Understanding Local Employers to Address Local Skills Gaps

“Employers are far more likely to engage when they believe the organisation contacting them understands the commercial environment in which they operate.”

We cannot solve a local skills gap if we don’t know enough about the businesses creating it. Colleges can have thousands of employers within their catchment, yet detailed knowledge often remains concentrated, around the comparatively small number of businesses already engaging with them.

That then creates a problem. The employers missing from the conversation may be experiencing some of the most acute skills shortages of all.

The latest evidence shows the scale of the challenge. According to Skills England’s 2026 Annual Skills Report, employers report that more than a quarter of vacancies are difficult to fill because of skills shortages. Demand for occupations critical to priority sectors is also expected to increase significantly over the coming decade.

For FE providers, responding effectively depends on knowing considerably more than the headline numbers. They need a detailed picture of the employers operating within their own catchment including who they are, where they are growing, what they are recruiting for and where demand for particular skills is beginning to emerge.

National skills data can identify the scale of a problem, whereas local employer intelligence tells a college what to do about it…

National skills challenges require local intelligence

The economy surrounding a college in Manchester can look completely different from one in Cornwall, Essex or the East Midlands. Differences can be equally pronounced between neighbouring towns. This is reflected in the growing emphasis on locally informed skills provision.

In July, Skills England published 39 new Local Skills Improvement Plans (LSIPs) covering England for the next three years. The plans provide detailed analysis of priority sectors and jobs within individual areas and are intended to help employers, education providers and other local partners ensure training responds to the needs of their economies.

The principle therefore is straightforward. Local skills decisions need good local employer intelligence. The quality of the resulting provision, however, depends on the depth and accuracy of the intelligence feeding those decisions.

Understand the businesses behind the statistics

From our work with FE colleges and training providers across the country, I’ve seen how easily employer engagement can become primarily a communications exercise. Send an email, run an event, conduct a survey and maybe call the businesses. All of those have value, but there is a much bigger opportunity available to providers.

Before engaging an employer, we should already understand as much as reasonably possible about that organisation.

What does it do? How many people does it employ? Is it growing? Which sector does it operate in? What role/s is it recruiting for? What skills might those roles require? Has the business recently expanded? Is it part of a sector that is growing locally?

Providers also need that intelligence at scale rather than relying upon relationships with a relatively small group of employers that already engage with the college.

In 2024 the Employer Skills Survey  gathered information from more than 72,000 employer establishments across the UK on skills needs, use and development.

The scale is significant. Therefore, a credible picture of employer demand cannot be built solely from conversations with the organisations easiest to reach.

SMEs cannot be an afterthought

This becomes particularly important when we consider smaller businesses.

Large employers generally have HR teams, learning and development functions and established relationships with education providers. They are often better equipped to articulate workforce requirements and engage strategically with colleges.

The owner of a ten-person engineering company may have none of those things. It doesn’t mean the business has no skills requirements, as quite often, the opposite is true.

The latest LSIPs specifically place responsibility on Employer Representative Bodies to engage local SMEs in their development and delivery, helping to ensure their training needs are represented.

If our mechanisms for understanding local demand disproportionately capture the voices of larger and already-engaged employers, we risk building an incomplete picture of the local economy.

The businesses we aren’t hearing from may tell us just as much as those we are.

Data should make employer engagement more human

Better use of data can fundamentally improve the relationship between FE and employers. I’m not advocating replacing conversations with dashboards, because it’s  data that should make conversations better.

If a college understands the composition of its employer catchment, it can segment businesses intelligently, identify patterns, spot emerging demand and approach employers with something relevant.

Instead of a generic approach about apprenticeships, a college can contact a local engineering business knowing that similar employers in the area are experiencing demand for particular roles and skills. The conversation begins with an understanding of the employer’s world rather than requiring the employer to explain everything from scratch.

It moves employer engagement away from a sales approach and towards a genuinely useful business conversation. Employers are far more likely to engage when they believe the organisation contacting them understands the commercial environment in which they operate.

Turn employer intelligence into curriculum intelligence

The real value comes when this information travels beyond employer engagement teams. Local employer intelligence should inform curriculum planning.

Which sectors are expanding locally? Which occupations are becoming harder to recruit for? Where are new businesses emerging? Which skills repeatedly appear across different employers? Are there groups of SMEs experiencing similar problems that could be supported collectively?

This closely reflects the approach being taken nationally. Skills England’s Skills Needs Assessments are intended to provide a clearer understanding of current and future skills demand and supply, supporting engagement between employers, providers and policymakers.

FE institutions are in a particularly strong position to turn that national ambition into something tangible because they sit directly within the economies they serve.

From employer engagement to employer understanding

Success shouldn’t simply be measured by how many employers have been contacted or how many conversations have been generated. A more useful measure is how well a provider understands the employers in its catchment area. Not just the major employers, existing apprenticeship customers, or the businesses already attending college events because the wider employer population matters.

The government’s statutory guidance for Local Skills Improvement Plans reinforces the importance of employers, education providers and other partners working together to understand and respond to local skills requirements. FE now has an opportunity to take that principle further.

If training is going to respond faster to changing local economies, providers need better visibility of what is happening. Understand the employers – understand the demand. Then build the skills provision, around what the local economy needs.

By Adam Herbert, CEO and Co-Founder, Go Live Data