
Jul-08 Oct-08
Month
People who are working at Level 4 require a high level of competences that
involves the application of knowledge in a broad range of complex, technical or
professional work activities performed in a variety of contexts and with a
substantial degree of personal responsibility and autonomy. Responsibility for the
work of others and the allocation of resources is often present.
There has been a 40% average increase in candidates achieving a Level 4
qualification compared to the previous year and an average increase in
registrations of around 30%. This increase indicates that more employees are
specialising in their job role and working towards more strategic functions.
Figure 49: Admin Level 4 Certifications189
300
Certifications
250
200
150
100
50
0
Jan-07 Apr-07
Jul-07
Oct-07 Jan-08 Apr-08
Jul-08
Oct-08
Month
188
189
©2009 CfA
Data supplied by awarding bodies
Data supplied by awarding bodies
Page 100
Figure 50: Admin Level 4 Registrations190
350
300
Registrations
250
200
150
100
50
0
Jan-07 Apr-07
Jul-07
Oct-07 Jan-08 Apr-08
Jul-08
Oct-08
Month
Table 43 gives a breakdown of National and Scottish Vocational Qualifications for
Administrative and Secretarial qualifications awarded in the UK during 2007 and
2008. The highest qualification awarded was at Level 2 with 51.1%, followed by
Level 3 with 26.7% and 11.3% for Level 4. Level 1 had the lowest achievement rate
with 7.6%
For Business Administration, Level 2 also rated as the highest with 78%, followed by
Level 3 with 34.4%, Level 4 and with 12.8%. Level 1 only reached 4.3%
The gender uptake was 89.3% for women and 39.2% for men.
190
©2009 CfA
Data supplied by awarding bodies
Page 101
Table 43: NVQ/SVQ Awards in the UK 2007/2008 in thousands191
NVQ/SVQ
Administrative
& Secretarial
Level 1
4.3
7.6%
Level 2
52.2
10.4%
Level 3
26.7
14.0%
Level 4
11.3
34.0%
Total
93.4
12.1%
Business,
Admin and Law
3.3
5.8%
78
15.8%
34.4
18.0%
12.8
38.6%
128.5
16.6%
Male
39.2
10.7%
Female
89.3
21.9%
Total
128.5
16.6%
Business
Admin & Law
by Gender
The total of all VRQ’s in Administration and Secretarial achieved in 2007/08 was
147,200. Level 1 was the highest uptake with 72,700 followed by Level 2 with 59,600
and Level 3 with only 15,000. The achievements for the full VRQs were 2,700 for
Level 1, 21,300 for Level 2 and 4,100 for Level 3.
For Business Administration, the total of all VRQs were 28,400 for Level 1, 80,300 for
Level 2 and 39,100 for Level 3. Compared to the full VRQs where 2,300 of learners
achieved a Level 1, 15,200 a Level 2 and 7,600 a Level 3. The total of all full VRQs
was 25,500.
The gender ratio for all VRQs was 6.1% male and 11.8% female. For the full VRQs
the ration was 5.5% male and 7.9% female (see Table 19 below).
191
©2009 CfA
http://www.thedataservice.org.uk
Page 102
Table 44: VRQ Awards in the UK 2007/2008 in thousands192
All VRQ
Level 1
Administrative
& Secretarial
Business,
Admin and
Law
Business
Admin & Law
by Gender
Level 2
72.7
17.8%
All VRQ
28.4
7.0%
Total
Level 1
59.6
7.0%
Level
3
15
3.6%
147.2
8.8%
2.7
6.3%
80.3
9.4%
39.1
9.4%
147.7
8.8%5
Total
147.8
8.8%
Full VRQ
Male
Female
13.6
11.4
5.5%
7.9%
All VRQ
Male
Female
53
94.8
6.1%
11.8%
Full VRQ
Level 2
21.3
9.3%
Full VRQ
2.3
15.2
5.4%
6.7%
Level
3
4.1
3.4%
28.
7.2
7.6
6.4%
25.
6.4
Total
25
6.4%
Table 45 shows the number of Business & Administration N/SVQs and VRQs
awarded in the nine English regions. More Business & Administration N/SVQs are
awarded in the North West than any other region. In total 81,040 Business &
Administration N/SVQs are awarded across England.
For Business & Administration VRQs, the South East region has the highest
number of awards followed closely by the North West. In total 142,520 Business
& Administration related VRQs are awarded across England.
Table 45: Awards of Administrative and Secretarial N/SVQs and VRQs by
Region 2007/2008193
North East
North West
Yorkshire and Humber
East Midlands
West Midlands
East of England
London
South East
South West
England
SVQ/NVQ
5,810
13,160
11,150
7,120
10,620
6,640
10,450
8,240
7,860
81,040
VRQ
8,290
21,820
14,390
16,560
13,900
13,260
15,010
22,160
17,150
142,520
Table 46 shows the number of Business, Administration and Law N/SVQs and
VRQs awarded in the nine English regions. More Business, Administration and Law
N/SVQs are awarded in the North West than any other region. In total 111,390
Business, Administration and Law N/SVQs are awarded across England.
For Business, Administration and Law VRQs, the West Midlands region has the
highest number of awards followed closely by the East Midlands, North West and
North East. In total 41,230 Business, Administration and Law related VRQs are
awarded across England.
192
193
©2009 CfA
http://www.thedataservice.org.uk
http://www.thedataservice.org.uk
Page 103
Tot
Table 46: Awards of Business, Administration, and Law N/SVQs and VRQs by
Region 2007/2008194
North East
North West
Yorkshire and Humber
East Midlands
West Midlands
East of England
London
South East
South West
England
SVQ/NVQ
11,530
19,080
12,910
11,530
15,060
10,270
10,740
11,200
9,080
111,390
VRQ
5,460
5,540
3,710
5,710
6,250
2,360
4,630
4,270
3,300
41,230
13.5% of employees in Administration and Secretarial related occupations hold a
Level 2 qualification. This is following closely by Level 3 with 10.9%. Only 4.2%
of the workforce holds a level 7-8 qualification. This may be because at this level
employees may choose to undertake management qualifications.
Table 47: Level of Highest Qualification Held by Economically Active Adults in
England (Quarter 4, 2008)
Admin &
Secretarial
Total
% Admin
&
Secretarial
of Total
194
©2009 CfA
Level
7-8
Level
4-6
Level
3
Level
2
No
qual’s
All
701.9
Below
Level
2
544.6
84.9
512.1
544.6
109.9
2,498
2027.9
4.2%
6256.9
8.2%
4995.7
10.9%
5193.5
13.5%
4377.4
12.4%
1879.6
5.8%
24,731
10.1%
http://www.thedataservice.org.uk
Page 104
8.2 Apprenticeship Statistics
8.2.1 England
The graphics below present the rise of Business & Administration Apprenticeships
between October 2007 and July 2008. Although both programmes show a strong
decrease in December 2007, the general trend for Level 2 Apprenticeship and the
Level 3 Advanced Apprenticeship show a steady rise.
2000
1800
1600
1400
1200
1000
800
600
400
200
0
Advanced
Apprenticeship
Jul-08
Jun-08
May-08
Apr-08
Mar-08
Feb-08
Jan-08
Dec-07
Nov-07
Apprenticeship
Oct-07
Starts
Figure 51: English Apprenticeship & Advanced Apprenticeships Starts by
Month195
Month
195
©2009 CfA
http://www.apprenticeships.org.uk
Page 105
Table 48: English Apprenticeship & Advanced Apprenticeships Starts by Month
and Gender196
Advanced Apprenticeship
Female
Male
16- 19+ Total 16- 19+ Total
18
18
Oct
07
Nov
07
Dec
07
Jan
08
Feb
08
Mar
08
Apr
08
May
08
Jun
08
Jul
08
Total
Apprenticeship
Female
Male
16- 19+ Total 16- 19+ Total
18
18
Total
Total
73
155
228
18
33
51
279
567
233
800
143
69
212
1012
1291
72
145
217
14
29
43
260
418
223
641
113
78
191
832
1092
42
80
122
10
17
27
149
192
111
303
48
23
71
374
523
82
178
260
11
30
41
301
388
228
616
107
49
156
772
1073
68
154
222
8
18
26
248
351
243
594
95
60
155
749
997
57
223
280
6
35
41
321
343
266
609
74
73
147
756
1077
82
337
419
19
56
75
494
317
389
706
85
80
165
871
1365
62
265
327
10
34
44
371
265
315
580
46
79
125
705
1076
58
302
360
13
44
57
417
326
339
665
105
78
183
848
1265
80
391
471
17
70
87
558
496
428
924
136
105
241
1165
1723
From a total of 8063 learners, 6047 enrolled on the Business & Administration
Apprenticeship and 2016 on the Advanced Apprenticeship. The majority of
learners were of White British background 1835 for the Advanced Apprenticeship
and 5324 for the Apprenticeship.
121 learners from the British Asian/Pakistani background accounted for the
highest uptake for the Advanced Apprenticeship whereas the highest uptake for
the Apprenticeship was from learners of British/Asian Indian background.
However, the second highest group of learners for both Apprenticeships were
learners from British/Asian Pakistani background, accounting for 144 learners.
196
©2009 CfA
http://www.apprenticeships.org.uk
Page 106
Table 49: Apprenticeship Starts by Ethnicity 08-2007 to 04-2008197
Ethnicity
Asian or Asian
British
Bangladeshi
Asian or Asian
British Indian
Asian or Asian
British Pakistani
Asian or Asian
British Any
Other
Black or Black
British African
Black or Black
British
Caribbean
Black or Black
British Any
Other
Chinese
Mixed White and
Asian
Mixed White and
Black African
Mixed White and
Black Caribbean
Mixed Any Other
White British
White Irish
White Any Other
Any Other
Not Known/Not
Provided
Total
197
©2009 CfA
Advanced
Apprenticeship
17
Apprenticeship
Total
97
114
29
81
110
23
121
144
8
32
40
8
25
33
21
85
106
6
14
20
1
5
6
12
7
17
1
18
19
8
78
86
8
1835
5
10
5
26
31
5324
7
53
16
47
39
7159
12
63
21
43
2016
6047
8063
http://www.apprenticeships.org.uk
Page 107
Figure 52 indicates that approximately 10% of learners accessing an Advanced
Apprenticeships have a learning disability.
Figure 52: Advanced Apprenticeship Starts by Disability 08-2007 to 04-2008198
3500
2999
3000
Starts
2500
2000
1500
1000
310
500
17
0
Learning Difficulty
No Info
No Learning Difficulty
Disability
8.2.2 Scotland
Between April and December 2008 a total of 690 apprentices started the Business
& Administration framework Level 3 across the whole of Scotland. Of those, 110
were male and 77% female starters.
At the same time, 621 learners achieved the framework of which 86 were male
and 353 were female. This is an overall achievement rate of 77%, 66% male and
79% female.
Table 50 and 51 below give a breakdown into age groups. In the 16-19 year
group 110 (65%) learners starting the framework were male learners and 575
(78%) were female learners. At the same time, a total of 440 learners achieved
the framework, of which 65% were male and 78% female. The overall
achievement rate for males aged 16-19 was 65% and for females 78%.
In the 20+ group, only 5 female learners started the Business & Administration
framework, but 181 successfully completed the framework at the same time. Of
those, 69% were male and 80% female.
Table 50: Number of Scottish Modern Apprenticeships Starts199
Male
Female
Total
16-19
110
575
685
20+
0
5
5
All Scotland
110
580
690
198
http://www.apprenticeships.org.uk
Skills Development Scotland, March 2009 http://www.scottish-enterprise.com/se/sds/sds-trainingproviders/sds-statistics.htm
199
©2009 CfA
Page 108
Table 51: Number of Scottish Modern Apprenticeships Leavers200
Achievements 000s
Achievements as % of
All Leavers
Male
Female
Total
Male
Female
Total
16-19
61
379
440
65%
78%
76%
20+
25
156
181
69%
80%
78%
All Scotland
86
535
621
66%
79%
77%
8.2.3 Wales
Data for the Welsh Apprenticeships was not available at the time of the
publication of this report. Up-to date statistics will be included in the final report
in August 2009.
8.2.4 Northern Ireland
Previously, Northern Ireland operated two different training programmes. The
basic Apprenticeship was previously covered by the Traineeship NVQ Level 2 and
the Modern Apprenticeship, NVQ Level 3. Both programmes were grouped under
Jobskills 99 which ended on 2 September 2007 and replaced by Training for
Success Apprenticeships Northern Ireland (TFS, APPNI).
As the Jobskills programme is in the last stages of being phased out the figures in
the tables below show unusually low figures for starts and achievements. Both
programmes were phased out on the 13 February 2009.
Table 52-55 are a collection of data for Traineeships and Modern Apprenticeships
in Northern Ireland. The statistics are supplied on a regular basis by the
Department for Education and Learning Northern Ireland by the Statistical Office.
Table 52: Traineeship (NVQ Level 2)201
Starts
Achievers
%
Occupancy
Max
Potential
2006/07
343
177
52%
0
52%
2007/08
82
37
45%
3
49%
2008/09
16
1
6%
13
88%
441
215
49%
16
52%
Cohort
Total
200
Skills Development Scotland, March 2009 http://www.scottish-enterprise.com/se/sds/sds-trainingproviders/sds-statistics.htm
201
Statistics provided by DELNI
©2009 CfA
Page 109
Table 53: Modern Apprenticeship (NVQ Level 3) 202
Cohort
Starts
Achievers
%
Occupancy
Max Potential
2006/07
176
79
45%
3
47%
2007/08
116
30
26%
24
47%
2008/09
10
0
0%
6
60%
302
109
36%
33
47%
Total
Training for Success (TFS) was introduced in Northern Ireland on 3 September
2007. TFS now covers Apprenticeship NVQ Level 2 and Apprenticeship NVQ Level
3.
Table 54: Apprenticeship NVQ Level 2/3203
Date
Starts
Male
Female
03-Sept 07 to 31-Aug-2008
01-Sept 08 to 15-Mar-2009
232
744
52
225
180
519
Total
976
277
699
Table 55: Apprenticeship NVQ Level 3204
Cohort*
Starts
Male
Female
03-Sept 07 to 31-Aug-2008
01-Sept 08 to 15-Mar-2009
43
5
13
0
30
5
Total
48
13
35
As both Apprenticeships are still in the beginning stages, the full numbers of
achievement are not fully available at this point in time. However, the statistical
office of DELNI can confirm that 71 participants who started the Apprenticeship
NVQ 2/3 programme between 3 September 2007 and 31 August 2008 have
successfully completed the programme.
202
Statistics provided by DELNI
Statistics provided by DELNI
204
Statistics provided by DELNI
203
©2009 CfA
Page 110
8.3 Higher Education and Foundation Degrees
Figure 53 shows that the number of degrees increased in every category from
last year. Not surprisingly, this means that the number of UK students studying in
business and administration increased. The figures are given in Table 26.
Figure 53: Number of HE Business & Administration qualifications
achieved, 2000/2001 to 2007/2008205
120000
100000
15095
15100
12995
13130
40130
41090
40835
38025
41550
42190
42445
43715
14060
Degrees
80000
13180
44370
60000
31855
40000
69320
71455
40310
20000
45400
0
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Year
First Degrees
Higher/Postgrad Degrees
All other undergrad quals
Table 56: Number of UK students studying
Business & Administration-related programmes in HE each year206
205
206
©2009 CfA
Subject Area
2003-04
2004-05
2005-06
2006-07
2007-08
All B&A Studies
292340
290460
294775
300445
310450
HESA (2008) HE Numbers in Learning 2007–2008
HESA (2008) HE Numbers in Learning 2007–2008
Page 111
There is also information on foundation degrees in England and Northern Ireland.
Below, the table shows the number of courses running and in development, by
region.
Table 57: Foundation Degree Courses in England and Northern Ireland207
Region
No. of Running
Foundation Degree
Courses 2007-2008
No. of Foundation
Degree Courses In
Devel. 2007-2008
Yorkshire and
Humberside
295
157
North West
516
71
East of England
231
66
South East
314
80
South West
291
106
London
324
80
East Midlands
207
69
North East
170
54
West Midlands
244
53
Northern Ireland
39
16
Below is the number of students who entered into business and administration
foundation degrees in 2005-2006.
Table 58: Entrant numbers for Business & Administration
Foundation Degrees, 2005–2006208
Full Time
Total
Number
%
Number
%
Number
%
Business
900
41
665
35
1,565
38
Management
835
38
1045
56
1,880
46
Finance and
Accounting
45
2
50
3
95
2
Tourism,
Transport and
Travel
415
19
95
5
510
12
Combined
Business/Admin
20
1
20
1
35
1
Business &
Administration
2,215
100
1,870
100
4,085
100
207
208
©2009 CfA
Part Time
Most up to date list from www.fdf.ac.uk
HEFCE (2007) Foundation Degrees: Key Statistics 2001–2002 to 2007–2008
Page 112
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